After Worst Week in Months, Oil's Influence is Key

0:05Welcome to the Schwab Market Update Podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Keith Lansford, and here is Schwab's early look at the markets for Monday, March 9th. Investors returned from the weekend after a dismal jobs report and a war-fueled oil spike put stocks under pressure Friday, wrapping up the worst week on Wall Street in months. U.S. crude oil hit two-year highs above$90 per barrel heading into the weekend. I suspect stocks will find stability once it looks like oil prices have hit a near-term peak, likely corresponding with signs of Iran de-escalation, said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research.

0:56U.S. jobs growth turned negative in February, plunging 92 ,000 as unemployment ticked up to 4.4%, the government said in its non-farm payrolls report Friday. The decline took investors by surprise after a revised gain of 126 ,000 in January. This follows a historically poor year for the jobs market in 2025 and raises concerns about economic growth, especially combined with costly crude oil. Friday's data painted a far more unsettled jobs picture considering consensus was for 60 ,000 new jobs with unemployment unchanged at 4.3 percent. The January report had raised hopes that things were improving.

1:40This is a weak report, and combined with the war in Iran, it puts the Fed in a tough spot, said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research. The report could be complicated by weather and strikes in the health care sector, but it's still weak. In the immediate aftermath of the report, rate cut odds didn't appear to change much for this month's meeting, according to the CME FedWatch tool, with almost no chance of a move. But chances for a cut by June quickly jumped to nearly 50 % from 1 in 3 the previous day. Digging into the report, health care employment fell 28 ,000 in February as offices of physicians lost 37 ,000 jobs, likely due to strikes.

2:27Information employment also trended lower, and so did federal government employment. Under debate is whether AI advances have led to softer jobs growth. Information services shed 11 ,000 jobs, but honestly, it's difficult to draw a direct correlation to AI, Peterson said. Hourly wages rose 0.4 % from January and 3.8 % year-over-year, and the average work week was unchanged from January. December's jobs report was revised into negative territory, meaning combined jobs growth from December and January is now 69 ,000 fewer than previously reported.

3:09Turning overseas, thousands of ships were trapped in the Persian Gulf and the Strait of Hormuz was closed for all intents and purposes as of Friday. Also on Friday, Kuwait cut production and Qatar warned that all oil shipments out of the Gulf could soon stop, a scenario that could send crude well above$100 per barrel. Rising oil lifted U.S. gas prices to$3.32 a gallon on average as of Friday, the highest since last September, according to AAA. The 10-year Treasury note yield fell one basis point Friday to 4.13 percent, but climbed 17 basis points for the week. The weak jobs report weighed more heavily on shorter-term yields Friday.

3:55The market continues to grapple between the inflationary shock from the war in Iran and higher oil prices and the potential slowdown in growth, Schwab's Howard said. The risk of higher inflation is winning out and pushing rates higher. There are many possibilities with the war, but going forward, we don't expect too much downside on longer-term rates. Fed policymakers soon enter their quiet period ahead of next week's meeting, but a couple speeches by Vice Chair for Supervision Michelle Bowman are on the calendar this week. Neither appears likely to touch on rate policy. On Friday, in an extensive interview on CNBC, Fed Governor Stephen Myron said he thinks neutral rates are about 50 basis points below the Fed's current 3.5 % to 3.75 % target range, implying that current rates are too high.

4:48That contrasts with the views of Cleveland Fed President Beth Hammock, who said last week she thinks rates should stay on pause and she's wary of inflation. As central banks, including the Fed, gather next week, Middle East conflict could also affect their rate decisions and outlook. A rapid end to the conflict or even a gradual reduction of hostilities may be enough to avoid sustained impacts to global growth and inflation, Schwab's experts wrote last week. In these cases, policymakers are likely to remain on the sidelines, waiting to gauge how the conflict plays out and to what degree economic and financial conditions are impacted.

5:29Key data this week includes Wednesday's February Consumer Price Index and Friday's January Personal Consumption Expenditures, or PCE, prices, the Fed's favored inflation metric. A hot January Producer Price Index, or PPI, led to ideas that the PCE might be hot as well. These reports won't include any impact from the war-related oil rallies as they were compiled before the conflict began. Coming days also include Treasury auctions that could help set direction for yields. A three-year note auction tomorrow and a 10-year note auction on Wednesday could be the most influential. They are the first major auctions since the war began, and weak demand, if that's the case, might suggest investors expect to be paid higher yields to hold U.S.

