The U.S. labor market bounced back in March, with job creation much stronger than expected though the broader picture of a slow-growth labor market held intact.

Nonfarm payrolls rose a seasonally adjusted 178,000 during the month, a reversal from the 133,000 decline in February and better than the Dow Jones consensus estimate for 59,000, the Bureau of Labor Statistics reported Friday. February’s number was revised down by 41,000 while January was revised up by 34,000 to 160,000, putting the three-month average around 68,000.

With job creation higher, the unemployment rate edged lower to 4.3%.

As has been the case, health care was responsible for much of the growth, with the sector adding 76,000. A strike at health-care provider Kaiser Permanente in February hit the sector. The BLS said ambulatory health care services rose by 54,000, with 35,000 coming from the strike workers returning.

Construction saw an increase of 26,000, while transportation and warehousing posted a gain of 21,000.

On the downside, the federal government saw a loss of 18,000, while financial activities lost 15,000.

Though the unemployment rate posted a decline, the move largely came from a decline of 396,000 in the labor force. The share of working-age Americans in the labor force fell to 61.9%, its lowest since November 2021.

The survey of households, which is used to compute the unemployment rate, showed 64,000 fewer people holding jobs. An alternative unemployment figure that counts discouraged workers and those holding part-time jobs for economic reasons edged up to 8%.

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Nonfarm payrolls are expected to bounce back — barely — in March as the bar keeps getting lower for what constitutes a healthy labor market.

The U.S. economy is projected to show job gains of 59,000 for the month, an anemic rate by the standards of previous years this decade but enough to keep the unemployment rate at 4.4%.

If the estimate is reasonably accurate, it actually would represent above-trend job growth for a labor market that has created virtually no jobs over the past year.

Immigration restrictions, shifting demographics and geopolitical uncertainty have left companies eager neither to hire nor fire workers en masse, resulting in a static labor market and a series of ho-hum monthly counts from the Bureau of Labor Statistics. The BLS will release the number Friday at 8:30 a.m. ET, though the stock market will be closed in observance of the Good Friday holiday.

“We have to revise our idea of what a good or bad job number is,” said Guy Berger, chief economist at Homebase, which provides workforce management services for small businesses.

A report like February’s showing job losses “would have been raising alarm bells about the state of the labor market,” he added. “Now we’re like, yeah, that was a very bad report, but it doesn’t freak anybody out about the job market. I didn’t look at that report and say, wow, we’re on the verge of tipping into recession.”

Echoing views expressed by Federal Reserve Chair Jerome Powell and other central bankers, Berger said he’s more focused on the unemployment rate as a gauge of labor market stability.

In a recent report, the St. Louis Fed updated previous research on the breakeven level for job growth. The bank’s economists now think that number could be as low as 15,000, with a high end of 87,000.

That’s a steep drop from an estimate as recent as April 2025 that showed the breakeven level at 153,000, and an update in August of that year putting the number between 32,000 to 82,000.

In other words, the labor market needs nowhere near the job growth it required previously to keep the population near full employment.

“Things have been slowly getting worse each for the last few years,” Berger said, but added, “There’s no real sign of us tipping into a recession.”

Some economists on Wall Street disagree. Goldman Sachs, Moody’s Analytics and others in recent days have raised their odds of recession in the next 12 months, with a focus on threats from a slowing jobs picture and surging energy costs.

Earlier this week, BLS data showed that the rate of hiring as a share of the workforce fell to 3.1%, its lowest level since the Covid recession in 2020 and, before that, January 2011.

Still, Homebase’s data is consistent with other indicators, including the ADP private payrolls report for March, showing modest gains in payrolls. February’s loss of 92,000 jobs came in part due to a since-resolved strike at health-care provider Kaiser Permanente that sidelined some 31,000 workers in California and Hawaii.

Oracle rose in premarket trading on Wednesday as the multinational tech conglomerate looks to cut thousands of jobs to free up cash to build AI data center infrastructure.

