The S&P 500 recorded its biggest weekly drop since last October, with volatility surging significantly, as escalating conflict in Iran drove oil prices higher and fueled inflation concerns, while an unexpected decline in U.S. employment deepened worries about economic growth.
This week, the S&P 500 fell 2%, declining 1.3% on Friday alone, marking its largest single-day drop in nearly a month.
The technology-heavy Nasdaq 100 Index dropped 1.5%, and the Dow Jones Industrial Average declined 1%.
After U.S. President Trump demanded that Iran must "surrender unconditionally," the VIX index, a measure of market volatility, rose to its highest level since the tariff turmoil of last April.
Qatar warned that Persian Gulf countries might halt energy exports, potentially pushing oil prices to $150 per barrel.
U.S. employers unexpectedly cut jobs in February, and the unemployment rate increased, highlighting continued fragility in the labor market.
Markets also remained wary of potential disruptions from artificial intelligence and underlying cracks in the private credit market.
"If someone was bearish, this morning's news flow almost perfectly aligned with their stance," said Adam Crisafulli, founder of Vital Knowledge.
The jobs data were "disappointing," according to Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, but he noted it might encourage the Federal Reserve to implement further interest rate cuts.
Traders have nearly ruled out the possibility of a rate cut at the Fed's March meeting, but bets on a cut in April gained momentum on Friday morning.
Chicago Fed President Austan Goolsbee still believes there is potential for rate cuts to resume before the end of the year.
San Francisco Fed President Mary Daly stated that the February jobs report weakened the perception that the labor market is stabilizing.
At the close, the S&P 500 was down 1.3% at 6,740.02 points.
The Dow Jones Industrial Average fell 1% to 47,501.55 points.
The Nasdaq Composite Index declined 1.6% to 22,387.68 points.
The Nasdaq 100 Index dropped 1.5% to 24,643.02 points.
The Russell 2000 Index decreased 2.3% to 2,525.301 points.