The S&P 500 index began March with a 2% weekly drop, weighed down by turmoil in the Middle East and an unexpected decline in February payrolls. The market benchmark is now down 1.5% for the year.
U.S. stocks were in the red for much of the week as investors digested the start of the US-Israel war with Iran. The war, now in its second week, has led to a wider conflict in the Middle East. Crude prices jumped above $90 a barrel as the Strait of Hormuz, the world’s most important chokepoint for crude flows, remains effectively shut.
Friday, the losses in U.S. stocks deepened as data showed employment unexpectedly declined in February and the jobless rate ticked higher. Nonfarm payrolls fell by 92,000 last month, representing the biggest drop since October and a significant miss versus the consensus estimate for a 55,000 increase. The unemployment rate rose to 4.4%.
The weekly drop was broad, affecting every sector except energy. The materials sector had the largest percentage loss, sliding 7.2%, followed by a 4.9% decline in consumer staples, a 4.6% drop in health care, and a 4.1% slip in industrials. Real estate, utilities, and communication services shed more than 2% each, while financials, consumer discretionary, and technology also edged lower.
Energy, the lone sector in positive territory for the week, rose 1% amid surging crude prices.
This week, earnings reports are expected from companies including Oracle (ORCL), Campbell’s (CPB), and Adobe (ADBE). Economic data will include the February consumer price index, the first revision to Q4 gross domestic product, and a delayed report on the January personal consumption expenditures price index.
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Episode 286 – Upstream: The Quest to Solve Problems Before They Happen by Dan Heath