US equities ended the week starkly in the red as the war in Iran and the ensuing surge in global oil prices have rankled the global economy.

No corner of the market has been left untouched, and most of the market’s 2026 gains have evaporated.

The S&P 500 closed out Friday in the red by 1.3%, bringing the index’s return to a loss of 1.5% for the year.

Read more: How oil price shocks ripple through your wallet, from gas to groceries

The Dow Jones Industrial Average (^DJI) shed about 1.0%, or roughly 450 points, on Friday to return a loss of 1.2% on the year. The tech-heavy Nasdaq Composite (^IXIC) fell 1.6% on Friday and has lost roughly 3.7% since Jan. 1.

In the week ahead, the question on investors’ minds is the same as last week, but just a little more frantic: How long is this going to go on?

As Goldman Sachs’ head of oil research Daan Struyven told Yahoo Finance, the effects of the war are nonlinear. For every day the energy shock continues, the worse its effects on the market will be.

At the same time, a series of redemption freezes by major private credit funds and a monthly jobs report steeply below expectations have turned sentiment toward the underlying health of the US economy even more bearish.

Roughly one-fifth of the world’s seaborne oil supply crosses through the Strait in normal times, and as that transit has come to a halt, the stoppage has left roughly 16 million barrels in limbo, according to data from Vortexa.

With nowhere to send their oil and storage at capacity, producers have begun to cut back. The result is a market staring down a deep lack of available oil supply. Countries such as China have begun to hoard supplies, analysts told Yahoo Finance. Traders have sent the price of oil contracts for near-term delivery soaring as a result.

Energy analysts say prices will only continue to climb if barrels don’t begin to flow.

“Without an agreement and a fast cessation of all kinetic activity, the crude market will begin to break in days, and not in weeks or months,” said Vikas Dwivedi, global energy strategist at Macquarie. “In our analysis, a few weeks of Hormuz closure will create a domino effect of events that could push crude to $150 or higher.”

Oil is a “primary input” into the economy — from plastics to petrochemicals, fertilizer to factories, oil flows though everything. When oil prices go up, so, too, do the prices on everything else.

“The oil price shock, depending on how long it lasts, is a real thing,” Mary Daly, president of the San Francisco Fed, told CNBC on Friday.

This dynamic is a nightmare for the Federal Reserve, which has seen its rate-cut progress halted after its campaign against post-COVID inflation. Ten-year Treasury yields (^TNX) have climbed back above 4.14%, and expectations for rate cuts have pared back this week as traders digested the risk that higher crude prices could slow progress toward the Fed’s 2% inflation goal.

For policymakers, the question is: How much inflationary pressure does a sustained rise in oil prices create — and for how long? Goldman Sachs has estimated that in scenarios where oil prices remain elevated for several months, year-over-year headline inflation could temporarily climb back toward 3%.

Historically, the Fed has tended to look past temporary supply shocks, particularly when they primarily affect headline inflation. Regional leaders such as Minneapolis Fed president Neel Kashkari and New York Fed president John Williams said in comments throughout the week that it’s too early to get a read on the long tail of oil’s climb.

But if energy-driven price pressures persist and begin feeding into core measures or inflation expectations, policymakers may find it harder to justify cutting rates in the near term.

If energy prices were complicating things at the Fed, a dour jobs report has only made its headache worse.

The US economy lost 92,000 jobs in February, sharply missing economists’ expectations of an additional 55,000 jobs added, stalling the hiring growth that started the year — and reigniting fears that AI might be showing up more fully in the workplace.

The unemployment rate ticked up from January’s 4.3% to 4.4%, defying economist expectations that the rate would remain unchanged.

Gina Bolvin, the president of Bolvin Wealth Management Group, sees the fingerprints of AI in the jobs data, noting “a bifurcated market — slower macro growth paired with accelerating technological transformation.”

So does Amova Asset Management Americas’ Peter Graf, who wrote that the report is “a bracing splash of cold water for investors who assumed that the US economy could emerge unscathed from both the AI productivity revolution and capricious government policy zigzags.”

To their point: In February, Jack Dorsey’s Block (XYZ) announced layoffs of around 4,000 people, or 40% of the company’s staff. On Wednesday night, Block CFO Amrita Ahuja told Yahoo Finance’s Brian Sozzi that the layoffs were due to artificial intelligence.