The software giant has started telling its 162,000-strong workforce that thousands of people will be affected in a new round of layoffs, two people familiar with the matter told CNBC on Tuesday. Its shares were last up 2.6% in early market trading on Wednesday. Oracle declined to comment on CNBC’s report.

Investors remain uneasy about the company’s hefty capital expenditure on data centers that can handle AI workloads. While shares closed up nearly 6% Tuesday, Oracle’s stock is down roughly 25% so far this year.

The company announced plans in early February to fundraise up to $50 billion during the 2025 calendar year through a mixture of debt and equity, to expand capacity for contracted cloud demand from customers, including Nvidia, Meta, OpenAI, Advanced Micro Devices and xAI.

Major AI hyperscalers Alphabet, Microsoft, Meta and Amazon have also committed to capital expenditure of nearly $700 billion to fund their AI buildouts this year, which has alarmed investors as it will reduce the companies’ free cash flow without a clear promise on near-term returns.

Job cuts at Oracle will help free up cash flow, Barclays analysts said in a note on Thursday. The investment bank said it is its overweight rating of the stock.

“Given ORCL’s existing FY26 Restructuring Plan and prior reports, we do not see today’s layoffs as being a surprise to the market, which seemed to have appreciated the cost savings potential from ORCL’s actions amidst the company’s rapid build-out of AI infrastructure capacity,” the analysts said.

Barclays also highlighted that Oracle generates less profit per employee than its competitors, with workers less productive compared to the average. The analysts expect that Oracle will triple its revenue over the next few years due to minimal headcount growth and low operating costs.

Gasoline prices over $4 a gallon, part of an ongoing supply shock in the energy markets, might seem like a cue for the Federal Reserve to raise interest rates to head off inflation. At least for now, that looks like a bad bet.

Investors instead expect the central bank to hold benchmark rates steady, or even pivot back toward cuts later in the year as policymakers weigh the risk that higher energy prices will slow growth more than they fuel lasting inflation.

In market-moving remarks Monday, Fed Chair Jerome Powell signaled that raising rates now could be the wrong medicine for an economy already facing a softening labor backdrop and elevated recession concerns on Wall Street.

Asked whether he thought policymakers should consider rate increases here, Powell responded: “By the time the effects of a tightening in monetary policy take effect, the oil price shock is probably long gone, and you’re weighing on the economy at a time when it’s not appropriate. So the tendency is to look through any kind of a supply shock.”

The comments come at a critical juncture for markets, which have struggled to get a handle on the Fed’s intentions amid a bevy of conflicting and perpetually shifting economic signals.

Just a few days ago, traders began to entertain the possibility that the Fed’s next move could be a hike. That mindset followed some unsettling inflation news: Import prices rose much more than expected in February, even ahead of the war-related oil spike, while the Organization for Economic Cooperation and Development raised its U.S. inflation forecast dramatically, to 4.2% for 2026.

However, Powell’s comments — complete with the usual Fed qualifiers that there are potential cases for both hikes or cuts — helped bring the market back off the hawkish position. Before the war, markets had been looking for two and possibly even three cuts this year in anticipation that inflation could continue to drift back to the Fed’s 2% target and central bankers would switch their focus to supporting the labor market.

Futures prices Tuesday morning pointed to just a 2.1% chance of a rate hike by year-end, according to the CME Group’s FedWatch tool. That’s despite headlines noting that regular unleaded gasoline had eclipsed $4 nationally at the pump and U.S. crude oil priced above $102 a barrel.

While there’s still plenty of uncertainty about where rates are headed, Wall Street commentary shifted back to expectations for cuts. To be sure, odds are still low for a reduction — about 25% — but they have climbed considerably over the past two days.

“Central bankers’ bark will be bigger than their bite” when it comes to fighting higher prices, wrote Rob Subbaraman, head of global macro research at Nomura.

