Stocks Sink as Weak Jobs Data, War Fears Rattle Markets – US Market Wrap
A weak jobs report hit stocks as a widening war in the Middle East pushed oil prices higher and stirred inflation concerns. Renewed anxiety about the private-credit industry also dampened risk appetite, while Bitcoin tumbled.
Friday’s 1.3% drop in the S&P 500 left the benchmark on track for its worst week since October. Financial shares sank, with BlackRock down 7.7% after curbing withdrawals from a private-credit fund. Chipmakers also slid after Oracle and OpenAI scrapped plans to expand an AI data center in Texas.
US oil topped $90, marking its biggest weekly gain on record. Short-dated Treasuries outperformed as traders increased bets on Federal Reserve rate cuts. With no sign of easing hostilities in the Middle East, the conflict is disrupting energy markets and heightening concerns about renewed price pressures.
Even before the war, Fed officials had been increasingly focused on inflation. But the latest jobs data could shift that attention. Nonfarm payrolls fell by 92,000 last month, one of the largest declines since the pandemic.
While part of the drop was expected due to factors such as healthcare strikes and bad weather, job cuts were broad across industries. The unemployment rate rose to 4.4%, threatening the prevailing view among policymakers that a stabilizing labor market would allow them to hold rates steady while battling persistent inflation.
Fed Governor Waller said he doesn’t expect the war to have a sustained impact on inflation. Fed’s Daly said the weakness in the labor market warrants close monitoring.
