US stocks fall as oil jumps 12% and jobs data weakens
Synopsis
US stocks ended sharply lower as oil prices jumped more than 12% following a US-Israeli strike in Iran that disrupted shipping through the Strait of Hormuz. At the same time, signs of weakness in the US labor market, including a rise in unemployment to 4.4%, added to investor concerns about slowing growth. The combination of higher energy costs and economic uncertainty raised questions about whether the Federal Reserve will be able to cut interest rates in the near term.
US stocks closed lower on Friday as a sharp surge in oil prices and signs of weakness in the US labor market rattled investor sentiment. Oil prices jumped more than 12% amid escalating Middle East tensions, while the latest payrolls data pointed to a cooling job market. The combination raised concerns about inflation pressures and complicated expectations for potential Federal Reserve rate cuts.
Key highlights
- Dow Jones Industrial Average fell 0.95% to 47,501.55
- S&P 500 declined 1.33% to 6,740.00
- Nasdaq Composite slipped 1.59% to 22,387.68
- US crude oil futures jumped over 12% to above $90 per barrel
- Brent crude rose about 8.5% to $92 per barrel
- Cboe Volatility Index climbed to 29.49, highest since April 2022
- U. unemployment rate increased to 4.4%
Wall Street’s three major indices ended the session in the red as investors reacted to rising geopolitical tensions and disappointing economic data.
The Dow Jones Industrial Average fell 0.95% to 47,501.55, marking its steepest weekly percentage decline since early April 2025.
The S&P 500 dropped 1.33% to 6,740.00, recording its worst weekly performance since mid-October.
The Nasdaq Composite declined 1.59% to 22,387.68, while the Russell 2000 logged its sharpest weekly fall since early August.
Market volatility also increased significantly, with the Cboe Volatility Index (VIX) rising 5.74 points to 29.49, its highest closing level since April 2022.
Geopolitical tensions push oil prices higher.
Investor sentiment weakened after oil prices surged following a US-Israeli military strike in Iran that disrupted shipping through the Strait of Hormuz, a key route for global energy supplies.
Qatar warned crude prices could climb as high as $150 per barrel, raising concerns about a potential resurgence in global inflation.
Higher energy prices often increase costs for businesses and consumers, which can pressure economic growth.
Weak economic signals add to market pressure
At the same time, new economic data pointed to signs of weakness in the US labour market.
The unemployment rate rose to 4.4%, influenced in part by a strike among healthcare workers and disruptions caused by severe winter weather.
The combination of rising energy costs and slowing economic momentum could complicate the Federal Reserve’s ability to reduce interest rates in the near term.
Strategists warn oil surge could increase volatility
Kristina Hooper, chief market strategist at Man Group, said the escalation in geopolitical tensions is creating uncertainty around monetary policy.
“The conflict now looks likely to last far longer than many had hoped, and oil prices are escalating as a result,” Hooper said.
Michael Arone, chief investment strategist at State Street Investment Management, said rising crude prices are contributing to heightened market anxiety.
“We are marching closer each day to $100 a barrel of oil, and that has caused much greater volatility and anxiety,” Arone said.
Banking and airline stocks lead sector declines
Banking shares faced pressure as investors weighed the impact of rising costs and tighter credit conditions.
The S&P 500 Banks Index dropped 2.03%.
Several financial companies posted notable losses:
- BlackRock fell 7.1% after restricting withdrawals from a private credit fund.
- Western Alliance slid 8.4% after filing a lawsuit against Jefferies over loan payments tied to bankrupt auto parts supplier First Brands Group.
- Jefferies declined 13.5%.
Travel stocks also struggled as fuel costs increased. The S&P Passenger Airlines Sub-Index dropped 4.07%.
Energy companies were among the few gainers, with the S&P energy sector rising 0.13% as investors expected stronger revenues from higher oil prices.
Safe-haven assets gain as risk appetite weakens
Investors moved toward assets traditionally seen as safer during periods of uncertainty.
Gold rose 1.83%, reflecting demand for protective investments.
Bitcoin declined 4.30%, mirroring broader risk-off sentiment across financial markets.
Meanwhile, Marvell Technology surged 18.4% after forecasting fiscal 2028 revenue above market expectations.
Trading activity also picked up, with 19.95 billion shares changing hands on US exchanges, above the 17.82 billion average over the past 20 sessions.
Markets focus on oil prices and economic signals
Investors are expected to closely track developments in the Middle East conflict and movements in global oil prices.
Upcoming economic data, particularly labor market indicators, will also be watched for clues about the strength of the US economy and potential Federal Reserve interest-rate decisions.
FAQs
Q1. Why did Wall Street markets fall in the latest session?
US stocks declined as investors reacted to rising geopolitical tensions in the Middle East and weaker economic data.
Q2. How did the major US stock indices perform?
The Dow Jones fell 0.95%, the S&P 500 dropped 1.33%, and the Nasdaq Composite declined 1.59%.
Q3. Why are oil prices rising and affecting markets?
Oil prices surged after military strikes in Iran disrupted shipping through the Strait of Hormuz, a key global oil route.
Q4. How could rising oil prices impact the US economy?
Higher oil prices can increase inflation and make it harder for the Federal Reserve to cut interest rates.
Q5. Which sectors were most affected in the market decline?
Banking and airline stocks fell sharply, while energy companies saw modest gains due to higher oil prices.
Follow Inspirepreneur Magazine for the business news.
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
You Might Also Like
AI Agents Set to Revolutionise Workforces in 2025, Says OpenAI Chief
AI’s Memory Problem Draws Intel–SoftBank Alliance
