The S&P 500 Index ($ SPX ) ( SPY ) closed down -1.33% on Friday, the Dow Jones Industrial Average ($ DOWI ) ( DIA ) closed down -0.95%, and the Nasdaq 100 Index ($ IUXX ) ( QQQ ) closed down -1.51%. March E-mini S&P futures (ESH26) fell -1.39%, and March E-mini Nasdaq futures (NQH26) fell -1.58%.
Stock indexes fell sharply on Friday, with the Dow Jones industrial average posting a 3.5-month low amid concerns that war in the Middle East will push up energy prices, fueling inflation. Qatar’s energy minister told the Financial Times on Friday that war in the Middle East could “harm the world economy” and predicted that all Gulf energy exporters would shut down production within weeks if the war dragged on, pushing crude prices to $150 a barrel.
Stock losses accelerated Friday on comments by President Trump, who said the United States does not want to talk to Iran about an end to the war, and that “there will be no deal with Iran without unconditional surrender,” fueling concerns that the United States could be belting out a long war.
Stocks also retreated on Friday after U.S. employers unexpectedly cut jobs last month and the unemployment rate rose, raising doubts about the health of the labor market.
February US non-farm payrolls unexpectedly fell to -92,000, weaker than expectations for a +55,000 increase and the biggest drop in four months. February’s unemployment rate unexpectedly rose +0.1 to 4.4%, showing a weaker labor market than expectations for no change at 4.3%.
US February average hourly earnings rose +0.4% m/m and +3.8% y/y, stronger than expectations of +0.3% m/m and +3.7% y/y.
U.S. January retail sales fell -0.2% m/m, a smaller decline than expectations of -0.3% m/m, John’s retail sales were flat, in line with expectations.
US consumer credit rose +$8.05 billion, weaker than expectations for $12.65 billion.
Fed Governor Christopher Waller said, “Thinking about monetary policy, the Iran war does not lead to persistent inflation. That’s one reason the Fed doesn’t look at energy prices but at core prices excluding energy, because the core is the best predictor of future inflation.”
Cleveland Fed President Beth Hammock said, “Under my base case, I think policy should be on hold for a while as we see evidence that inflation is coming down and the labor market is stabilizing further.”
Boston Fed President Susan Collins said, “My baseline paints an uncertain picture of inflation, with persistent risks. This, combined with recent evidence suggesting a relatively stable labor market, argues, in my view, for keeping policy rates at their current, loosely constrained levels for some time.”
WTI crude oil (CLJ26) rose more than +12% to a 2.5-year high on Friday, the highest this week, as fighting in the Middle East continued for a seventh day. Iran targeted a number of Gulf countries last night, while the US and Israel are carrying out airstrikes against Iran. Key energy facilities in the Middle East have been targeted by Iranian drones or shut down by filling storage tanks, as the closure of the Strait of Hormuz has blocked energy exports.
The Strait of Hormuz remains blocked due to the war against Iran, which blocks most energy transfers from the Persian Gulf. Iran’s Islamic Revolutionary Guard Corps has warned ships to avoid crossing, saying ships “may be at risk from missiles or drones.” The closure of the Strait of Hormuz, which handles a fifth of the world’s oil, has restricted exports and forced Gulf producers to store crude in regional storage tanks. Goldman Sachs estimates the real-time risk premium for crude oil at $18/bbl, assuming the impact of a six-week total shutdown on oil traffic in the Strait of Hormuz.
In addition, the downing of an intercepted Iranian drone on Tuesday caused a major fire in the UAE’s main oil trading hub, Fujairah, a major oil storage hub in the Middle East. Natural gas prices in Europe hit three-year highs on Tuesday after Qatar shut down the world’s largest natural gas exporter, the Ras Laffan plant, following an Iranian drone attack. Ross Laffan produces about 20% of the world’s liquefied natural gas. On Thursday, China told its biggest refiner to suspend diesel and gasoline exports due to the escalating conflict in the Persian Gulf, which will tighten global oil supplies and push oil prices higher.
With Q4 earnings season nearing its end, more than 95% of S&P 500 companies have reported earnings results. Earnings are a positive factor for stocks, with 74% of the 492 S&P 500 companies reporting to beat expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to increase to +8.4% in Q4, marking the tenth consecutive quarter of year-over-year gains. Excluding top seven megacap technology stocks, Q4 earnings are expected to increase +4.6%.
Markets are discounting a 5% chance of a -25 bp rate cut at the next policy meeting on March 17-18.
Foreign stock markets were mixed on Friday. The Euro Stoxx 50 fell to a 3-month low and closed at -1.09%. China Shanghai Composite closed up +0.38%. Japan’s Nikkei stock rose 225 +0.62%.
Interest rates
June 10-year T-notes (ZNM6) closed by +4 ticks on Friday. The 10-year T-note yield fell by -0.5 bp to 4.131%. June T-notes rose from a 3-week low on Friday, and the 10-year T-note yield fell from a 3-week high of 4.175%.
T-notes rebounded from early losses on Friday and rose after a weaker-than-expected U.S. February payrolls report bolstered the outlook for the Fed to cut interest rates. T-note prices also found support today on comments from Fed Governor Christopher Waller, who said the Iran war was unlikely to lead to sustained inflation. In addition, Friday’s stock decline boosted demand for safe haven T-notes.
