Oil jumps 25% in largest daily gain in 40 years

Equity markets finished Friday on a weaker note as investors responded to disappointing United States labour market data and ongoing geopolitical tensions. United States payrolls unexpectedly declined by 92,000 in February while the unemployment rate edged up to 4.4 per cent, raising questions about the resilience of hiring momentum. Ordinarily, weaker employment data might strengthen expectations for interest rate cuts, but the sharp rise in oil prices complicated the outlook by increasing concerns about renewed inflation pressures. Investors therefore adopted a more cautious stance. Energy and other defensive sectors outperformed as higher crude prices supported earnings prospects, while broader equity markets struggled. The United States dollar also strengthened as a safe haven, reaching a three month high against the euro.

For the week as a whole, global equities came under notable pressure as markets shifted into a risk off environment. Oil prices surged by more than 30 per cent amid escalating tensions in the Middle East, marking the largest weekly increase in more than two decades and heightening fears of a renewed energy driven inflation shock. Major United States equity markets declined between 2 and 5 per cent, while European and emerging market equities recorded steeper losses of roughly 5 to 10 per cent. Government bond yields also moved higher over the week as rising oil prices pushed inflation expectations upward. The combination of geopolitical uncertainty, weaker economic data and growing questions around the timing of central bank rate cuts contributed to elevated volatility and cautious investor sentiment.

Latest market and economic update

• Asian shares tumbled this morning as surging oil prices, driven by escalating Middle East tensions, unsettled investors and reignited global inflation fears. Japan’s Nikkei 225 and South Korea’s Kospi plunged over 7% while regional markets broadly declined. Chinese inflation data offered mixed signals as rising energy costs and geopolitical uncertainty heightened volatility across the region.

• U.S. equity futures fell on Sunday evening as escalating Middle East tensions pushed oil above $100 a barrel, heightening inflation concerns. S&P 500, Nasdaq-100 and Dow Jones Industrial Average futures dropped about 1.7–1.8%. Rising crude prices and Iran naming Mojtaba Khamenei as successor to Ali Khamenei unsettled investors and complicated the Federal Reserve policy outlook.

• Europe’s STOXX 600 posted its largest weekly drop in nearly a year, down 5.5%, as the Middle East conflict persisted and weaker-than-expected U.S. jobs data clouded the outlook for interest rate cuts. Banks and healthcare shares fell, while energy and defence sectors gained amid higher oil prices and increased weapons demand, with volatility remaining elevated.

• The U.S. dollar surged as soaring oil prices and escalating Middle East conflict drove investors towards safe-haven assets. The euro fell to about $1.1517 against the dollar, while sterling and other currencies weakened. Fears of disrupted energy supplies and prolonged war raised concerns over inflation, weaker global growth and fewer interest rate cuts.

• Oil prices surged more than 25% on Monday, reaching their highest level since July 2022, as the expanding U.S.–Israeli conflict with Iran raised fears of supply disruptions. Concerns over curtailed Middle East output and shipping risks through the Strait of Hormuz fuelled gains, with analysts warning prolonged disruptions could drive prices towards $130–$150 per barrel.

• Iran’s Assembly of Experts appointed Mojtaba Khamenei as supreme leader after his father, Ayatollah Ali Khamenei, died in U.S. and Israeli strikes. A mid-ranking cleric with strong Revolutionary Guards ties, he was long viewed as a likely successor. President Trump demanded “unconditional surrender” and pledged to rebuild Iran’s economy stronger than before.

• Federal Reserve Governor Christopher Waller said a spike in gas prices may shock Americans but is unlikely to cause sustained inflation. He noted short-term energy price rises pose challenges, while prolonged increases could have broader economic effects, as the Fed continues monitoring price pressures and their impact on monetary policy decisions.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

• Samsung Electronics and SK Hynix have reportedly been chosen as the exclusive suppliers of sixth-generation high-bandwidth memory (HBM4) for Nvidia’s next flagship AI accelerator, Vera Rubin. The selection strengthens the South Korean firms’ position in the fast-growing AI chip supply chain, while leaving U.S. rival Micron Technology out of the upcoming product cycle.

• Novo Nordisk and Hims & Hers Health are expected to announce a partnership to distribute obesity treatments, including Wegovy and Ozempic, according to a report by Bloomberg News. The agreement would end a legal dispute over compounded semaglutide products and shift the companies from competition toward collaboration in selling weight loss medications.

