U.S. stocks took a steep dive on Thursday as investors struggled to sustain the previous session’s rebound, with rising conflict in the Middle East rattling markets and pushing energy prices higher. The Dow Jones Industrial Average fell more than 950 points, or about 1.9%, while the S&P 500 dropped roughly 1%. The Nasdaq Composite also slipped, losing around 0.7% as technology shares faced renewed pressure.
Markets remained on edge as fighting between a U.S.-Israel coalition and Iran entered its sixth day, raising fears of broader regional disruption. Investors are increasingly concerned that rising oil prices could reignite inflation pressures and complicate the Federal Reserve’s rate outlook, triggering a wave of risk-off sentiment across equities.
Market Movers:
- The Trade Desk (TTD) +29% – Shares surged after reports that OpenAI has held early talks with the company about helping sell advertising as part of its push into ads on ChatGPT. The discussions come as OpenAI reportedly tests ads for logged-in users in the U.S. and explores partnerships with brands, media agencies, and ad-tech firms to expand monetization.
- Okta (OKTA) +10% – Shares climbed after the identity management firm issued stronger-than-expected fiscal 2027 subscription revenue guidance and received bullish analyst commentary. Wall Street pointed to growing traction in AI-driven identity tools across the Okta and Auth0 platforms, which could accelerate subscription growth in the coming years.
- Veeva Systems (VEEV) +7% – The cloud software provider for the life sciences industry gained after reporting fourth-quarter results that beat expectations and issuing upbeat long-term guidance. Veeva forecast fiscal 2027 revenue between $3.585 billion and $3.6 billion, topping analyst estimates, while projected earnings also came in ahead of consensus.
- Broadcom (AVGO) +4% – Shares moved higher after the semiconductor giant posted quarterly results and guidance that exceeded Wall Street expectations. The company highlighted explosive demand for AI chips, with first-quarter AI revenue soaring 106% year over year to $8.4 billion.
- Cracker Barrel Old Country Store (CBRL) +2% – Shares advanced after the restaurant chain posted stronger-than-expected quarterly results and refined its fiscal 2026 outlook. Management also narrowed its EBITDA forecast and trimmed planned capital spending, signaling improved cost discipline amid moderating commodity inflation.
- Ciena (CIEN) -14% – Shares tumbled despite reporting strong quarterly results and raising its full-year revenue outlook. Investors appeared to take profits after a sharp run-up, even as the company highlighted a record backlog and strong order demand extending into 2027.
- Victoria’s Secret & Co. (VSCO) -14% – The retailer dropped despite beating earnings expectations, as investors focused on declines in unadjusted income and a strategic review of its DailyLook business. The company also recorded an impairment charge tied to its Adore Me assets, which weighed on sentiment.
- American Eagle Outfitters (AEO) -12% – Shares fell after the apparel retailer issued a weaker-than-expected full-year outlook despite posting a quarterly earnings beat. Tariff-related margin pressures and a 10% rise in year-end inventory added to concerns about profitability.
- Rigetti Computing (RGTI) -6% – The quantum computing firm declined after reporting fourth-quarter results that missed Wall Street estimates. Management said it remains focused on scaling its quantum systems and expects stronger revenue growth in the coming quarter tied to previously announced system orders.
Oil Prices Surge as Iran Conflict Intensifies
Energy markets remained at the center of investor concerns as the conflict in the Middle East continued to escalate. West Texas Intermediate crude surged past $80 per barrel for the first time since early 2025, while Brent crude climbed above $85 as supply fears mounted. The Strait of Hormuz, a key global oil shipping chokepoint, has seen significant disruption as the conflict expands across the region. Roughly 20 million barrels of oil normally pass through the strait each day, and any prolonged shutdown could send energy prices even higher, amplifying inflation pressures worldwide.
Rising Yields Add to Market Pressure
The surge in oil prices has also pushed bond yields higher, with the U.S. 10-year Treasury yield jumping sharply this week. Analysts note that much of the move reflects rising real yields rather than purely inflation expectations, suggesting investors are demanding higher compensation to hold long-term government debt. Higher yields can weigh on equities by raising borrowing costs and reducing the relative attractiveness of risk assets. They also complicate the Federal Reserve’s path forward, particularly if inflation expectations begin to move higher alongside energy prices.
Software Stocks Show Resilience
Despite the broader sell-off, some parts of the technology sector showed relative strength. Software stocks have rebounded in recent days as concerns about AI disruption in the industry have cooled. Several major names posted gains earlier in the week, with investors increasingly viewing enterprise software companies as beneficiaries of expanding AI integration rather than victims of it. The shift in sentiment has helped stabilize a sector that faced heavy selling pressure throughout February.
Looking Ahead
Investors will turn their attention to Friday’s highly anticipated monthly jobs report, which could provide fresh insight into the strength of the labor market and the trajectory of interest rates. A stronger-than-expected report could reinforce expectations that the Federal Reserve will keep rates higher for longer. At the same time, geopolitical developments remain the biggest wildcard for markets. If tensions in the Middle East continue to escalate and oil prices remain elevated, volatility could persist as investors weigh the risk of rising inflation against slowing global growth.