Wall Street bleeds as oil prices surge, jobs fall

MANHATTAN (CN) — Amid fallout from the Iran strikes, U.S. markets opened to carnage on Monday morning.

By closing bell on Friday, the bloodbath had worsened.

The Dow Jones Industrial Average, at one point down 1,200 points on Monday, managed to recoup some of those losses to end the day down about 500 points. But throughout the week, the combination of poor employment data, spiking oil prices and geopolitical uncertainty caused the index to shed 1,476 points.

The S&P 500 and Nasdaq had similar downward trajectories, erasing any gains so far for 2026 and losing 139 points and 151 points for the week, respectively.

Investors and analysts remain hopeful the plummet in stocks and the conflagration in the Middle East is temporary — but markets have already shed trillions of dollars in market cap this year.

“Elevated energy prices, increased uncertainty associated with the Iran war and the potential risks associated with worsening private credit-market conditions should keep stocks under modest pressure over the near term,” John Canavan at Oxford Economics wrote in an investor’s note. “We expect the S&P 500 index to return to our prior baseline once the war ends.”

Oil prices spiked this week, with barrels of Brent crude reaching nearly $94 as the conflict caused maritime traffic through the Strait of Hormuz to slow to a crawl.

Meanwhile, the latest employment numbers released on Friday showed the U.S. economy lost a whopping 92,000 jobs last month. The jobs report also noted an increase in unemployment from 4.3% to 4.4%. The revised December employment report showed the U.S. economy lost 17,000 jobs that month as well.

At least when it comes to poor jobs numbers, experts say the shrinking labor pool may push the Federal Reserve to cut interest rates more aggressively.

“After lackluster job gains in 2025, the labor market is coming to a standstill,” said Jeffrey Roach, chief economist at LPL Financial. “I don’t expect the Fed to act sooner than June, but if the labor market deteriorates faster than expected, officials could cut rates on April 29.”

The Fed meets next on March 17. Most economists have predicted the central bank will cut interest rates at least once and perhaps twice this year, despite calls from President Trump to slash rates more aggressively.

Myriad other economic data this week didn’t garner much optimism. The pair of surveys from the Institute of Supply Management came in roughly as expected, with manufacturing remaining at about 52% and services gaining somewhat to hit 56%.

Experts say the positive reading in both indices — and particularly manufacturing, which is in expansion territory for the second consecutive month after contracting for 10 months — is likely due to artificial intelligence, which helped industries avoid some of the pain from tariffs.

The soft retail sales report from the U.S. Census Bureau, which showed a 0.2% decline in sales for January, was slightly better than the 0.4% decline expected but still points to a growing overall weakness in consumer spending.

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