This is a difficult situation and a lot of what you do depends on what you're willing to put up with. I'm going to assume the yelling and fighting is really negatively affecting your life in an unacceptable manner. It would mine.
My personal belief is that you should never give your child anything because they frighten you into it or will make you miserable if you don't. He won't improve his grades or keep a job by demands or shouting at his teachers or boss, ever. It's not an essential life skill, whereas learning self-control is.
But you love him, and denying him at this tender age may feel like an unacceptable alternative. It's not. To cave in to bullying will just lead to more bullying. It has to stop. What you must decide is how you can best help him get and keep his life on the right track from here on in. This is something that will help the both of you. I would strongly recommend a contract in this situation.
Plan ahead. Before you sit down with him, decide on whether or not you want to support him if he is neither doing well in school nor working, if so, how much money (besides food and board) are you willing to give him? Are you willing to
bribe reward him to help him succeed? This is an option, as unsavory as some may find it. If you are, decide what is an acceptable and appropriate bribe reward. This can be one of the items the two of you negotiate. It can be paying for music school, or a used car, a living allotment or whatever you both feel is reasonable (this is why you negotiate.)
Next time you are both in a fairly peaceful mood, inform him you need to have a "family meeting". The purpose of this meeting is to negotiate a contract that he must agree to uphold if he is to live in your house.1 Set a time (right then or in a few days) for the meeting.
Then negotiate the terms of the agreement. This is a contract; it all needs to be written down. Include a requirement that he never raise his voice to you, or raise a hand, again under any circumstances without consequences. (I hope it goes without saying that you will honor that code of behavior as well.) It needs to include school attendance and passing grades or part-(or full)-time work, or a combination, or whatever is important to you and think will help him. It can include anything the two of you have concerns about. But you need to negotiate this peacefully and reasonably. Ask him if he has any requests and consider them if he does.2
Next, set consequences. These are only minimally negotiable. For example, if he raises his voice (you will just be a calm observer now, because you'll have the contract), he needs to leave the house (allow a set few minutes of packing) until the next morning. He won't die if he has to sleep in your car or find a friend willing to put him up at the last minute. Also if he doesn't honor your agreement/contract, e.g., if he refuses to leave and argues, the ante needs to go up - two days away from home, a week away from home; where he goes is not your problem. Still no cooperation? Then you will call the police. (You need to be willing to do this or whatever the consequence is.)3
Once all the new house rules are negotiated, type it up, print 4 copies, and both sign all copies. One is yours, one is his, one goes on the refrigerator or other open, commonly used space.4 Then both of you know what is expected of each other.
Please read the links below. They all have value, good ideas and advice. Remember, you don't have to negotiate everything under the sun; just the most important and helpful things.
The last link is the most serious, and I would definitely consider it's advice. It's from an organization that deals with troubled teens, and the contract is drawn up before the teen is allowed to come home from a therapeutic boarding school/treatment facility again. It has some great advice. You need to be strong for your son and yourself.
Good luck. Whatever you choose, if you have success, please consider adding to this post (you can edit new information into your question) and telling us what worked well and what you found unhelpful.
1. If he refuses, tell him in that case, you will give him a list of your own demands without his input. Then type it up and give it to him, and date it. If he fails to meet any of the demands, put your consequences into play.
2. You might want a second adult there - an uncle, or other adult male - to act as a neutral intermediary if needed. There are also therapists and social workers that do this kind of mediation.
3. If things start to get heated, you might want to take a five-minute break, but get through it.
4. Give the third copy to the intermediary or someone else outside the home. Treat this like a binding, legal agreement.
LIFE WITH A TEENAGER: THE ART OF NEGOTIATION
Contracts of Trust Between Parents and Teenagers
How to Write a Home Rules Contract
The Coming Home Contract