US equities fell sharply on Friday, extending weekly declines as investors reacted to weaker-than-expected labour market data and another surge in oil prices linked to the escalating conflict between the United States and Iran.
The Dow Jones Industrial Average dropped 903 points, or 1.9%.
The S&P 500 declined 1.6%, while the Nasdaq Composite also fell 1.8%, reflecting widespread selling across sectors.
The market downturn came as traders assessed the implications of slowing job growth alongside rising energy prices, a combination that raised concerns about economic stability and inflation.
Jobs data misses rxpectations
New labor market data showed a sharp contraction in employment growth during February.
Nonfarm payrolls fell by 92,000 during the month, a stark reversal from January’s downwardly revised gain of 126,000.
Economists surveyed by Dow Jones had expected payroll growth of about 50,000 for February.
The unemployment rate rose slightly to 4.4%, up from 4.3% in the prior month.
Despite the weak headline jobs figure, wage growth came in stronger than anticipated.
Average hourly earnings rose 0.4% for the month and increased 3.8% from a year earlier, both readings exceeding forecasts by 0.1 percentage point.
Several sectors contributed to the decline in employment.
Healthcare, typically a strong contributor to payroll growth, lost 28,000 jobs largely due to a strike at Kaiser Permanente that sidelined more than 30,000 workers in Hawaii and California during the Bureau of Labor Statistics survey period.
Although the strike has since been resolved, it affected the February employment count.
Information services also shed 11,000 jobs, continuing a broader trend linked to artificial intelligence-related restructuring.
Over the past year, the sector has lost an average of 5,000 jobs per month.
Manufacturing employment declined by 12,000 despite tariffs aimed at reshoring production, while transportation and warehousing employment fell by 11,000.
Federal government employment dropped by 10,000.
According to Bureau of Labor Statistics data, federal payrolls have declined by about 330,000 jobs, or roughly 11% of the workforce, since October 2024 amid efforts by President Donald Trump to reduce federal employment.
Social assistance was among the few sectors posting job gains, adding 9,000 positions.
Oil prices surge on war concerns
Energy markets added further pressure to equities as crude oil prices surged.
West Texas Intermediate futures climbed above $89 per barrel, while international benchmark Brent crude traded above $90 per barrel.
Prices accelerated after Trump wrote in a post on Truth Social that there would be no agreement to end the conflict without Iran’s “unconditional surrender.”
The rise in oil prices reflects mounting fears that the war could disrupt global energy supply.
In comments reported by the Financial Times, Qatar’s energy minister warned that Gulf energy producers may need to declare force majeure in the coming days, potentially shutting down production.
The minister said such disruptions could send oil prices as high as $150 per barrel and have far-reaching consequences for the global economy.
“If this war continues for a few weeks, GDP growth around the world will be impacted,” he said.
“Everybody’s energy price is going to go higher. There will be shortages of some products and there will be a chain reaction of factories that cannot supply.”
The combination of weak employment growth and surging oil prices has created a difficult environment for equity markets.
Investors are now weighing whether slowing job creation signals broader economic weakness or represents a temporary disruption caused by strikes and sector adjustments.
At the same time, rising energy costs tied to geopolitical tensions could push inflation higher and complicate the outlook for monetary policy.
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