“Right now, it makes sense for central banks to do nothing but sound hawkish in order to help anchor inflation expectations as headline inflation spikes,” he added. “However … the pass-through to wage growth and core inflation is likely to be limited, and instead the Middle East war could quickly morph into a global growth shock.”

Indeed, concerns about the impact that the oil price spike will have on growth superseded the worries about consumer prices, echoing Powell’s worry that hiking now won’t fix energy costs and could cause more trouble later. Policymakers are worried less about the immediate hit from energy-driven inflation than the risks that higher prices could sap consumer demand and hiring.

Joseph Brusuelas, chief economist at RSM, said central bankers should fear “demand destruction” brought on by the energy shock.

“Time is not an ally of the American economy,” he wrote. “The bigger risk is what comes next: demand destruction. That’s the economic term for what happens when high prices force people and businesses to spend less. It sounds abstract, but it’s very concrete — it means fewer cars sold, fewer homes bought, fewer restaurant meals, fewer business investments, and eventually fewer jobs.”

The Fed is in a bind policy-wise, Brusuelas added: Raising rates now risks slowing economic growth further, while standing put runs the chance that the oil situation gets worse.

Federal Reserve Chair Jerome Powell last week pushed back when asked whether stagflation posed a threat to the U.S. economy. His successor may face a tougher challenge, as Wall Street forecasters raise their expectations of recession, brought on in part by the Iran war and potential for higher prices.

In recent days, economists have pulled up their risk assessments of a U.S. contraction amid heightened uncertainty over geopolitical risk and a labor market that for the past year has shown strains over the past year.

Moody’s Analytics’ model has raised its recession outlook for the next 12 months to 48.6%. Goldman Sachs boosted its estimate to 30%. Wilmington Trust has the odds at 45%, while EY Parthenon has it at 40%, with the caveat that “those odds could rapidly rise in the event of a more prolonged or severe Middle East conflict.”

In normal times, the risk for a recession in any given 12-months span is around 20%. So while the current predictions are hardly certainties, they signify elevated risk.

The situation poses a tough challenge for policymakers who are being asked to balance threats to the labor market against sticky inflation.

“I’m concerned recession risks are uncomfortably high and on the rise,” said Mark Zandi, chief economist at Moody’s Analytics. “Recession is a real threat here.”

Talk of an economic contraction has accelerated as the war with Iran has dragged on.

An oil shock has preceded virtually every recession the U.S. has seen since the Great Depression, save for the Covid pandemic. Prices at the pump have risen by $1.02 a gallon over the past month, an increase of 35%, according to AAA.

While economists still debate the pass-through impact from higher energy, the trend has held.

“The negative consequences of higher oil prices happen first and fast,” Zandi said. “If oil prices stay kind of where they are through Memorial Day, certainly through the end of the second quarter, that’ll push us into recession.”

Like his fellow forecasters, Zandi said his “baseline” expectation is that the warring sides find a diplomatic off-ramp, oil flows again through the Strait of Hormuz and the economy can avoid a worst-case scenario.

To be sure, economists as a lot are negative and subject to the old trope about predicting nine of the last five recessions. Markets also have been wrong about where the economy is headed. A portion of the yield curve — or the spread between various Treasury maturities — most closely watched by the Fed has sent repeated false recession signals for much of the past 3½ years.

But the threat of a prolonged war, pressure on a consumer who drives more than two-thirds of all growth, and a labor market that created virtually no jobs in 2025 collectively raises the risk that the expansion could falter.

“That path through is increasingly narrow, and it’s getting increasingly difficult to see the other side,” Zandi said.

Consumers also are pessimistic. Consumer site NerdWallet said its March survey showed 65% of respondents expect a recession in the next 12 months, up 6 percentage points from the month before.

Beyond energy prices, economists say the labor market is a key pressure point.

The U.S. economy created just 116,000 jobs for all of 2025 and lost 92,000 in February. While the unemployment rate has held steady at 4.4%, that’s largely been because of a dearth of firing rather than a burst in hiring.

