Oil surges to its highest price since 2023, and stocks drop after a weak update on the US job market
By STAN CHOE, AP Business Writer
NEW YORK (AP) — Oil shot to its highest price since 2023 after surging again Friday because of the Iran war, and a weak update on the U.S. job market knocked stocks lower to cap Wall Street’s worst week since October.
The S&P 500 dropped 1.3% after a report showed U.S. employers cut more jobs last month than they created and after oil prices spiked above $90 per barrel. The combination of a weak economy and high inflation is a worst-case scenario for investors because the Federal Reserve has no good tool to fix both problems at the same time.
The Dow Jones Industrial Average plunged as many as 945 points before finishing with a loss of 453, or 0.9%, and the Nasdaq composite sank 1.6%.
“You can’t sugarcoat this report,” according to Brian Jacobsen, chief economic strategist at Annex Wealth Management. “A negative payrolls number combined with a big jump in oil prices will have traders worrying about stagflation risks.”
Stagflation is what economists call the miserable mix of a stagnating economy with high inflation, and a separate report released Friday added to the sourness after showing that U.S. retailers made less money in January than economists expected. It raised the disconcerting possibility that spending by U.S. households, the main engine of the economy, may be stretched near its maximum.
