Trump rejects Iran deal while unexpected U.S. job losses deepen market anxiety
MARKET INSIDER – Wall Street is heading toward another volatile session as a spike in oil prices and a shock deterioration in U.S. labor data push investors into risk-off mode. Futures tied to the Dow Jones Industrial Average dropped more than 600 points early Friday, while the S&P 500 and Nasdaq 100 also declined, extending a week of losses driven by geopolitical tension and inflation fears.
The selloff accelerated after President Donald Trump said there would be no deal to end the conflict with Iran unless the country agreed to an “unconditional surrender.” The remarks intensified concerns that the war could drag on, threatening energy supply from the Persian Gulf and pushing global crude prices sharply higher.
Oil markets reacted immediately. U.S. West Texas Intermediate futures surged above $87 per barrel, while Brent crude climbed past $90. Energy markets were further rattled after Qatar’s energy minister warned that Gulf producers might soon declare force majeure—potentially halting production and sending oil prices toward $150 if the conflict persists.
Compounding the geopolitical shock was a surprise deterioration in the U.S. labor market. February nonfarm payrolls fell by 92,000, sharply missing expectations for modest growth and reversing January’s revised gain of 126,000 jobs. The unemployment rate ticked up to 4.4%, raising concerns that economic momentum may already be weakening as energy prices climb.
The combination of rising oil and slowing job growth is creating a difficult macro backdrop for investors. Higher fuel costs threaten consumer spending and corporate margins, while weaker employment data adds uncertainty to the economic outlook. Travel and industrial stocks were among the early casualties, with Royal Caribbean and Caterpillar falling in premarket trading as energy costs surge. Retail giants Walmart and Costco also edged lower on concerns that higher gasoline prices could squeeze consumers.
The latest declines follow a difficult week for U.S. equities. The Dow is on track for its worst weekly performance since October, while the S&P 500 is also heading toward a second straight week of losses. Technology stocks have been more resilient, leaving the Nasdaq slightly higher for the week even as broader market sentiment deteriorates.
Still, some strategists caution against overreacting to the oil spike. The U.S. economy is less vulnerable to energy shocks than in previous decades, partly because the country has been a net oil exporter since 2019 and because modern economic activity is less energy-intensive. According to analysts, crude prices would likely need to stay above $100 for an extended period before significantly slowing economic growth.
For now, however, markets are trading geopolitics more than fundamentals. As long as oil prices remain volatile and the Iran conflict shows no path toward resolution, global investors may continue to favor caution—leaving equities vulnerable to further swings driven by energy markets rather than earnings or economic data.
