European Stocks Steady; Caution Ahead of US Payroll Reports

European stock markets remained mostly stable on Friday, concluding the week on a cautious note as investors awaited the release of the monthly US jobs report and monitored the ongoing situation in the Middle East.

As of 03:15 ET (07:15 GMT), Germany’s DAX index was flat, France’s CAC 40 saw a slight increase of 0.1%, and the UK’s FTSE 100 also rose by 0.1%.

### Middle East Conflict in Spotlight

European indices have faced difficulties in the early days of October amid rising tensions in the Middle East.

Concerns persist regarding potential retaliatory actions by Israel against Iran, especially following Tehran’s missile strike on Israel, which could include targeting Iranian oil facilities. However, sentiment has improved slightly after US President Joe Biden indicated that he does not foresee an “all-out war” in the region.

### US Payrolls in Focus

In economic news, French industrial production saw a 1.4% increase in August, rebounding from a previous decline of 0.5%. Additionally, several speeches from European Central Bank policymakers are scheduled for the day.

Nevertheless, the central focus will be on the official US jobs report, which is expected to influence market sentiment ahead of the next Federal Reserve policy-setting meeting. Analysts estimate that the US economy maintained a moderate pace of job growth in September, anticipating an increase of 147,000 in nonfarm payrolls and a steady unemployment rate of 4.2%.

Recent labor market data has generally exceeded expectations, which could alleviate some concerns regarding today’s payroll numbers. A positive report may reduce the likelihood of significant interest rate cuts by the Federal Reserve in its last two meetings of the year.

### Corporate Highlights

In the corporate sector, J D Wetherspoon saw its stock rise by 0.5% after the British pub chain announced a substantial 73% increase in annual pretax profits, marking the first time sales surpassed £2 billion.

### Crude Gains on Middle East Turmoil

Oil prices experienced a slight uptick on Friday, heading towards their largest weekly gain in over a year, fueled by the risks associated with the escalating conflict in the Middle East.

By 03:15 ET, Brent crude rose by 0.3% to $77.86 per barrel, while US crude futures increased by 0.4% to $73.99 per barrel. Brent futures are expected to gain around 8% for the week, marking the steepest rise since February 2023, while US crude futures’ projected 8% weekly increase would be the largest since March of the previous year.