U.S. Stocks experienced a broad sell-off Friday as escalating tensions in the Middle East and a weakening U.S. Labor market rattled investors. The S&P 500 closed down 1.3 percent, marking its worst weekly performance since October, while the Dow Jones Industrial Average fell by 1 percent and the Nasdaq Composite by 1.6 percent.
Driving the market downturn was a surge in oil prices, fueled by fears of supply disruptions stemming from the conflict in Iran. West Texas Intermediate (WTI) crude oil jumped 12.2 percent to settle at $90.90 a barrel, reaching its highest level since September 2023. Brent crude, the international benchmark, rose 8.5 percent to $92.69 a barrel. The weekly gains for both benchmarks were substantial, with WTI recording its largest increase since at least 1983 and Brent its largest since at least 1988.
The price increases followed reports of heightened disruption to oil shipping lanes and concerns over production capacity. According to a report from the Wall Street Journal, Kuwait had begun curtailing production at some oil fields due to storage limitations. The disruption at a major refinery in Saudi Arabia, previously reported, also contributed to supply concerns. President Donald Trump responded to the escalating situation via Truth Social, calling for “UNCONDITIONAL SURRENDER!” from Iran.
Adding to the negative sentiment, a newly released U.S. Labor market report revealed a decline of 92,000 jobs in February, with downward revisions to the previous two months’ employment figures. Elyse Ausenbaugh, head of investment strategy at J.P. Morgan, noted that the pace of job gains had slowed significantly compared to 2024 and much of 2025.
The energy sector saw significant gains amid the oil price surge, while airline stocks suffered losses. Several technology firms with strong balance sheets managed to rally, but the market was dominated by risk aversion. Gold prices eased slightly to $5,086.62 per ounce as the dollar strengthened, while Bitcoin fell 3.1 percent to $71,090.45.
Global markets mirrored the declines in the U.S. The iShares MSCI Emerging Markets ETF fell 2.6 percent, with South Korea’s iShares MSCI South Korea ETF experiencing a particularly sharp drop. European natural gas prices also soared following Qatar’s shutdown of the world’s largest LNG export plant, further exacerbating energy concerns. According to Principal Asset Management’s Seema Shah, a sustained rise in oil prices could place renewed pressure on consumers and potentially delay anticipated rate cuts.
Treasury yields also climbed, with the 10-year U.S. Treasury yield reaching 4.143 percent and the 30-year rising to 4.754 percent as markets repriced inflation risk. The dollar strengthened against major peers, with the euro slipping to 1.1579 and the British pound to 1.3320.