Indeed, stocks have had a rough ride during the war. The Dow Jones Industrial Average has fallen more than 5% during the hostilities — important because consumer spending and sentiment have been supported by higher-income households benefiting most from rising equity prices.

Gross domestic product is on track to grow at a 2% pace in the first quarter, according to the Atlanta Fed’s GDPNow tracker of rolling data. However, that’s coming off an increase of just 0.7% in the fourth quarter, the product in part of the government shutdown. Economists had expected that the drain on growth in Q4 would translate to a boost in Q1, but the effects of that appear to be modest.

Still, if global leaders can find an end to the war soon, the economy again is expected to skirt the gloomiest predictions. Stimulus from the One Big Beautiful Bill in 2025 is projected to goose growth, with lower regulations and a boost in tax returns that could help consumers cope with elevated prices. A sustained rise in production also is a factor in the economy’s favor.

“There is support underneath,” said North, the Allianz economist. “That makes me real hesitant to use the ‘R’ word. But certainly, I think we’re seeing a slowdown this year.”

NEW YORK — Andrew Leonard showed up at John F. Kennedy International Airport at 4:45 a.m. on Monday for his 7 a.m. flight to Seattle. Nearly two hours later, he made it through security and to his gate just in time for boarding.

“I fly out of this terminal all the time and this is insane,” said Leonard, a 34-year-old performing arts teacher in New York who was en route to Seattle ahead of a family vacation to Hawaii.

He is one of tens of thousands of travelers around the U.S. who are facing extra-long security wait times at major airport hubs such as Atlanta, New York and Houston due to elevated absences of Transportation Security Administration officers. TSA workers are facing a second missed full paycheck this week as a partial government shutdown continues.

White House border czar Tom Homan said Sunday said the administration would deploy Immigration and Customs Enforcement agents to airports on Monday to help ease security lines amid the Department of Homeland Security shutdown.

ICE agents weren’t visible at checkpoints at Kennedy airport’s Terminal 8 early Monday, and it wasn’t clear where or when agents would be deployed. DHS and TSA didn’t immediately respond to a request for comment early Monday.

Homan told CNN’s “State of the Union” on Sunday that the ICE agents will be “helping TSA move those lines along,” including by guarding exit doors to relieve TSA agents so they could screen travelers. “We’re simply there to help TSA do their jobs in areas that don’t need their specialized expertise.”

TSA’s more than 50,000 officers have been working without their regular paychecks since the partial government shutdown began in mid-February. The shutdown comes as Democrats in Congress demand changes to how federal immigration enforcement operates in exchange for releasing DHS funding after two U.S. citizens were shot and killed by officers in Minneapolis. 

Hundreds of TSA officers have quit since the shutdown started, according to their union, the American Federation of Government Employees.

Members of the travel industry, including airline executives, have blasted lawmakers for failing to pay essential government workers during repeated shutdowns that have snarled travel.

In early 2019 and in late 2025, two federal government shutdowns ended shortly after travel disruptions escalated following higher-than-typical absences of air traffic controllers. Their pay isn’t affected by this impasse.

New York’s LaGuardia Airport was closed on Monday morning following a collision of an Air Canada regional jet and an emergency vehicle on Sunday night. Some passengers told CNBC they had switched to fly out of Kennedy because of the disruptions.

The Federal Aviation Administration issued a ground stop at Newark Liberty International Airport in New Jersey on Monday morning after air traffic controllers evacuated the tower because of a burning smell coming from an elevator, adding to travel chaos around New York City.

— CNBC’s Garrett Downs contributed to this article.

President Donald Trump on ​Saturday ​threatened ​to send federal ⁠immigration agents ‌to U.S. ⁠airports unless congressional Democrats immediately ‌agree to fund the Department of Homeland Security.

