The SPDR S&P 500 ETF (SPY) is having a rough week. On March 6, SPY tanked 1.31% due to a weak February nonfarm payrolls report and rising oil prices stemming from geopolitical tensions. The ETF declined to $674.19, marking another down day in a turbulent stretch for the broader market.
The employment data hit hard. Nonfarm payrolls fell by 92,000 in February, a sharp drop against the January gain of 126,000 and far below the growth of 50,000 that economists expected. The unemployment rate also rose to 4.4% from 4.3%. This kind of weakness in the labor market fuels recession fears and sends investors running for the exits.
But it's not just jobs. With no end in sight to the war with Iran, oil is nearing $90, and there are now calls for $100 oil. Escalating tensions in the Middle East are rattling energy markets and dragging down investor sentiment. When oil spikes like this, it hits everything from airline stocks to consumer spending to inflation expectations—which is exactly why the whole market is feeling the pressure right now.
The combination of soft employment data and geopolitical chaos is a classic recipe for market weakness. SPY investors are bracing for more volatility ahead as these two headwinds collide.