U.S. stocks have fallen sharply due to oil above $90, bad data and Trump's ultimatum
Brent hasn't been worth that much for two years
Rising oil prices and weak labor market data accelerated the decline in US stocks / Photo: Unsplash/Enlightening Images
All three major U.S. stock indices fell by more than 1.3% after the opening of major trading in the United States. The Dow Jones was the strongest to decline. "Wall Street Fear Index" rose above 28 points. Investors are reacting to the oil rally (the cost of Brent exceeded $90 per barrel), weak macro data (the labor market was unpleasantly surprised) and to the weakening prospects for the imminent end of the war between the U.S. and Iran.
Details
- The main U.S. index, the S&P 500, collapsed 1.6 percent in the first minutes of trading.
- The blue-chip index Dow Jones Industrial Average was losing about 1.9%.
- The Nasdaq Composite index fell 1.7 percent.
- The VIX index, which reflects the degree of volatility, reached its highest level since November 2025: at the moment it exceeded 28 points. For comparison, 20 points is considered the psychological mark.
- Brent oil rose in price by more than 5%, and its price rose above $90 per barrel - for the first time in two years. US WTI oil was up 8.5% at once and reached $88.2 per barrel.
- Spot gold prices were up 0.5% to $5107 per troy ounce. Silver was growing in price by 0.8%.
What's driving the market
Stocks in the United States fell amid rising oil prices and traders' reaction to an unexpected drop in the number of jobs in the U.S., CNBC writes. In addition, before the market opened, US President Donald Trump demanded Iran's unconditional surrender.
"There will be no deal with Iran, except WITHOUT CAPITULATION! After that - and the selection of a GREAT and ACCEPTABLE leader (or leaders) - we, along with our wonderful and very brave allies and partners, will work tirelessly to bring Iran back from the brink of destruction, making it economically bigger, better and stronger than ever before. IRAN WILL HAVE A GREAT FUTURE. "LET'S MAKE IRAN GREAT (MIGA!)," Trump wrote on Truth Social media.
The U.S. Bureau of Labor Statistics reported that the economy lost 92,000 nonfarm jobs in February. Economists had expected, on average, on the contrary, an increase in employment by 55,000.
What the analysts are saying
"Markets remain in risk-aversion mode as concerns grow over the duration of the conflict and possible disruptions to energy supplies," CNBC quoted Angelo Kurcafas, senior global investment strategist at Edward Jones, as saying a jump in U.S. oil prices is adding to inflationary concerns that could put pressure on consumer spending.
At the same time, according to the strategist, "structural changes have reduced the vulnerability of the U.S. economy to oil shocks. The price of oil needs to hold above $100 for an extended period to significantly slow economic growth, Kurkafas noted. The U.S. is a net oil exporter as of 2019, and the economy has become significantly less energy-intensive than before, he added.
That said, the U.S. economy is in a very different situation today than it was in 2022, the last time energy prices spiked, analysts at Renaissance Macro warned, MarketWatch reports. "Back then, the labor market was strong and consumers had excess savings to spend. Today, the labor market is weak and the savings cushion has been depleted," RenMac said.
"Today's [labor market] data could put the Federal Reserve in an extremely difficult position," Barron's quoted Morgan Stanley Wealth Management chief economic strategist Ellen Zentner as saying. - A strong weakening labor market supports the case for lower rates. However, the risk that prolonged high oil prices will trigger a new surge in inflation may force the Fed to take a wait-and-see attitude."
"Contrary to what most believe, higher energy prices could actually be deflationary for the U.S. economy," Atakan Bakiskan, chief U.S. economist at Berenberg, said on CNBC. He added that higher energy prices would mechanically raise the overall consumer price index (CPI). "But if you think about it, it also reduces consumers' purchasing power and worsens consumer sentiment. To pay for more expensive gasoline, consumers have to cut spending on other goods," Bakiskan said. In his view, this may even reduce core inflation. "And the Federal Reserve's own macroeconomic model also points to this effect," he added.
This article was AI-translated and verified by a human editor
