The US-Israeli war against Iran has now entered its second week — with President Donald Trump demanding ‘unconditional surrender’ on Friday. There appears to be no clear or quick path to ending the conflict as Tehran continues to launch retaliatory strikes across the Middle East. Investors lost hundreds of billions of dollars on Friday as the US and European stock markets tumbled and oil prices hit their highest levels in recent years.
Uncertainty over the widening conflict combined with a weak jobs report on Friday — with traders worrying about stagflation risks. Renewed anxiety about Artificial Intelligence and the private-credit industry also curbed risk appetite. And a secondary report released on Friday showed that US retail revenue was lower than expected. The combination of a weak economy and high inflation is a worst-case scenario for investors because the Federal Reserve has no good tool to fix both problems at the same time.
The Dow Jones Industrial Average plunged as many as 945 points before finishing with a loss of 453, or 0.9%. The Nasdaq composite sank 1.6% and the S&P 500 slid 1.3% to its worst week since October. Brent crude leapt briefly above $94 to touch its highest level since September 2023 before settling at $92.69 on Friday. According to some estimates, more than $800 billion was erased in value across equities.
Job market data disappoints
The Bureau of Labor Statistics reported that nonfarm payrolls fell by 92,000 in February — a sharp contrast from the downwardly revised January gain of 126,000. It is also significantly below the growth of 50,000 that economists polled by Dow Jones expected for the month. The unemployment rate also rose to 4.4% from 4.3%.
Oil surges to its highest price since 2023
The price for a barrel of Brent crude (the international standard) settled at $92.69 on Friday. Oil prices have surged — with Brent up from near $70 late last week — as the war has expanded and included areas critical to the production and movement of oil and gas in the Middle East. A barrel of benchmark US crude breached the $90 level for the first time since 2023 and jumped 12.2% to $90.90.
Much will depend on what happens with the Strait of Hormuz off Iran’s coast, where roughly a fifth of the world’s oil typically sails. The US government gave details Friday about a plan President Donald Trump announced earlier to offer insurance to ships crossing the strait, but it had little effect on the market. If oil prices spike further, like to $100 per barrel, and stay there, some analysts and investors say it could be too much for the global economy to withstand.
Private-credit, AI stocks take a hit
BlackRock said on Friday that it has limited withdrawals from a flagship debt fund after a surge in redemption requests —amid mounting investor alarm around the $2 trillion private credit industry. Shares of the world’s largest asset manager fell were down 7.7% after the update.
Meanwhile chipmakers plunged as Oracle Corp. and OpenAI scrapped plans to expand an artificial-intelligence data centre in Texas. The plan waspart of the Stargate initiative — a project of up to $500 billion and 10 gigawatts that includes SoftBank Group , OpenAI and Oracle. It was announced by U.S. President Donald Trump in January 2025.
Tariff uncertainty under Trump adds to jitters
US Treasury Secretary Scott Bessent claimed earlier this week that the 15% global tariffs would kick in “this week”. No formal update or announcement has been made and people around the world remain in a state of suspense and confusion.
