Stocks Hit by Weak Jobs as Oil Tops $90 on Iran: Markets Wrap
(Bloomberg) — A weak jobs report hit stocks at a time when a widening war in the Middle East is lifting oil prices and fueling inflation jitters. Renewed anxiety about the private-credit industry also curbed risk appetite. Bonds wavered.
Equities headed toward their worst week since November, with the S&P 500 down 1% Friday. BlackRock Inc. curbed withdrawals from a giant private-credit fund. Oil topped $90. An earlier Treasury rally waned, with the market set for its biggest weekly rout since President Donald Trump announced sweeping tariffs nearly a year ago. That’s even as traders slightly boosted bets on Federal Reserve rate cuts. Bitcoin sank below $69,000.
Nonfarm payrolls slid 92,000 last month after a strong start to the year. The drop was one of the largest since the pandemic, partly reflecting a decrease in health-care employment due to strike activity. The unemployment rate rose to 4.4%.
The figures could refocus the Fed’s attention on the jobs market as it assesses how long to hold rates steady. Policymakers have been more attuned to inflation lately — even before the war on Iran sparked concerns about price pressures.
A negative payrolls number combined with a jump in oil prices will have traders worrying about stagflation risks, according to Brian Jacobsen at Annex Wealth Management.
“Today’s numbers may have put the Fed between a rock and a hard place,” said Ellen Zentner at Morgan Stanley Wealth Management. “Significant weakening in the labor market would support a rate cut, but given the risk that higher-for-longer oil prices could trigger another inflation surge, the Fed may feel compelled to remain on the sidelines.”
With no sign of a let-up in hostilities in the Middle East, the conflict is unleashing a wave of disruption across energy markets, with shipping through the Strait of Hormuz at a near-total halt. Trump demanded Iran surrender as the war on the Islamic Republic raged for a seventh day.
About 415 shares in the S&P 500 fell. The yield on 10-year Treasuries was little changed at 4.13%.
Fed Governor Christopher Waller said on Bloomberg TV he doesn’t expect the Iran war to have a sustained impact on inflation. Meantime, Fed Bank of San Francisco President Mary Daly told CNBC that a disappointing employment report undermines the notion that the labor market was stabilizing.
While the jobs report precedes the Iran conflict, the spike in oil prices raises the probability of stronger energy inflation, according to Andy Schneider at BNP Paribas.
“Modest increases in oil prices, even if sustained, have transitory effects on US headline inflation and minimal effects on US core inflation,” said Michael Gapen at Morgan Stanley. “The Fed can look through these increases, but with inflation above target as long as it has been, even modest oil price pressures could delay rate cuts.”
Absent second-round effects or rising inflation expectations, he says Fed hikes have a high bar. A substantial rise in oil prices could weaken activity, acting like an uncertainty shock and putting rate cuts in play, Gapen noted.
If the labor market keeps losing steam, it becomes a more delicate backdrop — especially with geopolitical uncertainty on the rise and energy prices capable of acting as an added tax at the gas pump, according to Bret Kenwell at eToro.
“This may not change the Fed’s decision this month, but a visibly weakening jobs market is the kind of trend that can pull the Fed in a more dovish direction as 2026 unfolds,” he said. “Regardless of interest rates, a deteriorating jobs market is not what investors want to see.”
Corporate Highlights:
Marvell Technology Inc. delivered a bullish sales outlook, saying that data center demand was growing even faster than anticipated. Gap Inc. reported sales and profit that came in slightly below expectations as two of its apparel chains underperformed. Costco Wholesale Corp.’s profit rose more than expected, showing the club chain is capitalizing on an extended period of sales growth. What Bloomberg strategists say…
“Inflation concerns stemming from higher oil prices — as a result of the Iran conflict — overwhelmed the prospect of further easing to support the economy. Following Friday’s data, growth worries are diluting some of that focus.” — Kristine Aquino, Managing Editor, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 1% as of 12 p.m. New York time The Nasdaq 100 fell 0.7% The Dow Jones Industrial Average fell 1.1% The Stoxx Europe 600 fell 1% The MSCI World Index fell 0.8% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.1606 The British pound rose 0.3% to $1.3397 The Japanese yen was little changed at 157.61 per dollar Cryptocurrencies
Bitcoin fell 3.8% to $68,445.2 Ether fell 5.2% to $1,971.59 Bonds
The yield on 10-year Treasuries was little changed at 4.13% Germany’s 10-year yield advanced two basis points to 2.86% Britain’s 10-year yield advanced eight basis points to 4.62% Commodities
West Texas Intermediate crude rose 11% to $90.10 a barrel Spot gold rose 1.1% to $5,138.45 an ounce ©2026 Bloomberg L.P.
