US stocks close down as oil spikes 12%, job market weakens
The increase in oil prices has fuelled expectations of higher input costs and pressure on corporate profits
Published Sat, Mar 7, 2026 · 07:22 AM
[NEW YORK] Wall Street’s three main indexes closed down on Friday (Mar 6) amid a sudden setback in the US labour market and a 12 per cent spike in US oil prices due to the escalating conflict in the Middle East
A disappointing payrolls report intensified worries that the US economy could be cooling just as geopolitical tensions in the Middle East push energy costs sharply higher. That mix threatens to box in the Federal Reserve, complicating its path to rate cuts and reviving concerns about renewed inflation pressure.
“The conflict now looks likely to last far longer than many had hoped, and oil prices are escalating as a result,” said Kristina Hooper, chief market strategist at financial firm Man Group in New York. “It raises the question of whether the Fed will even be able to cut rates.”
The Dow Jones Industrial Average fell 0.95 per cent to 47,501.55 points, posting its steepest weekly percentage drop since early April 2025.
The S&P 500 lost 1.33 per cent to 6,740 points and had its worst week since mid-October. The Russell 2000 recorded its sharpest weekly fall since early August.
The Nasdaq Composite slipped 1.59 per cent to 22,387.68.
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Oil prices jumped, driven by the US-Israeli military attack in Iran, which halted shipping through the Strait of Hormuz, and by warnings from Qatar that crude could surge to US$150 a barrel.
US crude oil futures climbed more than 12 per cent on Friday, to more than US$90 per barrel, while international Brent rose about 8.5 per cent to US$92 per barrel.
“We are marching closer each day to US$100 a barrel of oil, and that has caused much greater volatility and anxiety,” said Michael Arone, chief investment strategist at State Street Investment Management.
The Cboe Volatility Index, Wall Street’s most-watched gauge of investor anxiety, jumped 5.74 points to 29.49, its highest close since April 2022.
The increase in oil prices fuelled expectations of higher input costs and pressure on corporate profits, adding to the likelihood of weaker credit conditions, which is typically negative for lenders.
The S&P 500 Banks Index, which tracks major US bank stocks within the S&P 500, fell 2.03 per cent.
BlackRock fell 7.1 per cent on a decision to limit withdrawals from a major private credit fund.
Lender Western Alliance fell 8.4 per cent after suing Jefferies for not making a payment for loans tied to bankrupt auto parts supplier First Brands Group. Jefferies dropped 13.5 per cent.
Signs of a weakening US jobs market came amid a strike by healthcare workers and harsh winter weather. The unemployment rate increased to 4.4 per cent.
Travel stocks lagged as fuel costs jumped, with the S&P Passenger Airlines Sub-Index, which follows passenger-carrier stocks, dropping 4.07 per cent.
S&P energy stocks rose 0.13 per cent due to the prospect that higher energy costs will bring stronger revenue.
Safe-haven asset gold gained 1.83 per cent, while bitcoin slid 4.30 per cent.
Among other stocks, chip company Marvell Technology closed 18.4 per cent higher after forecasting fiscal 2028 revenue above estimates.
Volume on US exchanges was 19.95 billion shares, compared with the 17.82 billion average for the full session over the last 20 trading days. REUTERS
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