US stocks finished the week lower as geopolitical tensions increased after US and Israeli strikes on Iran and the escalation of the conflict in the Middle East. Oil prices rose sharply, raising concerns about possible supply disruptions and higher inflation, which added pressure on markets. Among major indexes, the S&P MidCap 400 fell the most (-4.61%), followed by the Russell 2000, Dow Jones Industrial Average, and S&P 500. The Nasdaq Composite performed relatively better but still declined 1.24%.
Economic data sent mixed signals to investors and policymakers. ISM surveys showed that the US economy continues to grow, with the manufacturing PMI at 52.4 and the services PMI rising to 56.1, supported by strong business activity and new orders. However, labor market data were weaker. ADP reported that private employment increased by 63,000 jobs and layoffs declined, but official data showed that nonfarm payrolls fell by 92,000 in February while the unemployment rate increased to 4.4%. This combination of weaker employment and higher energy prices makes the Federal Reserve’s policy decisions more complicated.
European stock markets also declined sharply as investors reacted to rising geopolitical risks. The STOXX Europe 600 fell 5.55% during the week. Major indexes also dropped, including Germany’s DAX (-6.70%), France’s CAC 40 (-6.84%), Italy’s FTSE MIB (-6.48%), and the UK’s FTSE 100 (-5.74%). Rising energy prices and concerns about the wider economic impact of the Middle East conflict weighed on investor sentiment.