“I will move our ⁠brilliant and ‌patriotic ‌ICE Agents to the Airports ⁠where they will ⁠do ⁠Security like no one ​has ‌ever seen before,” Trump wrote in ​a Truth Social post. The Trump administration has faced heavy criticism for aggressive deportation tactics by Immigration and Customs Enforcement and Border Patrol agents.

Trump claimed ICE agents handling airport security would arrest immigrants who are in the U.S. illegally, specifically targeting individuals from Somalia.

In a separate post later in the day, Trump said he plans to move ICE agents into airports as soon as Monday, telling them to “GET READY.”

“I look forward to moving ICE in on Monday, and have already told them to, ‘GET READY.’ NO MORE WAITING, NO MORE GAMES!” he wrote.

When asked for comment, the White House referred to Trump’s social media. DHS did not immediately respond to CNBC’s requests for comment.

A bipartisan group of senators met with DHS border czar Tom Homan last night to discuss additional immigration enforcement concessions made by the White House on Friday in an attempt to end the partial government shutdown, POLITICO reported, citing lawmakers in attendance.

The Senate is in session Saturday and Sunday, working on other legislative issues, but it is unclear whether further talks or a vote on the new DHS funding proposal will take place.

Democrats are demanding changes to how federal immigration enforcement operates in exchange for releasing the funding. The White House and Democrats have been trading proposals for over a month but have not yet come to an agreement on a deal.

The DHS shutdown has been less disruptive than last year’s record-long government shutdown. But since much of DHS is considered essential, employees are required to work without pay.

The effects of the funding lapse and lack of pay are being felt at U.S. airports, where Transportation Security Administration agents are quitting or calling out sick. DHS employees missed their first full paychecks last week.

The shortage of agents has caused obscenely long lines at security checkpoints, including in Atlanta and Houston, where spring break travel is in full swing.

“If a deal ⁠isn’t ‌cut, you’re going to see what’s happening today ⁠look like child’s play,” Transportation Secretary Sean Duffy told CNN on Friday. Earlier in the week, Duffy warned that smaller airports could shut down entirely soon due to staffing.

In a separate post earlier in the day, Tesla CEO and former Trump advisor Elon Musk said he would like to cover the paychecks of TSA ⁠officers as the shutdown continues.

“I would like to offer to pay the salaries of ‌TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout ​the country,” Musk, the world’s richest man, said in a post on X.

Musk did not immediately respond to a request for comment.

The average salary for TSA agents is about $46,000 to $55,000, according to a recent Associated Press report.

It’s unclear how such an offer would work.

Last year, Trump announced a wealthy, unnamed donor provided $130 million to help cover military pay shortfalls caused by the administration’s first government shutdown, the longest in history. That mystery donor was revealed to be Timothy Mellon, an heir to a renowned Gilded Age banking family, The New York Times later reported.

But Mellon’s donation worked out to only about $100 per service member. It costs nearly $6.4 billion to pay U.S. troops every two weeks. And such a donation might have violated the Antideficiency Act, which bars federal agencies from spending funds that have not been appropriated by Congress, the Times reported.

— Annie Nova and Dan Mangan contributed reporting

Travelers struggled with hours-long security lines at some airports as officials warned of Transportation Security Administration staffing shortages amid the partial government shutdown.

Houston’s William P. Hobby Airport told customers Sunday to arrive as early as 5 hours before their flights, and warned that security wait times could exceed three hours.

The partial government shutdown has meant that TSA officers are working but without regular paychecks.

TSA callouts rose during the 2018-2019 government shutdown, prompting the closure of some checkpoints and leading to longer screening lines. It ended hours after a shortfall of air traffic controllers curtailed flights on the East Coast. The current shutdown, however, is affecting only Department of Homeland Security employees, including TSA officers.

Hartsfield-Jackson Atlanta International Airport, the world’s busiest, as well as Louis Armstrong New Orleans International Airport, said travelers should arrive at least 3 hours early because of the disruptions.

