Oil Shock Halts Record Run

Stocks lost ground Thursday after another sharp move higher in oil prices unsettled investors and interrupted the recent rally. The market briefly pushed to fresh intraday highs before reversing as concerns over a worsening U.S.-Iran standoff in the Strait of Hormuz lifted energy prices, pressured risk appetite, and weighed on rate-sensitive growth shares, even as the broader earnings backdrop remained relatively solid.

Key Headlines & Market Movers:

• Middle East tensions drive oil higher and stocks lower: Markets turned defensive as fears of a prolonged disruption in the Strait of Hormuz pushed crude sharply higher and revived concerns about energy-driven inflation pressure. That shift helped knock the S&P 500 and Nasdaq off record intraday levels, with investors reacting to increasingly aggressive U.S. and Iranian rhetoric and the growing risk that the conflict could last longer than markets had initially expected.

Software and megacap weakness offset semiconductor strength: Technology shares were mixed, but the weakest pockets of software and large-cap growth carried the most weight on the major indexes. ServiceNow and IBM fell after earnings failed to calm concerns around demand and AI-related disruption, Tesla also slipped, and Microsoft led declines among the largest tech names, while chip stocks remained a relative bright spot and Intel’s late guidance helped reinforce that divide.

Earnings remain supportive, but macro sensitivity is rising: Even with Thursday’s pullback, the broader tone this month has still been supported by resilient economic data and a strong earnings season, with a large majority of companies beating expectations. Still, the day’s trading showed that investors are becoming more sensitive to macro shocks, especially when they threaten to lift oil, keep Treasury yields firm, and complicate the outlook for inflation and consumer spending.

S&P 500 Sector Performance

Looking Ahead

The next test for markets is whether geopolitical risk remains contained or begins feeding more directly into inflation expectations, corporate guidance, and consumer behavior. Investors will be watching for any signs of de-escalation in the Middle East, as well as whether upcoming earnings and macro data can keep the focus on underlying economic resilience rather than on higher energy costs and renewed volatility.

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