Stocks slide as soaring oil prices and US job losses rattle markets
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
NEW YORK/LONDON, March 6 : Stocks sank on Friday as the U.S.-Israeli war against Iran drove oil prices sharply higher, while an unexpected loss of U.S. jobs in February increased hopes for Federal Reserve rate cuts but did little to cheer investors worried about economic weakness.
Trading was choppy in currencies and U.S. Treasuries as investors digested the Labor Department's Bureau of Labor Statistics report showing that nonfarm payrolls fell by 92,000 jobs last month, versus economists' forecasts for growth of 59,000.
February's losses contrasted with a 126,000 downwardly revised increase in January. The unemployment rate rose to 4.4 per cent, from January's 4.3 per cent.
"We've seen negative momentum in stocks in recent days on the geopolitical environment and concerns about a resurgence in inflation and rising oil prices," said Jim Baird, chief investment officer with Plante Moran Financial Advisors.
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
This service is not intended for persons residing in the E.U. By clicking subscribe, I agree to receive news updates and promotional material from Mediacorp and Mediacorp’s partners.
Loading
"Today you layer on the news of an unexpectedly soft labor market report for February. Investors are recalibrating their expectations, not only for stocks but what it will mean for the Fed."
On Wall Street at 10:51 a.m. (1551 GMT), the Dow Jones Industrial Average fell 623.30 points, or 1.30 per cent, to 47,331.44, the S&P 500 fell 88.56 points, or 1.30 per cent, to 6,742.15 and the Nasdaq Composite fell 264.65 points, or 1.17 per cent, to 22,482.20.
MSCI's gauge of stocks across the globe fell 11.01 points, or 1.07 per cent, to 1,017.12, while the pan-European STOXX 600 index was down 1.31 per cent.
Israel pounded the Lebanese capital Beirut on Friday after ordering an unprecedented evacuation of the entire southern suburbs of the city, in a major expansion of the Middle East war. U.S. President Donald Trump demanded Iran's "unconditional surrender", a dramatic escalation of his demands a week into the war he launched alongside Israel.
Qatar's energy minister told the Financial Times in an interview published on Friday that the country expects all Gulf energy producers to shut down exports within weeks, pushing oil prices up to $150 a barrel.
With that, crude oil rallied sharply and was set for its strongest weekly gain since the extreme volatility of the COVID-19 pandemic in spring 2020, as the war halted shipping and energy exports via the crucial Strait of Hormuz.
U.S. crude was up 9.86 per cent to $88.97 a barrel after hitting its highest levels since October 2023, while Brent rose to $91.14 per barrel, up 6.71 per cent, on the day after touching its highest price since April 2024.
In currencies, the dollar pared earlier gains against major currencies after the weak jobs report raised the possibility that the Fed could cut interest rates sooner than expected.
Traders are betting that the Fed's first rate cuts will be in July but the probability they stay unchanged in June fell to 47.2 per cent from 66.7 per cent on Thursday, according to CBOE's FedWatch tool.
"The Fed finds themselves in a tricky spot. Inflation is still elevated and now with oil prices surging, it's going to create even more upward pressure there. At the same time you're seeing the economy lose some momentum. There's obviously pervasive uncertainty on a number of fronts both policy and geopolitically related," said Baird.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.13 per cent to 99.18, with the euro down 0.3 per cent at $1.1572.
Against the Japanese yen, the dollar strengthened 0.01 per cent to 157.59.
In cryptocurrencies, bitcoin fell 3.80 per cent to $68,441.79. Ethereum declined 5.28 per cent to $1,970.66.
In government bonds, the yield on benchmark U.S. 10-year notes fell 0.8 basis points to 4.138 per cent, from 4.146 per cent late on Thursday while the 30-year bond yield rose 2.2 basis points to 4.7745 per cent.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 5.7 basis points to 3.542 per cent, from 3.599 per cent late on Thursday.
Gold edged up on Friday after softer U.S. payrolls data kept hopes for rate cuts alive, though a stronger dollar capped gains and left the precious metal on track for its first weekly decline in five weeks.
Spot gold rose 1.28 per cent to $5,141.60 an ounce. U.S. gold futures rose 0.75 per cent to $5,103.40 an ounce.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app