• S&P Dow Jones Indices said Vertiv, Lumentum, Coherent and EchoStar will join the S&P 500 from 23 March. The companies will replace Match Group, Molina Healthcare, Lamb Weston and Paycom. Vertiv and EchoStar shares rose in extended trading on Friday, reflecting expected demand from index tracking funds.

• Nvidia has introduced a variable compensation plan for fiscal 2027 that sets a target cash bonus of $4 million for chief executive Jensen Huang, linked to revenue targets. The move follows strong recent results and a robust outlook driven by continued demand for artificial intelligence processors from major technology companies.

• Donald Trump met executives from major defence contractors including Lockheed Martin, RTX, BAE Systems and Northrop Grumman to discuss boosting weapons production after US military operations, including strikes involving Iran. The Pentagon is seeking to replenish depleted stockpiles and expand output of precision guided munitions and air defence systems.

• Boeing is close to securing its first major aircraft order from China in nearly a decade, potentially including up to 500 737 MAX jets and around 100 widebody 787 and 777X aircraft, according to Bloomberg News. The deal, still under negotiation, could be announced during Donald Trump’s state visit to Beijing.

• Oracle Corporation and OpenAI have cancelled plans to expand their artificial intelligence data center in Abilene, Texas, due to financing issues and changing needs. The decision opened the site to Meta Platforms Inc., with Nvidia Corporation facilitating discussions and ensuring its AI chips continue to be used at the Stargate campus.

• Japan’s SoftBank Group is seeking a $40 billion loan, mainly to fund its investment in AI firm OpenAI, potentially its largest US-dollar borrowing. The 12-month bridge loan, likely underwritten by four banks including JPMorgan Chase, highlights founder Masayoshi Son’s AI ambitions. SoftBank has invested $30 billion in OpenAI, amid asset sales and a lowered credit outlook.

• Robinhood launched its $658.4 million venture fund on the New York Stock Exchange under the ticker ‘RVI’, giving retail investors access to private technology firms such as Databricks, Ramp and Revolut. The fund targets late-stage companies, aiming to reduce risk while offering exposure to high-value private assets.

• United Airlines warned that surging jet fuel prices from the Iran conflict could significantly reduce first-quarter results, even as travel demand remains strong. With tickets sold in advance, carriers may have to absorb higher fuel costs, pressuring margins. First-quarter adjusted profit per share is now projected between 5 and 22 cents.

• Analysts at Yardeni Research warned global equities could fall amid Middle East conflict, forecasting a 10–15% pullback depending on disruption at the Strait of Hormuz. Prolonged conflict may drive oil prices higher, raising stagflation risks, while energy shares and commodities act as hedges, and emerging-market equities face pressure.

• BMO Capital Markets upgraded Okta to Outperform with a $97 target, citing strong demand for identity management as businesses adopt artificial intelligence agents. Okta’s platforms are well positioned to manage human and machine identities, with growth expected in subscription revenue and long-term potential from AI agent governance across enterprise networks.

• Marvell Technology was upgraded to Buy by Benchmark and Bank of America after strong results highlighted accelerating AI-driven growth. FY27 and FY28 revenue and EPS guidance were raised, driven by demand for custom chips, data-centre products, and optical connectivity, with opportunities from Microsoft and Amazon, while valuation remains attractive.

• Oppenheimer initiated coverage of CoreWeave with an Outperform rating and $140 target, citing strong AI infrastructure growth, specialised cloud services, and large market opportunity. Near-term capital and debt concerns are deemed short-sighted, with financial strength and cash returns expected to improve as the company exits its hyper-growth phase.

• Needham & Company highlights an accelerating “unmanned supercycle” benefiting drone-focused companies amid rising global defence spending. Key firms include Amprius, AeroVironment, Draganfly, Ondas, Red Cat, and Unusual Machines, poised to benefit from defence and security demand.

• Barclays upgraded DHL Group to “overweight” with a €54 12-month target, citing Middle East tensions tightening airfreight supply. The bank raised FY26 EBIT to €6.5bn, forecasts EPS of €3.46, and highlights DHL’s strong market share in Express and global trade lanes, while noting potential risks from competition and regional disruptions.

Upcoming data and events

Monday’s main economic releases are the Conference Board’s Employment Trends Index, combining eight labour-market indicators to assess job conditions, and the New York Federal Reserve’s consumer inflation expectations report, providing insights into Americans’ outlook on future price pressures and potential implications for monetary policy and markets.