Non-farm payrolls unexpectedly decline, coupled with Middle East conflict, causing US stocks and currencies to fall together. The commodities index hits a historic high, US crude oil surges 16%, and the "Fear Index" VIX soars.

U.S. non-farm employment unexpectedly declines, causing uncertainty in Federal Reserve policy prospects. Middle East conflicts drive oil prices to record weekly gains. The private credit industry faces liquidity shocks. Amid multiple pressures, U.S. stocks and the dollar decline simultaneously within the day, while commodities soar to historic highs.

On Friday, the S&P 500 fell 1.3%, down more than 2% for the week, marking the worst weekly performance since October last year. The Dow and small-cap stocks led the decline, dropping 3-4%.

( Weekly trend of major U.S. stock indices)

According to Wallstreetcn, U.S. non-farm payrolls in February decreased by 92,000, with employment revisions for the previous two months down by 69,000, the largest decline since the pandemic outbreak. The unemployment rate unexpectedly rose to 4.4%. The sharp drop in data should have fueled expectations of rate cuts, but amid soaring oil prices triggered by Middle East tensions, markets are gripped by fears of stagflation.

Brian Jacobsen of Annex Wealth Management said that negative employment data combined with rising oil prices will make traders worry about stagflation risks. Allen Zeng of Morgan Stanley Wealth Management stated:

Today’s data may put the Fed in a dilemma. The significant weakness in the labor market supports rate cuts, but the risk of renewed inflation from sustained high oil prices may force the Fed to hold steady.

Bloomberg strategist Kristine Aquino pointed out that due to Iran-related conflicts pushing oil prices higher, inflation concerns had already overshadowed expectations for further easing to support the economy. However, after Friday’s employment data, growth worries began to divert market attention from inflation.

Goldman Sachs traders noted that the S&P 500 has broken below the key medium-term CTA trend support at 6,762 points, which could trigger more algorithmic selling.

Goldman Sachs assessment indicates that in the coming week, regardless of market direction, CTA strategies tend to sell, with total sell-offs reaching up to $190 billion in a down scenario, including about $63.7 billion in U.S. stocks.

( S&P 500 breaks key support at 6762 points)

Financial stocks led the decline due to turmoil in the private credit market, with BlackRock plunging 7.7%. Wallstreetcn mentioned that Oracle and OpenAI canceled plans to expand AI data centers in Texas, causing chip manufacturers’ stocks to plummet.

( Oracle intraday down 1.11%)

Despite all seven tech giants falling on Friday, their overall performance this week outperformed the other 493 components of the S&P 500.

( Tech giants outperform the rest of the S&P 500 this week)

In sector performance this week, energy led gains, while materials lagged due to global recession fears and declining profit margins.

( Sector performance of the S&P 500 this week)

WTI crude oil prices continued to surge nearly 16% on Friday, repeatedly breaking through $90 and $91 intraday. The weekly increase totals 35%, the largest weekly gain in history.

( WTI hits record weekly increase)

Commodities rebounded across the board, with Bloomberg’s commodity spot index rising 3.7%, the biggest weekly jump since July 2022, surpassing 701.5756 points, setting a new record high.

NY natural gas futures rose over 5.6%, up more than 9% for the week. EU natural gas prices fared worse, surging over 100% at one point this week.

( EU natural gas prices doubled at one point this week)

Bloomberg strategist Tatiana Darie summarized major geopolitical events impacting oil prices since 1990, noting that as energy costs rise, the correlation between stocks and oil tends to shift from positive to negative. Currently, this correlation shift is just beginning, and the downward pressure of rising crude prices on risk assets remains in early stages.

After the weak non-farm data, the 10-year U.S. Treasury yield fell about 7 basis points from the daily high, while the 2-year yield once dropped 5 basis points.

