BY EMMANUEL OGBONNA
Stocks tumbled sharply on Thursday while oil prices surged, as renewed uncertainty over the ongoing conflict involving Iran overshadowed earlier optimism on Wall Street that diplomatic efforts might bring the war to an end.
The S&P 500 fell 1.7%, marking its steepest single-day decline since January and putting the benchmark index on course for a fifth consecutive weekly loss. Such a streak, which predates the outbreak of hostilities, would represent the market’s longest run of weekly declines in nearly four years, underscoring the sustained pressure on equities.
The Dow Jones Industrial Average dropped 469 points, or roughly 1%, while the Nasdaq Composite sank 2.4%. The tech-heavy Nasdaq has now fallen more than 10% from its record high earlier this year, meeting the widely recognized threshold for a market “correction,” a term used by institutional investors to describe a significant pullback from peak valuations.
The downturn was not confined to U.S. markets. Equity indexes across Europe and Asia also declined, reflecting the global scope of investor anxiety. The week had begun with cautious optimism after Donald Trump suggested that discussions aimed at ending the conflict had been productive. However, those hopes faded quickly after Iranian officials denied direct negotiations and rejected a U.S.-backed ceasefire proposal transmitted through Pakistan.
As diplomatic efforts faltered, military developments intensified. Fighting continued on the ground, while additional U.S. forces moved closer to the region. At the same time, Iran tightened control over the Strait of Hormuz, a critical maritime chokepoint through which roughly one-fifth of the world’s oil supply passes.
Market participants grew increasingly concerned that disruptions in the strait could significantly constrain global energy flows, with some analysts likening Iran’s actions to the imposition of a de facto toll system for oil tankers navigating the narrow waterway.
Energy markets reacted swiftly. The price of Brent crude rose 4.8% to settle at $101.89 per barrel, a dramatic increase from roughly $70 prior to the conflict. U.S. benchmark crude climbed 4.6% to $94.48 per barrel. The sharp rise in oil prices has amplified fears of renewed inflationary pressure at a time when central banks are already grappling with economic uncertainty.
In a series of public remarks, Trump warned Iran to move quickly toward a resolution, cautioning that failure to do so could have severe consequences. Later in the day, his tone appeared to soften slightly, as he announced a delay in previously threatened military action against Iranian infrastructure, extending the timeline to April 6 to allow additional room for negotiations. Following those comments, oil prices retreated modestly from their highs, and movements in bond markets stabilized somewhat.
Still, financial conditions remain strained. The yield on the 10-year U.S. Treasury note climbed to as high as 4.43%, up from 4.33% a day earlier and significantly above the 3.97% level seen before the conflict began. Rising yields translate into higher borrowing costs across the economy, affecting everything from mortgage rates to corporate financing, and potentially slowing economic activity.
Economic data released Thursday added another layer of complexity. Initial claims for unemployment benefits ticked slightly higher, signaling some softening in the labor market, though levels remain historically low. Under typical circumstances, signs of labor market cooling might prompt the Federal Reserve to consider cutting interest rates to support growth. However, the surge in oil prices has heightened inflation concerns, leading traders to scale back expectations for rate cuts in 2026.
Technology stocks bore the brunt of the sell-off, exerting significant downward pressure on major indexes. Shares of Meta Platforms plunged 8%, while Alphabet declined 3.4%, reversing their relative stability from the previous session. The moves followed a landmark jury decision finding platforms such as Instagram and YouTube liable in a closely watched social media addiction case, a ruling that could pave the way for further legal challenges despite relatively modest immediate financial penalties.
Other major technology companies also fell. Nvidia dropped 4.2%, and Amazon slipped 2%. Apple stood out as a rare exception, edging up 0.1% amid the broader decline.
Outside the technology sector, Commercial Metals Company fell 4.7% after reporting quarterly profits that missed analysts’ expectations. The company cited adverse weather conditions affecting its North American operations, though it maintained that underlying demand trends remain favorable.
By the close of trading, the S&P 500 had fallen 114.74 points to 6,477.16, leaving it 7.2% below its recent all-time high. The Dow Jones Industrial Average ended at 45,960.11, down 469.38 points, while the Nasdaq Composite dropped 521.74 points to 21,408.08.
International markets mirrored the downturn. Germany’s DAX fell 1.5%, Hong Kong’s Hang Seng Index declined 1.9%, and South Korea’s Kospi dropped 3.2%. Japan’s Nikkei 225 recorded a comparatively modest loss of 0.3%, though it remained under pressure along with global peers.
Taken together, the day’s developments highlight how tightly interconnected geopolitical risk, energy markets, and financial conditions have become, with investors increasingly sensitive to every signal from both diplomatic channels and the battlefield.
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