US Stock Market Today: S&P 500 Drops as Weak US Jobs Report and Oil Rally Raise Fed Concerns

US stocks fell sharply on Friday after a weak jobs report added to concerns about slower growth, while rising oil prices increased fears of fresh inflation pressure. The S&P 500 fell 1% by 10:43 a.m. New York time, the NASDAQ 100 lost 0.8%, and the Dow Jones Industrial Average dropped 1.2%. At the same time, West Texas Intermediate crude rose 9.9% to $89.01 a barrel, while Bitcoin and Ether also moved lower.

Weak Jobs Data and Oil Surge Weigh on US Stock Sentiment

The latest US labor market data added to investor caution. Nonfarm payrolls fell by 92,000 in the latest month after a stronger start to the year. The unemployment rate rose to 4.4%. The decline marked one of the biggest monthly payroll drops since the pandemic period. Healthcare employment also weakened, partly due to strike activity.

The labor data arrived as the Middle East conflict affects energy markets. Brent crude climbed above $90 a barrel, while traders monitored the growing risk of supply disruptions linked to the Strait of Hormuz. Concerns over energy exports from the Gulf pushed oil prices higher and added to inflation worries across global markets.

This combination of weaker job growth and higher oil prices revived stagflation concerns. Investors now face the risk of slower economic growth alongside firmer price pressures. This backdrop pushed equities toward their worst weekly performance since November and kept overall market volatility elevated.

Fed Faces a Harder Policy Path

The jobs report may shift more focus back to the labor market after inflation dominated much of the Federal Reserve discussion in recent months. Traders slightly increased expectations for rate cuts after the payroll figures. However, the oil price surge complicated that view because higher energy prices may delay progress on inflation.

This tension now sits at the center of the market outlook. Weaker employment usually strengthens the case for lower interest rates. However, oil near $90 a barrel and the risk of further supply disruption make that path less clear. Policymakers may stay cautious if rising fuel prices begin to push headline inflation higher in the months ahead.

Bond markets reflected that uncertainty. The 10-year Treasury yield stayed near 4.14%, while the 2-year yield edged lower and the 30-year yield moved slightly higher. Investors shifted between recession concerns and inflation risks as they weighed the payrolls report against the energy shock.

Big Tech Valuation Reset Adds Another Layer

Technology stocks also stayed under pressure as investors grew less convinced that heavy artificial intelligence spending still justifies rich valuations. The Magnificent Seven has also trailed the broader market in recent months, a sharp change from the strong gains the group delivered in 2023 and 2024.

Several major tech names now trade at much lower forward earnings multiples than their long-term averages. NVIDIA traded at nearly 21 times forward earnings, while Amazon traded at about 23 times. Investors have become more focused on capital spending, depreciation, and free cash flow as large technology companies continue to pour billions into AI infrastructure.

The change in sentiment reflects a broader market reassessment. Investors still expect stronger earnings growth from these firms than from the rest of the S&P 500. However, the market participants are questioning whether massive AI spending will translate into durable returns rather than weaker balance sheets and lower free cash flow.

Corporate Highlights

• Marvell Technology gave a strong sales outlook and said data center demand was rising faster than expected.

• Gap reported fourth-quarter sales and profit that came in slightly below expectations.

• Costco posted profit above estimates as steady demand supported results.

• BlackRock limited withdrawals from a major private-credit fund after redemption pressure increased.

• Blue Owl stayed in focus as concerns over private-credit exposure weighed on risk appetite.

• Oracle’s AI data center expansion stayed under scrutiny as investors watched cash flow pressure.

• NVIDIA stayed under pressure as the market reassessed AI spending and valuation levels.

• Anthropic said it would challenge the Pentagon’s move against the company.

• SoftBank sought a loan of as much as $40 billion to help finance its OpenAI investment.

• Rohm shares surged after the chipmaker disclosed an acquisition proposal from Denso.

Also Read: US Stock Market Today: Wall Street Edges Higher as Strong Services Data Eases Inflation Fears, Oil Slips

Markets will likely be volatile in the coming weeks as investors watch incoming economic data, oil price movements, and signals from the Federal Reserve for clues about the direction of growth and inflation.