( Performance of major U.S. Treasury yields this week)

The dollar index declined 0.34 intraday but still gained over 1% for the week, marking the best weekly performance since October 2024. Bitcoin fell 4%, Ethereum down 4.6%, breaking below $2000.

( Dollar index)

Safe-haven sentiment pushed spot gold up 1.8%, silver up 2.5%. Due to the dollar’s strength this week, gold fell 2%, ending four consecutive weeks of gains. Silver declined nearly 10% this week.

( Gold, silver, copper, platinum weekly performance)

On Friday, the S&P 500 dropped 1.3%, down more than 2% for the week, marking the worst weekly performance since October last year. BlackRock plunged 7.7%. Chip stocks tumbled after Oracle and OpenAI canceled Texas expansion plans; Nvidia fell nearly 3%.

Major U.S. stock indices:

• S&P 500 closed down 90.69 points, down 1.33%, at 6740.02, down 2.02% for the week.

• Dow Jones Industrial Average fell 453.19 points, down 0.95%, at 47,501.55, down 3.01% for the week.

• Nasdaq declined 361.307 points, down 1.59%, at 22,387.679, down 1.24% for the week. Nasdaq 100 fell 377.399 points, down 1.51%, at 24,643.015, down 1.27%.

• Russell 2000 dropped 2.33%, at 2,525.301, down 4.07% for the week.

• Volatility index VIX rose 24.25%, to 29.51, up 48.59% this week.

Sector ETFs:

• Semiconductor ETF down 3.74%, global airline ETF down 2.80%, regional bank, banking, and tech ETFs down up to 2.54%, energy ETF up 0.13%.

( Sector ETFs on March 6)

The Magnificent 7 tech giants:

• Down 1.74%.

• Nvidia down 2.98%, Amazon down 2.66%, Meta down 2.3%, Tesla down 2.17%, Apple down 1.09%, Google A down 0.80%, Microsoft down 0.42%.

Chip stocks:

• Philadelphia Semiconductor Index down 3.93%, at 7,514.736, down 7.21% this week.

• TSMC ADR down 4.23%, AMD down 3.51%.

Chinese ADRs:

• Nasdaq Golden Dragon China Index up 0.69%, at 6,961.05, down 4.35% weekly.

• Among popular Chinese stocks, GDS up 7.5% initially, JD.com up 6.1%, XPeng, Ctrip, NetEase, Kingsoft Cloud up to 5.9%, Xiaomi up 3%, Meituan and Tencent up over 2%, Alibaba up 0.4%.

Other stocks:

• Circle down 3.59%.

European markets declined over 5.5% this week, with auto parts, building materials, banks, and raw materials down over 8%. Germany’s stock market fell 6.7%, Italy’s banking sector down over 9.6%, Norway’s stock market rose over 0.6%.

Pan-European indices:

• STOXX Europe 600 down 1.02%, at 598.69, down 5.55% for the week.

• FTSE Europe 300 down 1.01%, at 2,387.38, down 5.61%.

Country indices:

• Germany DAX 30 down 0.94%, at 23,591.03, down 6.70% weekly.

• France CAC 40 down 0.65%, at 7,993.49, down 6.84%.

• UK FTSE 100 down 1.24%, at 10,284.75, down 5.74%.

( Major European indices on March 6)

Sectors and stocks:

• Eurozone blue chips: Infineon down 6.81%, Bayer, Deutsche Bank, ASM Holdings, Volkswagen down 3.67%-3.04%.

• All components of STOXX 600: Zealand Pharma down 36.38%, BE Semiconductor down 17.15%, Universal Music Group down 8.06%.

• Sector performance: Automobiles & Parts down 8.96%, Construction & Materials down 8.81%, Banks down 8.24%, Personal & Household Goods down 8.11%, Basic Resources down 8.08%.

2-year U.S. Treasury real yields fell 15 basis points on non-farm payroll day, while 10-year yields rose 20 basis points this week amid inflation concerns. 2-year German yields rose over 31 basis points, with Middle East tensions fueling inflation worries.

