U.S. Stocks Slide 1.90% as Oil Prices Surge Over 20% Amid Geopolitical Tensions and Weak Labor Data

U.S. equity markets experienced a significant decline of approximately 1.90% last week, prompted by a disappointing labor market report that unsettled investor confidence. The February Non-Farm Payrolls (NFP) data revealed a loss of 92,000 jobs, starkly contrasting with expectations of a gain of 58,000. This unexpected downturn in employment growth led to declines of over 1% for both the Dow Jones Industrial Average and the Nasdaq on Friday. Concurrently, the VIX index surged by 24%, indicating heightened market volatility and increasing investor caution regarding the economic outlook.

Current Market Conditions

As of today, U.S. markets are continuing to trend lower, influenced by ongoing geopolitical tensions and soaring energy prices. The S&P 500 is down approximately 1.39%, trading at $6,642, while the Nasdaq has decreased by 1.57%, now at $24,282. This downturn occurs on the ninth day of the ongoing conflict, which has kept investors wary of the broader macroeconomic implications.

Energy markets are exerting additional pressure on equities. West Texas Intermediate (WTI) crude oil has surged more than 20% today, reaching around $119 per barrel, underscoring the scale of the supply shock. The rise in oil prices is adversely affecting global inflation and growth forecasts, compelling investors to recalibrate their expectations for a more challenging macro environment. Elevated energy prices are anticipated to impact economies for months, sustaining pressure on equity markets.

Private Credit Market Pressures

Emerging stress in the private credit market is also signaling bearish trends for U.S. equities. Private credit funds that have heavily invested in software companies are now confronting escalating risks as artificial intelligence disruptions affect certain sectors of the software industry. Additionally, rising oil prices are driving global borrowing costs higher. As loan valuations decline and liquidity concerns mount, investors are beginning to withdraw capital from private credit and reduce their exposure to riskier assets. This tightening of credit conditions could further hinder growth-oriented sectors and pose additional challenges for the broader U.S. equity markets.

Investors are now turning their attention to this week’s Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) inflation readings for directional insights, along with earnings reports from key firms such as Oracle, Adobe, and Hewlett Packard Enterprise.

Technical Analysis of SPX

From a technical perspective, the S&P 500 index (SPX) is currently trading above its 200-day Simple Moving Average (SMA), which is acting as immediate support at $6,606. The next level of support is at $6,508. Immediate resistance is identified at last week’s low of $6,710, followed by Friday’s high of $6,847.

Dollar Index Movements

In early trading hours, the Dollar Index (DXY) reached $99.75 before retreating to $99.38. This modest pullback occurred as WTI crude oil prices peaked at $112 before settling around $100, alleviating some pressure on the dollar.

As the conflict enters its tenth day, oil prices have surged nearly 50%, climbing from $64 to $100. Research from the Federal Reserve indicates that every $10 increase in oil prices can elevate inflation by approximately 20 basis points. With oil rising from $64 to $100, this could imply an increase of around 72 basis points in inflation, potentially pushing it close to 3%. Such developments could diminish the likelihood of rate cuts, which is generally favorable for the dollar. However, the dollar may face short-term pullbacks as major economies consider releasing strategic oil reserves to stabilize energy prices. Despite this, the dollar remains supported due to the significant scale of the oil rally, and as a net energy exporter, the U.S. typically benefits from higher energy prices during conflicts.

Technical Outlook for the Dollar

Technically, the dollar is trading above its 9, 21, 50, 100, and 200-day SMAs, indicating bullish momentum. However, it encounters strong resistance around $99.70, a level it failed to surpass on March 2 and again in early trading today. A breakthrough above $99.75 could pave the way toward the psychological level of $100. The dollar is currently respecting an ascending parallel channel, with the lower boundary connecting the lows of January 30, February 16, and February 27, while the upper boundary connects the highs of January 26, February 6, March 3, and March 6. The daily Relative Strength Index (RSI) is rising toward 66, supporting bullish momentum, while the Moving Average Convergence Divergence (MACD) has increased from 0.007 to 0.36, reinforcing the positive trend. On the downside, the next support level is potentially at $98.54, coinciding with the 100-day SMA.

Crude Oil Price Surge

Crude oil prices have surged by a remarkable 35% over the past trading week, driven by escalating tensions between the U.S., Israel, and Iran. On Friday alone, prices rose by more than 15% by the close. In early trading on Monday, WTI prices surpassed the $100 mark, briefly touching $119.5 before settling around $107, reflecting a 17% increase.

The primary catalyst for this rally has been Iran’s effective closure of the Strait of Hormuz, a critical passage for approximately 20% of the world’s daily oil shipments. As the conflict progresses into its second week, investors are anticipating a prolonged supply disruption in the Middle East. With oil shipment routes remaining obstructed, inventory levels are nearing capacity, compelling producers like Iraq, Kuwait, and the UAE to further curtail output. The only potential threat to prices may arise from the recently announced release of emergency oil reserves by G-7 countries aimed at countering soaring energy prices.

Crude oil prices are now approaching levels not seen since 2022, encountering resistance at the highs from March and June 2022, near the $119.55 mark. The 4-hour charts indicate that the 9-EMA is near the $95 level, which could serve as potential support. Daily charts show WTI prices trading significantly above all key moving averages, suggesting a bullish market structure.

Gold and Silver Market Movements

Gold prices have sharply declined today, trading 1.40% lower at $5,100, while silver has fallen by 1.36% to $83.31. The surge in WTI crude oil is fueling inflation fears in the U.S., bolstering the dollar and diminishing the likelihood of near-term Federal Reserve rate cuts, all of which are negative factors for non-yielding gold. Meanwhile, the ongoing Israel-Iran conflict is contributing to commodity volatility, with interruptions in Persian Gulf energy flows driving crude prices higher. This has prompted some investors to liquidate gold holdings for cash, despite heightened geopolitical uncertainty typically favoring safe-haven assets. Nevertheless, gold remains up 18% year-to-date, supported by central bank purchases.

The next major directional catalyst for gold will be the anticipated duration of the Israel-Iran conflict. Should the situation de-escalate quickly, a weaker dollar could support gold prices. Conversely, if the conflict persists, inflation fears are likely to remain elevated, further pressuring the asset.

Gold is currently finding support around $5,100 after a drop to the psychological level of $5,000. Momentum indicators have reset to neutral, but high volatility suggests that a significant directional move may be imminent. Holding above $5,100 maintains a near-term bullish bias, with resistance at $5,213. However, a drop below $5,000 could lead to a re-test of $4,900 near the 50-day SMA.

Silver is trading at $83.31, down 1.36% for the day, but remains confined within a consolidation range of $82-$85 between the 50 and 21-day EMAs. A sustained breakout above $85 is necessary to open the door for a re-test of $86-87, while a close below $81 could bring $78.60 into play.

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Published on 2026-03-09 14:58:00 • By Editorial Desk