6:18debt amid rising inflation fears. It's unclear how the poor February jobs data might play into auction demand. On the one hand, rising inflation worries could have investors holding out for higher yields. On the other, evidence of a weakening economy might make them more eager to scoop up debt at current levels. On the corporate side, earnings are light this week, but Oracle's report tomorrow afternoon could serve as a tech barometer. Oracle's recent heavy spending and willingness to take on debt for its AI buildup came under scrutiny in recent months. The question is whether the strategy pays off and each earnings report could bring more clarity.

6:59Adobe is another important company reporting this week, putting spotlight on struggling software. Technically, it was a disappointing finish to the week, as the S &P 500 index settled Friday well below long-term support at the 100-day moving average, of 6 ,838, which had held most of the week. It's now below its near-term range of 6 ,800 to 7 ,000. However, dip buyers did step in almost every day last week. The market closed at two-month lows after bouncing off what may constitute a lower support level near 6 ,720 hit on Tuesday. That might be a price to watch this week. The same might be true for the November closing low of 6 ,538.

7:47Major indexes all finished red Friday with scorching 2.4 percent losses for the small cap Russell 2000. Small caps got rattled and fell nearly four percent last week amid rising treasure yields that could raise borrowing costs. Smaller companies often are more exposed to debt markets. Only a handful of sectors dodged the carnage as energy ticked up again on rising oil prices and the defensive staples group also found some buyers. Discretionary and materials delivered the worst performance Friday as economic worries percolated while tech suffered 1.76 % losses on weakness in chips. Financials also laid an egg Friday, falling nearly 1.6 percent.

8:34BlackRock dove 7.2 percent after the asset manager said it had decided to limit withdrawals from one of its private credit funds following a wave of redemption requests in the first quarter, Barron's reported. In individual trading Friday, shares of Marvell Technology popped more than 18 percent after the Semiconductor firm topped analysts' earnings and revenue consensus. Its outlook also indicated revenue that topped expectations. Marvell sees revenue up almost 40 % to near$15 billion in fiscal 2028. Two analysts upgraded their ratings on the stock. Gap shares plunged more than 14 % Friday. The retailer missed consensus on fourth-quarter earnings, which the company blamed on store closures caused by U.S.

9:22coal and snow in January. Revenue met consensus views. Defense stocks, including Lockheed Martin and Boeing, gained Friday as the war showed no sign of calming, and President Trump said an end to conflict would require unconditional surrender by Iran. Samsara surged more than 19 % following an earnings beat for the fleet management software firm. NVIDIA and other chip stocks fell again Friday after Bloomberg reported that the Trump administration has written draft regulations that would restrict AI chip shipments to anywhere in the world without American approval. The PHLX Semiconductor Index fell more than 7 % last week to two-month lows, but remains higher year-to-date.

10:08The chip weakness extended Friday across much of the group, with SanDisk and Micron down nearly 7 % and Intel falling 5%. Weakness in Asian economies that might be hit hardest by rising energy prices could be a pressure point for the chip market. Airlines had a turbulent week and descended again Friday. United Airlines CEO Scott Kirby said Friday that rising fuel prices will have a meaningful impact on the company's financial results this quarter, CNBC reported. United shares fell 3.5 % Friday. Bitcoin, which tends to rise and fall with investor sentiment, slid 4.7 % on Friday, though it still climbed slightly for the week.

10:55The Dow Jones Industrial Average slid 453.19 points Friday, or 0.95%, to 47 ,501.55. The S &P 500 index gave back 90.69 points or 1.33 % to 6 ,740.02, and the Nasdaq composite descended 361.31 points or 1.59 % to 22 ,387.68. For the week, the Dow Jones Industrial Average fell 3.01%, the S &P 500 Index lost 2.02%, and the NASDAQ dropped 1.24%. This has been the Schwab Market Update podcast. To stay informed, visit www.schwab.com slash marketupdate or follow us for free in your favorite podcasting app. And if you like what you've heard, please consider leaving us a rating or a review. It really helps new listeners find the show.

11:58Join us for another update tomorrow.

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