Fears of rising inflation initially pushed T-note prices lower on Friday after WTI crude rose more than +12% to a 2.5-year high, boosting inflation expectations, as the 10-year benchmark rose to a 5-week high of 2.378%.
European government bond yields rose on Friday. The 10-year German bund yield hit a 1-month high of 2.880% and ended +1.9 bp at 2.860%. The 10-year UK gilt yield rose to a 4.75-month high of 4.718% and ended +8.6 bp at 4.627%.
Eurozone Q4 GDP slipped to +0.2% q/q and +1.2% y/y from the previously reported +0.3% q/q and +1.3% y/y.
Swaps discount a 3% chance of a -25 bp rate hike by the ECB at its next policy meeting on March 19.
US stock movers
The weakness in the Great Seven Technology stock was ominous for the entire market. Meta Platforms ( META ), Tesla ( TSLA ), Amazon.com ( AMZN ), and Nvidia ( NVDA ) closed more than -2%. Also, Apple ( AAPL ) closed more than -1%, Alphabet ( GOOGL ) closed -0.80%, and Microsoft ( MSFT ) closed -0.42%.
Chipmakers and AI infrastructure stocks retreated on Friday, weighing on the broader market. Lam Research ( LRCX ) closed more than -7%, and Micron Technologies ( MU ), KLA Corp ( KLAC ), and Applied Materials ( AMAT ) closed more than -6%. Also, ASML Holdings NV ( ASML ), Intel ( INTC ), ARM Holdings Plc ( ARM ), and Western Digital ( WDC ) closed more than -5%, and Microchip Technologies ( MCHP ), Analog Devices ( ADI ), and NXP Semiconductor NV ( NXPI ) closed more than -4%. In addition, Advanced Micro Devices ( AMD ), Seagate Technology Holdings Plc ( STX ), and Texas Instruments ( TXN ) closed more than -3%.
Airline stocks fell on Friday as crude oil prices surged more than +12% to a 2.5-year high, pushing up jet fuel prices and potentially cutting into airline profits. American Airlines Group ( AAL ) and Southwest Airlines ( LUV ) closed more than -5%, and Delta Air Lines ( DAL ), United Airlines Holdings ( UAL ), and Alaska Airlines Group ( ALK ) closed more than -3%.
Cryptocurrency-exposed stocks fell on Friday as Bitcoin (^BTCUSD) fell more than +4%. Riot Platforms (RIOT) and Galaxy Digital Holdings (GLXY) closed more than -9%, and MARA Holdings (MARA) closed more than -8%. Also, Coinbase Global (COIN) and Strategy (MSTR) closed more than -4%.
Homebuilders moved lower on Friday as the 10-year T-note yield hit a 3-week high, which will lift mortgage rates and weigh on housing demand. Lennar ( LEN ) closed more than -3%, and Toll Brothers ( TOL ), PulteGroup ( PHM ), DR Horton ( DHI ), and KB Home ( KBH ) closed more than -1%.
Defense stocks rose on Friday on speculation that the ongoing war with Iran may bolster the U.S. defense budget. AeroVironment (AVAV) closed more than +3%, and Lockheed Martin (LMT), RTX Crop (RTX), Northrop Grumman (NOC), and L3Harris Technologies (LHX) closed more than +2%. Also, Huntington Ingles Industries (HII) closed up more than +1%, and General Dynamics (GD) closed up +0.75%.
Gap ( GAP ) closed down more than -15% after reporting Q4 total comparable sales of +3.00%, weaker than consensus of +3.43%.
Nutex Health ( NUTX ) closed down more than -14% after reporting an unexpected drop in Q4 EPS of $1.18, below the $3.19 earnings consensus.
BlackRock ( BLK ) closed down more than -7% to lead asset managers after it halted exits from its $26 billion HPS corporate lending fund after increasing client demand for redemptions. Also, Ares Management ( ARES ) closed more than -6%, and KKR & Co ( KKR ) closed more than -4%.
Cooper Cos.
The Trading Desk ( TTD ) closed down more than -1% after Wedbush downgraded the stock to Underperform from Neutral with a $23 price target.
Marvell Technologies ( MRVL ) closed up more than +18% to be the leading gainer on the Nasdaq 100 after it said year-over-year earnings growth would accelerate every quarter through fiscal 2027.
Samsara ( IOT ) closed up more than +18% after reporting Q4 revenue of $444.3 million, stronger than the consensus of $422.3 million.
CF Industries Holdings ( CF ) closed up more than +4% to lead gainers in the S&P 500, and fertilizer stocks rose on concerns that war in Iran could disrupt supplies as the Gulf region is home to the world’s largest fertilizer factories and the Strait of Hormuz handles about a third of global trade.
Boeing ( BA ) closed up more than +4% for the leading gainer in the Dow Jones Industrial Average after China is in talks to acquire 500 of the Boeing 737 Max jets.
Costco Wholesale ( COST ) closed up more than +1% after reporting Q2 total company comparable sales, including gas and currency, rose 7.4%, stronger than expectations of 6.72%.
Earnings Reports (3/9/2026)
Casey General Stores Co (CASY), Hewlett Packard Enterprise Co (HPE), Vail Resorts Inc (MTN).
As of the date of publication, Amir Espland had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