U.S. Treasuries:

• NY close: 10-year yield up 0.19 basis points, at 4.1383%.

• 2-year yield down 1.59 basis points, at 3.5605%, up 18.56 basis points weekly, trading in 3.3586%-3.6289% range.

( Performance of major U.S. Treasury yields this week)

Eurozone bonds:

• End of European trading: German 10-year yield up 8.6 basis points, at 4.627%, up 21.6 basis points weekly, trading between 2.644%-2.880%.

• UK 10-year yield up 8.6 basis points, at 4.627%, up 39.4 basis points weekly.

• France, Italy, Spain, Greece 10-year yields up an average of 5.2 basis points.

Dollar index down 0.34%, but weekly gain exceeds 1%, the best since October 2024. Bitcoin down 4%, Ethereum down 4.6%, breaking below $2000.

Dollar:

• NY close: ICE dollar index down 0.30%, at 99.019, up 1.44% weekly, trading between 97.768 and 99.683. Rose early in the week, steady near 99 since Tuesday European session.

• Bloomberg dollar index down 0.07%, at 1203.50, up 1.36% weekly, trading between 1188.70 and 1211.25.

( Bloomberg dollar index)

Non-dollar currencies:

• NY close: EUR/USD up 0.07%, GBP/USD up 0.35%, USD/CHF down 0.65%.

• Commodity currencies: AUD/USD up 0.27%, NZD/USD up 0.03%, USD/CAD down 0.80%.

Yen:

• NY close: USD/JPY up 0.18%, at 157.87 yen, up 1.17% weekly, trading between 155.85 and 158.09 yen.

• EUR/JPY up 0.15%, down 0.60% weekly; GBP/JPY up 0.40%, up 0.47% weekly.

Offshore RMB:

• NY close: USD/CNH at 6.9030, up 150 points from Thursday’s close, trading between 6.9198 and 6.8888.

• Weekly decline over 400 points, down 0.65%.

Cryptocurrencies:

• NY close: Bitcoin down 4%, Ethereum down 4.6%, breaking below $2000.

( Bitcoin price oscillates upward)

CFTC data (as of March 3 week): Speculators increased net long NYMEX WTI crude oil positions by 10,234 contracts to 108,421 contracts, the highest in about eight months.

Crude Oil:

• WTI April futures up $9.89, nearly 12.21%, at $90.90/barrel, highest settlement since October 2023, weekly increase 35.63%.

( WTI futures)

• Brent May futures at $92.69/barrel.

Natural Gas:

• NYMEX April natural gas at $3.1860/MMBtu.

Safe-haven sentiment pushed spot gold up 1.8%, silver up 2.5%. This week, due to the dollar’s strength, gold fell 2%, ending four weeks of gains. Silver declined nearly 10%.

Gold:

• NY close: spot gold up 1.75%, at $5,171.00/oz, down 2.06% weekly, steady since Tuesday European hours.

( Gold prices in the second half of the week)

• COMEX gold futures up 1.90%, at $5,175.00/oz, down 1.30% weekly.

Silver:

• NY close: spot silver up 2.55%, at $84.3451/oz, down 10.06% weekly.

• COMEX silver futures up 2.88%, at $84.545/oz, down 9.35% weekly.

Other metals:

• Copper futures up 0.59%, at $5.8385/lb, down 3.64% weekly.

• Spot platinum up 0.98%, down 9.51% weekly; spot palladium down 0.58%, down 8.97% weekly.

• LME copper down $40, at $12,862/ton; LME nickel up $251, at $17,469/ton; LME tin up $164, at $50,065/ton.

Risk warning and disclaimer

Market risks are present; invest cautiously. This article does not constitute personal investment advice and does not consider individual user’s specific investment goals, financial situation, or needs. Users should determine whether any opinions, views, or conclusions herein are suitable for their circumstances. Investment is at your own risk.