Some economists argue that the print isn’t as bad as it seems. In both January and February, they argue, outside factors — such as a major labor strike at Kaiser Permanente that knocked out 37,000 jobs in physicians’ offices, according to the Bureau of Labor Statistics — played a role in the unexpected results.

BNP Paribas economist Andrew Husby suggested in emailed commentary that the tough month should be read with January’s surge as two swings from “special factors.”

But that’s not dissuading the argument that the labor market may not be as strong as the White House, and some members of the Fed, may have hoped.

Economic data: New York Fed, 1-year inflation expectations, February (3.09% previously)

Earnings calendar: Hewlett Packard Enterprise Company (HPE), Casey’s General Stores (CASY), South Bow Corporation (SOBO), Vail Resorts (MTN), BETA Technologies (BETA)

Economic data: NFIB small business optimism, February (99.6 expected, 99.3 previously); ADP weekly employment change, week ended. Feb 21 (+12,750 previously); Existing home sales, month-on-month, February (-1.2% expected, -8.4% previously)

Earnings calendar: Oracle (ORCL), Franco-Nevada Corporation (FNV), Ferguson Enterprises (FERG), BioNTech (BNTX), NIO Inc. (NIO), New Gold Inc. (NGD), Uranium Energy Corp. (UEC), Firefly Aerospace (FLY)

Economic data: CPI, month-on-month, February (+0.2% expected, +0.2% previously); Core CPI, month-on-month, February (+0.3% expected, +0.3% previously); CPI, year-on-year, February (+2.5% expected, +2.4% previously); Core CPI, year-on-year, February (+2.4% expected, +2.5% previously); Real average hourly earnings, year-on-year, February (+1.2% previously); Real average weekly earnings, year-on-year, February (+1.9% previously); MBA mortgage applications, week ended Mar. 6 (+11% previously)

Earnings calendar: Harmony Gold Mining Company (HMY), The Campbell’s Company (CPB), The Descartes Systems Group (DSGX), Wealthfront Corporation (WLTH)

Economic data: Initial jobless claims, week ended Mar. 7 (213,000 previously); Continuing claims, week ended Feb. 28 (1.86 million previously); Housing starts, month-on-month, January (-4.6% expected, +6.2% previously); Imports, month-on-month, January (+3.6% previously); Exports, month-on-month, January (-1.7% previously)

Earnings calendar: Adobe (ADBE), Wheaton Precious Metals Corp. (WPM), Dollar General (DG), Ulta Beauty (ULTA), Lennar Corporation (LEN), Futu Holdings (FUTU), DICK’S Sporting Goods (DKS), Li Auto (LI), Rubrik (RBRK), Full Truck Alliance Co. (YMM), SentinelOne (S), National Beverage Corp. (FIZZ), Hub Group (HUBG), Maze Therapeutics (MAZE)

Friday

Economic data: PCE price index, month-on-month, January (+0.3% expected, +0.4% previously); PCE price index, year-on-year, January (+2.9% expected, +2.9% previously); Core PCE price index, month-on-month, January (+0.4% expected, +0.4% previously); Core PCE price index, year-on-year, January (+3.1% expected, +3% previously); Personal income, January (+0.5% expected, +0.3% previously); Personal spending, January (+0.3% expected, +0.4% previously); Durable goods orders, January preliminary reading (+0.4% expected, -1.4% previously); GDP annualized, quarter-on-quarter, Q4 (1.4% expected, 1.4% previously); JOLTS job openings rate, January (+3.9% previously); JOLTS quits rate, January (+2% previously); JOLTS layoffs rate, January (+1.1% previously); University of Michigan sentiment, March preliminary reading (56.3 expected, 56.6 previously); U. Mich. current conditions, March preliminary reading (56.6 previously); U. Mich. expectations, March preliminary reading (56.6 previously); U. Mich. 1-year inflation, March preliminary reading (+3.4% previously); U. Mich. 5-10 year inflation, March preliminary reading (+3.3% previously)

Earnings calendar: VEON Ltd. (VEON), RLX Technology Inc. (RLX)

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