U.S. stocks opened significantly lower on Friday, driven by investor concerns that the U.S.-Iran conflict could prolong, prompting a flight to cash. Oil prices surged, and former President Trump ruled out the possibility of an agreement with Iran, while February's non-farm payroll data unexpectedly declined.
The Dow Jones Industrial Average fell 320.19 points, or 0.67%, to 47,634.55. The Nasdaq Composite dropped 324.62 points, or 1.43%, to 22,424.36. The S&P 500 declined 61.68 points, or 0.90%, to 6,769.03. Amid soaring oil prices and traders reacting to the surprise drop in U.S. job growth, U.S. stocks continued their decline on Friday, extending weekly losses for major indices. Non-farm payrolls decreased by 92,000 in February, a sharp contrast to the downwardly revised increase of 126,000 in January and well below the Dow Jones survey economist forecast of a 50,000 gain. The unemployment rate also rose from 4.3% to 4.4%. West Texas Intermediate crude futures surpassed $87 per barrel. As investors assessed the impact of the U.S.-Iran conflict on global energy supplies, the international benchmark Brent crude traded above $90 per barrel. In a post on Truth Social on Friday, former U.S. President Donald Trump stated that no deal to end the U.S.-Iran war would be made unless the Middle Eastern nation agrees to an "unconditional surrender." His remarks further amplified the rise in oil prices. Qatar's Minister of Energy informed a prominent UK financial media outlet that energy producers in the Gulf region might declare force majeure in the coming days, potentially halting production. Such a move could push oil prices to $150 per barrel. He warned that the Middle East conflict could "drag down the world economy." He stated, "If this war lasts for weeks, global GDP growth will be affected. Energy prices will rise for everyone. Shortages of some products will occur, triggering a chain reaction where factories cannot supply goods." Due to rising fuel costs, Royal Caribbean Cruises saw its stock fall over 9% this week, declining again on Friday. Caterpillar, which also suffered losses this week, dropped more than 2%. Retailers Walmart and Costco experienced slight declines as markets worried that higher oil prices would impact consumers. Recent oil price increases also pressured the stock market during Thursday's trading session. The Dow fell nearly 785 points, or 1.6%, marking its second consecutive weekly decline and its worst week since last October. The S&P 500 dropped approximately 0.6%, while the Nasdaq Composite edged down nearly 0.3%. Angelo Kourkafas, Senior Global Investment Strategist at Edward Jones, commented, "The market remains in risk-off mode as concerns grow over the conflict's duration and potential disruptions to energy supplies." He noted that surging U.S. oil prices have heightened inflation worries, which could pressure consumer spending. However, Kourkafas added, "Structural shifts have reduced the U.S. vulnerability to oil shocks. In our view, oil prices would likely need to stay above $100 for an extended period to significantly slow economic growth. The U.S. has been a net exporter of petroleum since 2019, and its economy is far less energy-intensive than in the past." For the week, the S&P 500 is on track for a 0.7% decline, while the 30-stock Dow has fallen 2.1%. The tech-heavy Nasdaq has outperformed other indices and is poised for a gain of about 0.4%.
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