This week saw oil futures achieve historic gains amidst conflict with Iran, while equities plummeted during a widespread sell-off across global markets.
US shares concluded lower on Friday as surging oil costs, coupled with employment figures that fell short of predictions, exacerbated prevailing market anxieties. The Dow dropped by 453 points, or 0.95%, recovering some ground after an opening dip nearing 950 points. The S&P 500 saw a 1.33% decline, and the tech-heavy Nasdaq fell by 1.59%.
The Dow closed the week down 3%, marking its worst weekly performance since April. The S&P 500 lost 2% over the week, its poorest showing since October. European and Asian stocks experienced even heavier losses; the European Stoxx 600 index shed 5.55% for the week, and Japan’s Nikkei 225 retreated by 5.5%.
Oil prices continued their ascent, reaching heights not seen since September 2023. US oil jumped 12.2% to reach $90.90 a barrel, representing the largest single-day increase since May 2020. Brent crude, the international benchmark, rose by 8.5% to $92.69 per barrel.
US and Brent crude prices climbed by approximately 36% and 27% this week, respectively, as the confrontation with Iran effectively choked off oil flow through the Strait of Hormuz and caused disruptions for regional producers. The 36% weekly surge in US oil is the largest since WTI futures, the American benchmark, commenced trading in 1983.
“Investors have moved from complacency to the edge of panic. And we’re looking at a panic moment,” commented Bob McNally, President of Rapidan Energy Group, during a phone interview with CNN on Friday.
President Donald Trump stated in a social media post on Friday that “There will be no deal with Iran,” unless it involves unconditional surrender.
“The equity market is becoming increasingly susceptible to shocks in the Middle East, reducing the path of least resistance,” stated Craig Johnson, Chief Market Technician at Piper Sandler, in a note.
US oil rose by 14% on Friday, briefly exceeding $92 a barrel, but pared some gains in the afternoon after the US International Finance Corporation announced a recommitment of up to $20 billion for marine losses stemming from the Middle East conflict.
Wall Street’s fear gauge, the VIX, surged by 24%, hitting its highest level since April when markets were grappling with tariff-related uncertainty.
Iranian Kurdish Peshmerga from the Kurdistan Democratic Party of Iran (KDPI) inspect damage at the KDPI Azadi camp following an Iranian cross-border strike in Koyeh (Qoysinjaq), located in the eastern Erbil area of the autonomous Kurdistan Region of northern Iraq, on March 3, 2026. The United States and Israel struck Iran on February 28, resulting in the death of Iran’s Supreme Leader, prompting the Islamic Republic to retaliate with barrages of missiles targeting Persian Gulf nations and Israel. The Kurdistan region hosts US-led coalition troops, and its capital, Erbil, is home to a major US consulate complex. (Photo: Safin HAMID / AFP via Getty Images)
Trump declared no deal with Iran until “unconditional surrender”
Qatar’s Energy Minister, Saad al-Kaabi, informed the Financial Times that he anticipates all Gulf energy exporters might be forced to halt production, driving oil prices upward. Such an increase in oil and energy costs could fuel inflation, unsettling nerves on Wall Street.
Concerns over energy inflation were compounded by nervousness over Friday morning’s weaker-than-anticipated employment report. The US economy shed 92,000 jobs in February, and the unemployment rate climbed to 4.4%, according to the latest data from the Bureau of Labor Statistics.
“This is a tricky figure for the markets, given the weakness on one side and rising oil prices on the other,” noted Jeff Palma, Head of Multi-Asset and Macro Research at Cohen & Steers.
“The combination of trade uncertainty and a lack of population growth suggests an economy that is weakening, concurrent with a sharp rise in energy prices,” David Russell, Global Head of Market Strategy at TradeStation, communicated via email.
Bonds experienced volatility on Friday following the soft jobs report. The yield on the 10-year Treasury bond rose sharply this week as investors sold debt and priced in the potential inflationary impact of soaring energy costs. The 10-year yield traded at 4.14% on Friday, up from 3.96% on Monday, marking the largest weekly increase since April.
“Add to the confounding labor market story the surge in oil prices amid Middle East conflicts and renewed tariff uncertainty—and you get a complex, stagflationary mix of risks against the backdrop of the Fed,” stated Elise Ownenbo, Head of Investment Strategy at JP Morgan Wealth Management, writing in a note.
The US Dollar Index trended lower following the less robust employment figures, pausing its recent upward trajectory. The index finished the week up 1.3%, its best week since August, as investors sought the dollar as a safe haven. Inflation fears, which could cause the Federal Reserve to delay interest rate cuts, also bolstered the dollar’s gains.
“Today’s (jobs) numbers may have put the Fed between a rock and a hard place,” Ellen Zentner, Chief Economist at Morgan Stanley Wealth Management, stated in a note.
“Significant labor market slack would support rate cuts, but given the risk that longer-term oil prices could spark renewed inflation, the Fed might feel compelled to stand aside,” Zentner observed.
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