“Due to impacts from the federal government’s partial shutdown, there is a shortage of TSA workers at the security checkpoint,” New Orleans’ airport said on a post on X. “The Airport has staff on hand to help keep the lines organized, and we will continue to coordinate with our federal partners with the TSA as they navigate this issue.

Sunday’s disruptions rattled the airline industry and travelers just as the busy spring-break travel period gets underway.

“Airlines have done their part to prepare; now Congress and the administration must act with urgency to reach a deal that reopens DHS and ends this shutdown,” Chris Sununu, chief executive of Airlines for America, an industry group that represents American Airlines, Delta Air Lines, Southwest Airlines, United Airlines, and others, said in a statement. “America’s transportation security workforce is too important to be used as political leverage.”

The disruptions come as airlines are grappling with the fallout of the U.S. and Israel’s attacks on Iran, which have led to thousands of canceled flights and driven up the cost of fuel, their biggest expense after labor.

Private sector hiring was a bit better than expected in February, though most of the job creation came from just two sectors, ADP reported Wednesday.

Companies added a seasonally adjusted 63,000 workers during the month, an improvement from the downwardly revised 11,000 in January and better than the Dow Jones consensus estimate for 48,000, according to the payrolls processing firm’s latest update.

Though the total beat expectations, the issue of breadth continued to be a problem for the labor market.

Education and health services, an industry that has been the primary driver for job creation, added 58,000 jobs for the month, easily leading all sectors. After that, construction contributed 19,000, with the two industries offsetting stagnant growth across most other sectors.

Professional and business services saw a decline of 30,000 positions, manufacturing lost 5,000 and trade, transportation and utilities was off 1,000. Other than a gain of 11,000 in information services, there was little movement elsewhere. Manufacturing continued to decline despite President Donald Trump’s efforts to use tariffs to reshore jobs in the industry.

On the wage side, pay grew 4.5% for those staying in their jobs, unchanged from January. However, the wage gains for job switchers moved down to 6.3%, a 0.3 percentage point decline from the prior month. Those results reduced the incentive for changing jobs to the lowest level since ADP began tracking the metric.

“We’ve seen an increase in hiring and pay gains remain solid, especially for job-stayers,” said ADP chief economist Nela Richardson. “But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs.”

In a switch from recent months, job creation was concentrated at businesses with fewer than 50 employees. That group saw gains of 60,000, while big businesses with 500 or more workers added 10,000 and medium-sized firms reported a drop of 7,000.

Job growth has taken a step down over the past year as the Trump administration has clamped down on illegal immigration and as the pace of post-Covid hiring has slowed. While companies have been reluctant to add workers, layoffs have remained low as well.

The report comes with questions over the state of the labor market as well as worries about stubbornly higher inflation, the latter coming even more into view with the fighting in Iran and the Middle East.

Recent statements from Federal Reserve officials indicate somewhat higher confidence that the jobs picture is stabilizing. At the same time, worries are increasing that a bump in oil prices will drive inflation higher. Traders are now indicating the next Fed interest rate cut won’t come until at least July and have lowered the probability for a second cut this year, according to the CME Group’s FedWatch tracker.

The ADP release precedes Friday’s nonfarm payrolls report from the Bureau of Labor Statistics. Wall Street is looking for a February increase of 50,000 jobs from the report, which unlike ADP also includes government hiring. Economists expect the unemployment rate to hold steady at 4.3%.

Nvidia, Amazon and Alphabet are among the big tech firms scrambling to ensure the safety of their employees who are traveling through or based in the Middle East after joint U.S.-Israel strikes on Iran over the weekend.

The massive attack on Iran killed Supreme Leader Ayatollah Ali Khamenei, among others, and Iran retaliated with strikes on Israeli and U.S. bases across the Gulf. The conflict has disrupted civilian life, internet access in Iran, flight routes and energy shipments across the region.

Chip tech leader Nvidia temporarily closed its Dubai offices, with employees there working remotely, according to an email reviewed by CNBC that was sent by CEO Jensen Huang to all employees early Tuesday.

