Wall Street stepped back from its latest record highs on Thursday, with the S&P 500 and Nasdaq retreating in late-morning trading as oil prices remained elevated above $100 a barrel and corporate earnings offered little clarity. The Dow Jones Industrial Average fell 99.59 points, or 0.20%, by 11:45 a.m. ET, while the Nasdaq slipped 0.21% and the S&P 500 edged down 0.03%.
The pullback comes after the S&P 500 and Nasdaq notched all-time closing highs on Wednesday, snapping back sharply from lows hit in March. The S&P 500 is now up about 11% from that bottom, while the Nasdaq has surged roughly 18%. However, Baird strategist Ross Mayfield cautioned that the Iran crisis remains a threat, telling Reuters investors need to see more hard evidence that the danger is fading.
Oil prices remained a key concern, with Brent crude trading at $103.53 a barrel as of 11:35 a.m. CDT. John Kilduff of Again Capital described the barrage of U.S.-Iran news as “headline roulette,” as the market tried to assess the odds of shipping returning to normal in the Strait of Hormuz. The ongoing disruptions have left inflation concerns lingering.
The latest U.S. economic data painted a mixed picture. Weekly jobless claims rose to 214,000, while S&P Global’s flash Composite PMI climbed to 52.0 from 50.3, remaining in expansion territory. However, businesses reported charging the most for goods and services since July 2022. S&P Global’s Chris Williamson noted the data signaled economic growth stuck below a 1% annualized pace.
Focus shifted back to the Federal Reserve, with Treasury yields showing little movement. The 10-year note yielded 4.288%, while the 2-year stood at 3.794%. Traders continue to bet the Fed will hold rates steady this year, as energy prices tied to the conflict keep inflation stubborn.
Earnings season intensified the market’s division. IBM tumbled roughly 10% after sluggish software numbers stoked concerns that new AI offerings are undercutting legacy business, dragging ServiceNow and Microsoft lower. Tesla also slid after hiking its 2024 capital spending forecast above $25 billion. Lockheed Martin edged lower following a drop in quarterly profit.
Semiconductors provided a bright spot. Texas Instruments surged 18.4% after projecting second-quarter sales and earnings above Wall Street expectations, lifting chip stocks including NXP Semiconductors and pushing the sector closer to fresh highs. UBS strategist Kiran Ganesh noted that tech investors are now facing a “bigger range of outcomes.”
Pressure is spreading beyond tech. American Airlines slashed its 2026 forecast, citing higher fuel prices, while Honeywell sees second-quarter revenue trailing expectations due to conflict disruptions. Both announcements stoked worries that first-quarter numbers may be understating the full impact of rising energy costs and snarled supply chains.
Despite the headwinds, bulls remain active. First-quarter earnings growth is running near 14%, according to LSEG data. Sameer Samana of Wells Fargo Investment Institute cautioned against getting too caught up in headlines, arguing both the economy and earnings are solid. State Street’s Michael Arone echoed that, saying sitting on the sidelines too long could mean missing the rally.
The balance could easily tip. With oil above $100, more firms may echo the caution seen from American and Honeywell. If traffic through the Strait of Hormuz stays tight, the market’s historic rally could quickly unravel. UBS’s Ganesh pointed out that today’s earnings don’t yet reflect the true impact of the energy shock. Investors now await Intel’s results later Thursday for another test of corporate resilience.
