U.S. equities closed lower on Thursday, snapping a streak of record highs as a selloff in semiconductor stocks and renewed oil price volatility weighed on sentiment. The S&P 500 fell 0.38% to 7,337.11, while the Nasdaq Composite edged down 0.13% to 25,806.20. The Dow Jones Industrial Average lost 0.63%, ending at 49,596.97.
The pullback was led by a sharp decline in chipmakers. The PHLX Semiconductor Index tumbled 2.7%, with Intel Corporation and Advanced Micro Devices each shedding roughly 3%. Shares of Arm Holdings also slumped. The retreat followed a strong rally on Wednesday after AMD's upbeat revenue forecast had lifted the sector and propelled the S&P 500 and Nasdaq to new closing records. Investors quickly booked profits as concerns over artificial intelligence supply chain bottlenecks resurfaced.
Despite the day's losses, the broader earnings picture remains robust. With nearly 70% of first-quarter reports in, S&P 500 profits are tracking a 28.2% year-over-year gain, the largest since the fourth quarter of 2021, according to LSEG data cited by Reuters. "Earnings have driven the move higher," said Chris Fasciano, chief market strategist at Commonwealth Financial Network. Deutsche Bank's Binky Chadha described the profit surge as the "strongest in two decades."
Oil markets added to the volatility. Brent crude settled at $100.06 per barrel, down 1.2%, while U.S. West Texas Intermediate crude closed at $94.81. Both benchmarks had fallen as much as $5 earlier in the session amid speculation about a potential short-term agreement between Washington and Tehran. The swings in energy prices rippled into equities, as higher oil costs tend to fuel inflation and compress corporate margins. Daniel Skelly, head of Morgan Stanley's Wealth Management Market Research & Strategy Team, noted that oil's "longer-term impact on inflation is still an open question." Meanwhile, the 10-year Treasury yield rose to 4.382%, with investors looking ahead to Friday's U.S. nonfarm payrolls report.
In corporate news, Datadog Inc. was a standout gainer. The cloud-monitoring company raised its 2026 revenue outlook to a range of $4.30 billion to $4.34 billion, up from a prior estimate of $4.06 billion to $4.10 billion. First-quarter revenue came in at $1.01 billion, a 32% increase. CEO Olivier Pomel cited robust demand for "cloud-based, AI-enabled solutions." Shares rallied in regular trading.
Consumer demand showed signs of strain. Whirlpool Corporation shares plunged to their lowest level in more than 14 years after the appliance maker slashed its 2026 adjusted earnings forecast to $3 to $3.50 per share, down from roughly $7, and suspended its dividend. "Consumers are holding back," CEO Marc Bitzer said on the earnings call, adding that people are choosing to repair appliances rather than buy new ones.
After the bell, Airbnb Inc. warned of softer growth, citing ongoing travel disruptions from the Middle East conflict. The company said second-quarter nights booked would decelerate compared to the first quarter, though it raised its 2026 revenue outlook to low- to mid-teens growth from at least low double digits. Shares slipped 1.57% in after-hours trading.
Other tech earnings after the close were mixed. CoreWeave topped revenue forecasts as AI computing demand remained strong, but shares barely moved as operating costs more than doubled. Cloudflare Inc. tumbled over 13% after issuing a disappointing revenue outlook and announcing plans to lay off roughly 20% of its workforce. Coinbase Global Inc. slipped around 4% after posting its second consecutive quarterly loss.
In a late-breaking development, the U.S. Trade Court struck down President Donald Trump's most recent 10% global tariffs, ruling that the sweeping duties are not authorized under a 1970s-era trade law. The decision came after the cash market closed, leaving investors to assess the impact on import-heavy stocks when trading resumes.
Looking ahead, SEB Research's Ole Hvalbye suggested that Brent crude could quickly settle in the $80 to $90 range if a U.S.-Iran deal materializes, but a failure in talks or renewed strikes could push prices above $120. A strong jobs report on Friday would give the Federal Reserve more reason to maintain steady interest rates. For now, the equity rally continues to draw support from earnings rather than expectations of looser monetary policy.
