A turbulent week on Wall Street continued as U.S. stocks faced additional pressure from geopolitical tensions and surging oil prices. In late trading on Thursday, Dow futures indicated a slight recovery, climbing 103 points, or 0.2%. Meanwhile, futures linked to the S&P 500 and Nasdaq 100 both rose by 0.1%. This modest uptick comes after significant declines across major stock indices over the course of the week, primarily fueled by intensifying conflicts in Iran and rising oil costs.
On Thursday alone, the Dow Jones Industrial Average experienced a substantial drop, plummeting nearly 785 points, or 1.6%. This decline positioned the index for its second consecutive negative week and marked its worst performance since October of the previous year. The S&P 500 also fell about 0.6%, and the Nasdaq Composite recorded a decrease of nearly 0.3%. A major portion of the stock market’s struggle was evident as eight of the eleven sectors closed lower, particularly impacting industrials, materials, and consumer staples, each of which suffered losses exceeding 2%. Notably, Caterpillar’s stock tumbled over 3%, while United Airlines saw a significant 5% reduction in its share price.
Compounding market concerns, oil prices experienced a sharp increase as transit through the critical Strait of Hormuz stagnated, leading to further volatility in energy markets. West Texas Intermediate crude oil futures surged by 8.5%, closing at $81.01— marking the highest price level seen since 2024. Brent crude futures also climbed nearly 5%. Analysts projected that crude prices were poised for their largest weekly percentage increase since March 2022.
Angelo Kourkafas, a senior global investment strategist at Edward Jones, emphasized the prevailing “risk-off” sentiment among traders, attributing this fear to uncertainties about the Iran conflict’s endurance and potential effects on energy supply chains. Kourkafas noted that the spike in oil prices further exacerbates inflation concerns, which could adversely impact consumer spending. However, he also addressed the U.S. economy’s newfound resilience to oil shocks, asserting that significant drops in economic growth would necessitate sustained oil prices above $100 per barrel for an extended duration. Since 2019, the U.S. has operated as a net exporter of oil, and the economy is now less energy-intensive than in previous decades.
As traders look ahead to Friday, all eyes will be on the forthcoming report detailing February’s nonfarm payrolls, scheduled for release at 8:30 a.m. ET. Economists surveyed by Dow Jones anticipate an addition of 50,000 jobs, a decrease from January’s robust figure of 130,000. They also expect the unemployment rate to remain stable at 4.3%.
For the week, as the market braces for potential shifts, the S&P 500 is currently projected to close down by 0.7%, while the 30-stock Dow has seen a significant decline of 2.1%. In contrast, the tech-heavy Nasdaq appears to be outperforming, on course for a modest gain of about 0.4%.
