Published by Global Banking & Finance Review®
Posted on March 6, 2026
6 min readLast updated: April 1, 2026
Add as preferred source on GoogleGlobal markets endured a volatile week as Asia-Pacific stocks tumbled to multi‑year lows amid the U.S.–Israel war on Iran, while oil prices surged over 15%, propelled by supply concerns through the Strait of Hormuz and raised rate‑cut skepticism.
By Sinéad Carew and Harry Robertson
NEW YORK/LONDON, March 6 (Reuters) - U.S. and European equity indexes closed a tumultuous week with losses of more than 1% on Friday as the U.S.-Israeli war against Iran sent oil futures soaring to prices not seen since 2023 while unexpected U.S. job losses in February increased hopes for Federal Reserve rate cuts, but this did little to calm investor worries about economic weakness.
Trading was choppy in currencies and U.S. Treasuries as investors digested the U.S. government report showing that nonfarm payrolls fell by 92,000 jobs last month, versus economists' forecast for growth of 59,000 jobs.
February's loss contrasted with a downwardly revised increase of 126,000 in January. The unemployment rate rose to 4.4% from January's 4.3%.
While Israel launched fresh attacks on Iran and Lebanon and Iran sent missiles into Israel and Gulf states that host U.S. military bases, U.S. President Donald Trump demanded Iran's "unconditional surrender" in an escalation of rhetoric a week into the war he launched alongside Israel.
This was after Iran's president said unspecified countries began mediation efforts in one of the first signals of diplomatic efforts. Qatar's energy minister told the Financial Times in a story published on Friday that his country expects all Gulf energy producers to shut down exports within weeks, which would push oil prices up to $150 a barrel.
Oil prices rallied sharply, with U.S. crude oil futures settling up more than 12% and pulling them closer to the price of Brent - the international benchmark - as buyers sought available barrels, with Middle Eastern supply constrained by the effective closure of the Strait of Hormuz.
At settlement, U.S. crude was up 12.21%, or $9.89, at $90.90 per barrel, for its biggest one-day gain since 2020, during the COVID-19 pandemic. Its intraday peak of $92.61 was its highest price since September 2023. Brent settled at $92.69 per barrel, up 8.52%, or $7.28, on the day, after touching its highest price since September 2023.
'UNDER PRESSURE'
With oil prices fanning inflation worries and signs of a weakening U.S. labor market, investors sold off equities with only the defensive consumer staples sector and the energy index managing small percentage gains.
"Stocks have been under pressure all day on the heels of the Qatar comments and the weak February jobs report," said Sahak Manuelian, managing director for global equities trading at Wedbush Securities in Pasadena, California.
Dow Jones Industrial Average fell 453.19 points, or 0.95%, to 47,501.55 on Friday while the S&P 500 fell 90.69 points, or 1.33%, to 6,740.02 and the Nasdaq Composite fell 361.31 points, or 1.59%, to 22,387.68.
For the week, the S&P 500 fell 2.02% for its biggest weekly percentage loss since mid-October. The Nasdaq declined 1.24% for the week and the Dow's weekly loss of 3.01% was its biggest since early April.
MSCI's gauge of stocks across the globe fell 10.36 points, or 1.01%, to 1,017.77. Earlier, the pan-European STOXX 600 finished down 1.02% for the day. The index marked its biggest weekly loss in almost a year with a decline of 5.5%.
The CBOE volatility index, often called Wall Street's fear gauge, rose 5.74 points to close at 29.49 on Friday, for its highest close since April 22.
'NEGATIVE MOMENTUM'
"We've seen negative momentum in stocks in recent days on the geopolitical environment and concerns about a resurgence in inflation and rising oil prices," said Jim Baird, chief investment officer with Plante Moran Financial Advisors.
"Today you layer on the news of an unexpectedly soft labor market report for February. Investors are recalibrating their expectations, not only for stocks but what it will mean for the Fed," Baird said.
In currencies, the safe-haven Swiss franc rallied across the board on Friday, as escalation in the Middle East spurred a flight to safety, while the U.S. dollar gave up earlier gains.
Against the Swiss franc, the dollar weakened 0.56% to 0.776 while the euro slid about 0.5% to 0.9019 franc <EURCHF=>.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.16% to 98.89. The euro was up 0.06% at $1.1614. Against the Japanese yen, the dollar strengthened 0.18% to 157.86.
In cryptocurrencies, bitcoin fell 4.22% to $68,141.59. Ethereum declined 4.89% to $1,978.74.
In government bonds, trading was choppy as investors worried about how the Federal Reserve would navigate a combination of slowing jobs and elevated inflation.
The yield on benchmark U.S. 10-year notes fell 0.4 basis points to 4.142%, from 4.146% late on Thursday while the 30-year bond yield rose 1.2 basis points to 4.7646%.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 4.3 basis points to 3.556%.
'A TRICKY SPOT'
Traders are betting that the Fed's first rate cuts will be in July, but the probability they stay unchanged in June fell to 55.6% from Thursday's 66.7%, according to CBOE's FedWatch tool.
"The Fed finds themselves in a tricky spot. Inflation is still elevated, and now with oil prices surging it's going to create even more upward pressure there. At the same time you're seeing the economy lose some momentum. There's obviously pervasive uncertainty on a number of fronts both policy and geopolitically related," Baird said.
Gold rose on Friday after the softer U.S. payrolls data kept hopes for rate cuts alive, though after two daily losses earlier in the week it was showing its first weekly decline in five weeks.
Spot gold rose 1.81% to $5,168.59 an ounce. U.S. gold futures rose 1.43% to $5,137.50 an ounce. Spot silver rose 2.45% to $84.14 an ounce.
Stocks are falling due to prolonged Middle East conflict, renewed inflation concerns, and hawkish central bank expectations.
Oil prices are rising as conflict in the Middle East disrupts supply and raises concerns about potential damage to key Gulf infrastructure.
The U.S. dollar is set for its largest weekly gain in 16 months, driven by safe-haven demand and reduced U.S. rate-cut expectations.
Investors are flocking to cash and re-pricing assets amid uncertainty and fear of further escalation in the Middle East.
Global bond yields are rising as shifting rate expectations and inflation fears drive investors to adjust their portfolios.
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