Wall Street stocks slipped on Thursday, extending a downcast week as markets assessed tensions in the Middle East and awaited key US jobs data.

Oil prices jumped after US President Joe Biden told reporters he was discussing possible Israeli retaliatory strikes on Iranian oil facilities. The move lifted petroleum-linked equities but pressured the broader market.

There's a "lot of concern" that the Iran-Israel conflict will escalate, said Briefing.com analyst Patrick O'Hare. "So you have a little bit of a hesitation factor, not a lot of conviction on the part of buyers."

The Dow Jones Industrial Average dropped 0.4 percent to 42,011.

The broad-based S&P 500 declined 0.2 percent to 4,699, while the tech-rich Nasdaq Composite Index slipped less than 0.1 percent at 17,918.

The Institute for Supply Management's services index jumped to 54.9 percent in September, above expectations and a boost to confidence in the US economy.

Markets are looking ahead to Friday's September jobs report, which will influence upcoming Federal Reserve decisions on whether to keep cutting interest rates.

Investors are also monitoring a major US ports strike, which entered its third day and has potential to reignite inflation.

Petroleum-linked shares advanced with oil prices. ConocoPhillips gained 1.8 percent and both Halliburton and Apache won about three percent.

But Constellation Brands dropped 4.7 percent as the company's wine and spirits division experienced a 12 percent drop in quarterly sales compared with the year-ago period. (AFP)