Stocks finished lower again today as the unrelenting surge in oil prices continued to weigh broadly on the market. The S&P 500 (-1.3%), Nasdaq Composite (-1.6%), and DJIA (-1.0%) finished near their session lows, with today's weakness resulting in losses across the board for the major averages. 

Headlines were once again dominated by the surge in oil prices, with crude oil futures settling today's session $9.89 higher (+12.2%) at $90.86 per barrel. Financial Times reported that Qatar's energy minister, Saad al-Kaabi, warned that all Gulf oil producers could be forced to halt production in the coming days as the conflict endangers operations.

Additionally, President Trump said via Truth Social that a deal to end the war in Iran cannot be achieved without an unconditional surrender, though he somewhat softened his tone in an interview with Axios by saying "unconditional surrender" could mean the complete destruction of the regime's military instead of a formal surrender. 

Altogether, oil climbed $23.80 per barrel, or 35.5%, this week, which has prompted inflation concerns that have further diminished the market's expectation for a rate cut. However, a disappointing employment situation report for February (-92,000; Briefing.com consensus 60,000) gave rate cut expectations a modest boost and further complicated the expected monetary policy path. 

As for today's action, breadth figures were once again dismal, with just two S&P 500 sectors charting a modest gain. 

The energy sector (+0.1%) eked out a gain amid the higher price of oil while the consumer staples sector (+0.3%) finished as the top performer. Costco (COST 998.10, +15.53, +1.58%) notched a nice gain following its earnings report, while Kroger (KR 74.16, +2.58, +3.61%) continued its own post-earnings run. 

Defensive sectors were relative outperformers today, as the utilities (-0.4%) and health care (-0.8%) sectors finished with the narrowest losses today. 

Meanwhile, the consumer discretionary sector (-2.0%) lagged today, with particular weakness across cruise lines such as Carnival (CCL 25.80, -1.36, -4.99%) and Norwegian Cruise Line (NCLH 20.06, -0.86, -4.13%).

Airlines and trucking names were also underperformers as oil prices climbed, with Old Dominion (ODFL 193.97, -16.71, -7.93%) being one of the worst-performing S&P 500 names today. However, the industrials sector (-1.3%) saw its losses somewhat softened by strength in aerospace and defense names as the iShares DJ Aerospace ETF finished 0.8% higher. 

The information technology sector (-1.8%) finished near its session lows as selling pressure ramped across semiconductor names this afternoon, sending the PHLX Semiconductor Index 3.9% lower. Software names once again displayed relative strength, although Oracle (ORCL 152.93, -1.86, -1.20%) sold off sharply late in the session after Bloomberg reported that the company is ending plans to expand a flagship data center in Texas with OpenAI. 

In other corporate news, Financial Times reported that BlackRock (BLK 955.45, -79.55, -7.69%) has limited withdrawals from its HPS Corporate Lending Fund, a headline that weighed on asset manager names in the financials sector (-1.4%). 

Outside of the S&P 500, the Russell 2000 (-2.3%) and S&P Mid Cap 400 (-2.4%) underperformed as the market displayed a clear risk-off disposition today. 

Ultimately, today's session marked a lower finish to a particularly tough week for stocks. Rising oil prices continue to weigh on the market with no clear end in sight for the conflict in Iran, prompting concerns about margins and inflationary pressures. Inflation readings will take center stage next week with a busy week of economic data, though it will not yet reflect this week's energy surge. The major averages will enter the consequential week firmly lower across the board for the year.

U.S. Treasuries followed four days of selling with a volatile Friday session that produced a modest bounce in shorter tenors, while the long bond underperformed after showing some relative strength earlier this week. The 2-year note yield settled down four basis points to 3.56% (+18 basis points this week), the 10-year note yield settled down one basis point to 4.13% (+13 basis points this week), and the 30-year note yield finished unchanged at 4.76% (+14 basis points this week). 

• S&P Mid Cap 400: +3.2% YTD
• Russell 2000: +1.8% YTD
• DJIA: -1.2% YTD
• S&P 500: -1.5% YTD
• Nasdaq Composite: -3.7% YTD

Reviewing today's data:

• February Nonfarm Payrolls -92K (Briefing.com consensus 60K); Prior was revised to 126K from 130K, February Nonfarm Private Payrolls -86K (Briefing.com consensus 78K); Prior was revised to 146K from 172K, February Unemployment Rate 4.4% (Briefing.com consensus 4.3%); Prior 4.3%, February Average Hourly Earnings 0.4% (Briefing.com consensus 0.3%); Prior 0.4%, February Average Workweek 34.3 (Briefing.com consensus 34.3); Prior 34.3
  • The key takeaway from the report, however, is that it muddles the economic view for the Fed, with its twin planks of negative job growth and higher wage inflation. Accordingly, look for the Fed to sit on its policy hands, unwilling to cut rates for now as it also contends with the spike in oil prices and the uncertainty of the Iran war.
• January Retail Sales -0.2% (Briefing.com consensus -0.1%); Prior 0.0%, January Retail Sales, ex-auto 0.0% (Briefing.com consensus 0.2%); Prior 0.0%
  • The key takeaway from the report is that sales activity was disrupted by the winter storms, so the result isn't as disappointing as it looks, which comes through in the fact that nonstore retailer sales were up a robust 1.9% month-over-month.
• January Business Inventories 0.1%; Prior 0.0%
• Consumer credit increased by $8.1 billion in January (Briefing.com consensus: $9.9 billion) following an upwardly revised $25.2 billion increase (from $24.0 billion) in December.
  
  • The key takeaway from the report is that the credit expansion was modest but fairly balanced in January, with revolving and nonrevolving credit both increasing for the month.