Dow and S&P 500 slide, focus on jobs report, wait for moves in Middle East

U.S. stocks fell on Thursday as cautious focus returned to the economy and the monthly jobs report. Meanwhile, concerns about the Middle East conflict were simmering in the background.

The S&P 500 (^GSPC) fell 0.2%, while the Dow Jones Industrial Average (^DJI) fell about 0.3%. The tech-heavy Nasdaq Composite (^IXIC) fell slightly. All three gauges closed slightly above the flat line on Wednesday.

Some calm has returned to the market, which was rocked by escalating tensions in the Middle East, which led to sharp increases in oil prices. Israel has yet to launch its promised retaliation for Tuesday's Iranian missile attack, as Western and regional leaders try to stabilize the situation.

Investors are now gearing up for Friday's highly anticipated September jobs report after a surprise rise in private payrolls was coupled with signs of easing in the labor market.

On Thursday, investors received further signs of a general slowdown in the labor market. Weekly jobless claims rose slightly compared to the previous week. Meanwhile, planned layoffs in the U.S. have fallen from a five-month high, according to a report from Challenger, Gray and Christmas. However, the company's vice president said the data shows the job market is at a “tipping point.”

New signs of deterioration in the labor market could prompt the Federal Reserve to follow up its 0.5% interest rate cut last month with another huge move, although policymakers had expected a 0.25% cut in November.

Read more: What the Fed's interest rate cut means for bank accounts, CDs, loans and credit cards

Meanwhile, the Israel-Iran crisis helped push oil prices higher for a third day, putting another potential drag on economic activity. Brent crude oil (BZ=F) and West Texas Intermediate (CL=F) futures both rose over 2% on Thursday.

On the corporate front, shares of Levi Strauss (LEVI) plunged over 10% premarket after the jeans giant issued disappointing sales guidance and said it was considering selling its Dockers brand. Tesla (TSLA) shares slipped further amid poor delivery numbers, as Reuters reported that the electric vehicle maker has halted online orders for its cheapest Model 3 in the United States.