Markets
Stocks fell last week as investors assessed the implications of a fresh Middle East conflict while digesting mixed reports on the jobs market.
The Standard & Poor’s 500 Index fell 2.02 percent, while the Nasdaq Composite Index slid 1.24 percent. The Dow Jones Industrial Average declined 3.05 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 6.62 percent.¹²
Is the Middle East Conflict Spreading?
Stocks opened lower on the first trading day of the week as investors reacted to news of military action in the Middle East. However, the decline was short-lived as investors quickly “bought the dip.” All three major averages recovered—or nearly recovered—from their intraday lows by Monday’s close.³
Stocks opened lower again on Tuesday as markets weighed the possibility of a protracted conflict. However, afternoon comments from the White House—promising risk insurance and U.S. Navy escorts for oil tankers and other maritime trade vessels in the Persian Gulf—appeared to calm investor nerves, allowing stocks to partially recover before the close.⁴
Stocks opened higher on Wednesday, driven by a rebound in technology shares and stabilizing oil prices. News of stronger-than-expected private employer hiring from ADP also boosted sentiment. By the closing bell, the S&P 500 and the Nasdaq were in positive territory for the week.⁵
However, markets remained under pressure later in the week amid concerns of a widening conflict. Stocks opened lower on Friday after the latest jobs report from the Bureau of Labor Statistics showed the economy unexpectedly lost 92,000 jobs last month. Meanwhile, reports that some oil fields in the Middle East had begun cutting production due to dwindling storage capacity added another layer of complexity to the evolving situation.⁶⁷
A Historic Week for Oil Prices
U.S. crude oil prices rose 36 percent—the largest weekly gain since 1983. The conflict has brought tanker traffic in the Strait of Hormuz, a key shipping route for global energy supplies, to a near standstill.
Another concern is how insurance companies may adjust shipping rates in the coming weeks due to heightened geopolitical risks.
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