Stocks plummeted Thursday, and oil prices surged as doubts resurfaced regarding a potential de-escalation in tensions with Iran, reversing earlier optimism. The S&P 500 experienced its worst day since January, declining 1.7 percent, and is now on track for a fifth consecutive weekly loss – a losing streak not seen in nearly four years.
The Dow Jones Industrial Average closed down 469 points, a 1 percent drop, while the Nasdaq Composite fell 2.4 percent, pushing it more than 10 percent below its year-to-date high. This decline officially marks a “correction” for the Nasdaq, a term used by investors to describe a 10 percent or greater drop from a recent peak.
Global markets mirrored the downturn, with stock indices falling across Asia and Europe. Germany’s DAX closed 1.5 percent lower, Hong Kong’s Hang Seng Index dropped 1.9 percent, and South Korea’s KOSPI saw a 3.2 percent decline. Japan’s Nikkei 225 experienced a more moderate loss of 0.3 percent.
The market volatility follows a week of fluctuating sentiment, initially buoyed by President Donald Trump’s statements on Monday regarding “productive talks” aimed at ending the conflict. Yet, Iran swiftly denied any direct negotiations were underway and subsequently dismissed a U.S.-proposed ceasefire delivered through Pakistan, according to reports from Global News.
Fighting continued on the ground Thursday, and the U.S. Military continued to bolster its presence in the region, with thousands of additional troops nearing deployment. The U.S. Central Command has not specified the exact number of troops being deployed or their precise locations, citing operational security.
Adding to the concerns, Iran has tightened its control over the strategically vital Strait of Hormuz, a narrow waterway through which approximately 20 percent of the world’s oil supply passes. Analysts suggest Iran may be establishing a system of levies on tankers transiting the strait, effectively creating a toll for passage. This action contributed to a 4.8 percent increase in the price of Brent crude oil, settling at $101.89 a barrel – a significant jump from around $70 before the recent escalation. Benchmark U.S. Crude rose 4.6 percent to $94.48 per barrel.
President Trump, via his social media network Thursday morning, urged Iranian negotiators to take the situation seriously, warning that failure to do so would have “NO TURNING BACK, and it won’t be pretty!” He later announced a delay in his previously threatened “obliteration” of Iranian power plants, postponing the action until April 6 to allow for continued dialogue.
Following Trump’s softened rhetoric, oil prices eased slightly, falling back toward $100 per barrel, and Treasury yields pared some of their earlier gains. However, the bond market remains sensitive to the geopolitical risks, with the yield on the 10-year Treasury reaching as high as 4.43 percent Thursday, up from 4.33 percent the previous day and 3.97 percent before the conflict began. This increase in Treasury yields is already contributing to higher borrowing costs for mortgages and other loans.
Economic data released Thursday morning showed a slight increase in the number of Americans filing for unemployment benefits last week, although the figure remains relatively low by historical standards. This data adds to the complexity of the economic outlook, as a slowing job market could prompt the Federal Reserve to consider interest rate cuts, but concerns about rising inflation, exacerbated by higher oil prices, may limit the Fed’s options.
Within the stock market, technology stocks bore the brunt of the selling pressure. Meta Platforms experienced an 8 percent decline, and Alphabet fell 3.4 percent, following a jury’s decision finding both companies liable in a landmark social media addiction trial. Nvidia similarly saw a significant drop, falling 4.2 percent, while Amazon declined by 2 percent. Apple bucked the trend, rising slightly by 0.1 percent.
Commercial Metals Company also reported weaker-than-expected profits for the latest quarter, contributing to a 4.7 percent decline in its stock price. CEO Peter Matt attributed the lower earnings to adverse weather conditions in North America, but expressed optimism about underlying market conditions.
The S&P 500 closed at 6,477.16, down 114.74 points. The Dow Jones Industrial Average finished at 45,960.11, a decrease of 469.38 points, and the Nasdaq Composite ended the day at 21,408.08, down 521.74 points.
As of Thursday’s close, no further official statements regarding potential negotiations have been released by the U.S. State Department or Iranian diplomatic channels.