Huang said in his memo that Nvidia’s crisis management team has been “working around the clock and actively supporting affected employees and their families” in the Middle East, including around 6,000 Nvidia employees based in Israel.

In 2019, Nvidia acquired Mellanox, an Israeli company that makes ethernet switches and other networking hardware, for around $7.13 billion, the largest deal in Nvidia’s history at that time. And today, outside of the U.S., Israel represents Nvidia’s largest research and development base.

As of Tuesday morning, all Nvidia employees impacted by the conflict and their immediate families were safe, Huang said.

“Nvidia has deep roots in the region,” Huang wrote. “Thousands of our colleagues live there, and many more across the globe have family and friends affected by these events. Like you, I am watching with great concern for the safety of our Nvidia families.”

The State Department said Monday that Americans should “depart now” from countries across the Middle East using available commercial transportation, citing “serious safety risks.” By Tuesday afternoon, the agency said it was working to secure military aircraft and charter flights to evacuate Americans from the region amid escalating instability.

The disruptions to air travel meant dozens of Google employees have been stranded in Dubai after a sales conference, according to sources, who asked not to be named in order to discuss sensitive matters.

The company’s cloud unit held its “Accelerate” sales kickoff in Dubai last week.

A memo was sent to some cloud employees on Sunday morning that noted it still has team members on the ground, adding that recent attacks are “concerning,” according to employees, who asked not to be named in order to speak about internal matters.

Though most employees got out of the region, dozens remain stuck there, the sources said.

Following the attack on Iran, airlines had mass cancellations. More than 11,000 Middle East flights have been cancelled since the U.S.-Israeli strikes over the weekend, according to aviation-data firm Cirium.

Google said the majority of impacted employees are not U.S.-based but in-region employees. It added that it has security and safety measures in place for its employees in the Middle East and has advised staff to follow guidance from local authorities.

“The situation in the Middle East is evolving rapidly and we are monitoring it carefully,” a Google spokesperson said in an emailed statement. “Our focus is on the safety and well-being of our employees in the region.”

Tel Aviv, a central Israeli city that has been hit with strikes, is also a major hub for Google. The search giant is in the process of expanding into a massive new headquarters in the ToHa2 Tower, expected to be one of its largest global sites.

Google did not immediately respond to questions about how Tel Aviv-based operations and employees have been affected by the Iran conflict.

Amazon, which has grown its presence in the Middle East region in recent years, is also altering its operations there as it responds to the widening conflict in the region.

The company is instructing all of its corporate employees in the Middle East to work remotely and “follow local government guidelines.”

“The safety of our employees and partners remains our top priority, and we are working closely with local teams and local authorities to ensure they are supported,” an Amazon spokesperson said in a statement.

Amazon operates corporate offices in the United Arab Emirates, Saudi Arabia, Jordan, Bahrain, Kuwait, Egypt, Turkey and Israel. It also operates warehouses and data centers throughout the region, and “quick commerce outlets” in the UAE to fulfill 15-minute deliveries.

Its sprawling data center footprint became a flashpoint in the conflict on Sunday. Two data centers in the UAE were “directly struck” by drones, while a facility in Bahrain was also damaged by a nearby drone strike.

The facilities sustained structural damage, power disruptions and some water damage after firefighters worked to put out sparks and fire. The sites remain offline, and some Amazon Web Services applications, such as its popular virtual server and database services, have continued to experience issues.

AWS encouraged customers to back up their data or consider migrating workloads to other regions.

“Even as we work to restore these facilities, the ongoing conflict in the region means that the broader operating environment in the Middle East remains unpredictable,” AWS said.

Social media company Snap told CNBC that it’s asking employees at its four Middle East offices to work remotely until further notice.

The company said staffers are being advised to follow advice from local authorities regarding shelter-in-place orders and departure recommendations.

— CNBC’s Jonathan Vanian contributed to this report

WATCH: Iran has many more drones than originally expected