Oil prices surge and jobs shock extend selloff for a second day…Nasdaq slides 1.6% [New York Stock Market Briefing]

U.S. stocks in New York fell for a second straight day as global oil prices spiked on fears of supply disruptions.

On the 6th (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed down 453.19 points (0.95%) at 47,501.55. The Standard & Poor’s (S&P) 500 fell 90.69 points (1.33%) to 6,740.02, and the Nasdaq Composite slid 361.31 points (1.59%) to finish at 22,387.68.

First, inflation jitters intensified as global crude prices jumped on Middle East-related risks. On the New York Mercantile Exchange, West Texas Intermediate (WTI) for April delivery surged $9.89 (12.21%) from the previous session to $90.90 a barrel, the highest level since Sept. 28, 2023.

WTI has jumped $23.88 this week alone, bringing its weekly gain to 35.63%—the largest on record since tracking began in 1983. Iran, at war with the United States, has fueled the spike in oil prices. It launched missiles and drones in simultaneous attacks on oil facilities in neighboring countries and also blockaded the Strait of Hormuz, tightening crude supply.

The logic is that if surging oil prices drive up inflation and worsen the economy, public sentiment toward the Donald Trump administration—which started the war—will deteriorate, making it harder for Trump to continue the Iran war.

With export routes blocked and oil facilities hit, Middle Eastern oil producers have also begun cutting output. Kuwait started output cuts at some fields due to storage capacity being full, and Iraq also cut crude output by 1.5 million barrels a day.

Concerns about stagflation are also resurfacing as U.S. employment indicators deteriorate. The U.S. Department of Labor said February nonfarm employment fell by 92,000. The figure sharply diverged from the market forecast of a 59,000 increase—by more than 150,000—underscoring a clear weakening trend in hiring. December employment was also revised to a decline of 17,000 from a prior drop of 65,000, and the January figure was adjusted to an increase of 126,000, down 4,000.

Tim Holland, chief investment officer (CIO) at Orion, said, “This jobs report is very disappointing,” adding, “With energy prices showing strength recently, there’s a possibility that talk of 1970s-style stagflation could emerge on Wall Street.”

U.S. January retail sales also fell 0.2% month on month, reaffirming the slowdown in consumption.

The impact of surging oil prices and weakening employment was broad-based across sectors. Industrials, financials, consumer discretionary, materials, communication services, technology, and real estate each fell more than 1%, while the Philadelphia Semiconductor Index plunged 3.93%. The decline reflected concerns that disruptions to crude supply chains could also hamper chip production.

Nvidia and TSMC fell around 4%, and ASML, Micron Technology, Applied Materials, Intel, and KLA posted losses of around 6%.

Oh Se-sung, Hankyung.com reporter sesung@hankyung.com