Dow drops 650 points as Iran war sends oil prices surging
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City. (Photo by Spencer Platt/Getty Images)
(NEW YORK) — The Dow Jones Industrial Average plummeted more than 650 points in early trading on Friday as the Iran war continued to spike oil prices.
The Dow fell 657 points, or 1.3%, while the S&P 500 dropped 1.2%. The tech-heavy Nasdaq declined 1%.
In a post on social media on Friday morning, President Donald Trump appeared to rule out a compromise with Iran.
Trump said there would be “no deal with Iran except UNCONDITIONAL SURRENDER!”
Oil prices soared as traders feared a prolonged blockade of the Strait of Hormuz, a trading route that facilitates the transport of about one-fifth of global oil supply.
U.S. crude oil prices topped $88 on Friday, marking a staggering 35% increase from a week earlier.
The stock selloff on Friday extended losses from a day earlier, when the Dow closed down 785 points.
This is a developing story. Please check back for updates.
Federal Reserve Chair Jerome Powell speaks during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on January 28, 2026 in Washington, DC. (Kevin Dietsch/Getty Images)
(NEW YORK) — Hiring increased sharply at the outset of 2026, the year’s first jobs report said, blowing past economists’ expectations and besting sluggish performance from the previous year.
The unemployment rate dropped to 4.3% in January from 4.4% in December, the Bureau of Labor Statistics (BLS) said. Unemployment remains low by historical standards.
The labor market slowed sharply last year, prompting interest rate cuts at the Federal Reserve and concern among some observers about the nation’s economic prospects.
The BLS provided a significant downward revision for job gains in 2025, meaning hiring came in lower than the agency had previously estimated.
The U.S. added 181,000 jobs last year, which amounts to an average of about 15,000 jobs added per month, the BLS said. That updated estimate stands well below a prior count of 584,000 jobs added last year.
The performance in January registered well above the lackluster hiring of a typical month last year.
The U.S. Bureau of Labor Statistics delayed the release of the January data due to a partial government shutdown last week, which helps explain why the jobs report was issued on a Wednesday in the middle of the month, rather than its customary release on the month’s first Friday.
The jobs report arrived weeks after a series of job cuts that slashed tens of thousands of workers combined at a handful of name-brand companies.
Amazon said last month it planned to cut about 16,000 employees as it seeks to “strengthen” its business by reducing “layers” and “bureaucracy” within its workforce.
A day earlier, UPS announced it plans to cut as many as 30,000 employees this year. Pinterest also unveiled an effort to slash 15% of its staff, according to a securities filing. The company boasts about 4,500 employees worldwide, a securities filing shows.
So far, the cooling labor market has avoided widespread job losses, making the recent flurry of layoffs an outlier, analysts previously told ABC News. The high-profile cuts reflect trends in tech and some other sectors, however, where companies have reversed a pandemic-era hiring blitz and pivoted in response to artificial intelligence.
The Fed slashed interest rates three consecutive times last year in an effort to boost the flagging labor market. In January, the Fed opted to hold interest rates steady, taking a cautious approach due in part to elevated inflation.
The benchmark rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.
Still, Fed Chair Jerome Powell appeared to view the economy in a favorable light, saying it is expanding at a “solid pace” during a Jan. 28 press conference.
“While job gains have remained low, the unemployment rate has shown some signs of stabilization,” Powell added.
Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.
President Donald J. Trump disembarks Marine One at Valley International Airport in Harlingen, Texas Tuesday, Jan. 12, 2021, and boards Air Force One en route to Joint Base Andrews, Md. (Official White House Photo by Shealah Craighead. Via Flickr)
(NEW YORK) — Inflation held steady in February, maintaining price increases at elevated levels in the weeks before the U.S.-Israeli war with Iran sent gasoline prices surging and stoked heightened concern about affordability. The reading matched economists’ expectations.
Prices rose 2.4% in February compared to a year earlier, leaving the inflation rate unchanged from January, U.S. Bureau of Labor Statistics data showed. Inflation stands slightly higher than the Federal Reserve’s target rate of 2%.
Oil prices have surged since the war with Iran late last month, ratcheting up costs for gasoline and airfare, and threatening to push up prices for a vast array of goods reliant on diesel-fuel transport, some analysts previously told ABC News.
Fuel prices rose in February as traders anticipated the possible outbreak of war with Iran, government data showed. Gasoline prices climbed more than 3% in February from a month earlier, according to the inflation report.
Food prices climbed 3.1% in February compared to a year earlier, registering above overall inflation and maintaining their pace from the previous month.
A lackluster jobs report last week showed the U.S. economy lost 92,000 jobs in February, which marked a reversal of fortunes for the labor market and erased most of the job gains recorded in 2026.
The unemployment rate ticked up from 4.3% in January to 4.4% in February, the BLS said. Unemployment remains low by historical standards.
Sluggish hiring has coincided with elevated inflation, threatening a period of “stagflation.”
Those economic headwinds helped set the conditions before the outbreak of war with Iran, which spiked oil prices and risked price increases for a host of diesel-fuel transported goods.
U.S. crude oil prices hovered at about $86 per barrel on Tuesday, surging more than 30% since a month earlier.
The average price of a gallon of gasoline in the U.S. soared to $3.53 on Tuesday from $2.92 a month prior, AAA data showed.
Still, the overall economic picture remains mixed.
A government report in February on gross domestic product (GDP) showed the economy grew at a tepid annualized pace of 1.4% over the final three months of 2025. That reading indicated a dramatic cooldown from the strong annualized growth of 4.4% recorded in the previous quarter, U.S. Commerce Department data showed.
The Iran war threatens to slow U.S. economic growth since oil-driven price increases could weigh on consumers and businesses, analysts previously told ABC News.
The potential combination of higher inflation and slower growth could also pose a challenge for the Fed, putting pressure on both sides of its dual mandate to manage prices and maintain maximum employment.
If the Fed opts to lower borrowing costs, it could spur growth but risk higher inflation. On the other hand, the choice to raise interest rates may slow price increases but risks a cooldown of economic performance.
The central bank held interest rates steady at its most recent meeting in January, ending a string of three consecutive quarter-point rate cuts. Policymakers will make their next interest-rate decision on March 18.
The Anthropic logo displayed on the stage during the company’s Builder Summit in Bengaluru, India, on Monday, Feb. 16, 2026. (Samyukta Lakshmi/Bloomberg via Getty Images)
(NEW YORK) — Artificial-intelligence firm Anthropic sued the Trump administration on Monday over the Pentagon’s choice to designate it a “supply-chain risk,” legal filings show.
A spokesperson for Anthropic said the legal action “does not change our longstanding commitment to harnessing AI to protect our national security, but this is a necessary step to protect our business, our customers, and our partners.”
A Department of Defense spokesperson told ABC News: “As a matter of Department of War policy, we do not comment on litigation.”
This is a developing story. Please check back for updates.
