U.S. stocks staged a dramatic intraday reversal on Thursday but ultimately finished the shortened holiday week on a mixed note, as investors wrestled with conflicting signals about the trajectory of the conflict in Iran. President Trump’s televised address the prior evening — in which he said the war could last another two to three weeks and offered no clear exit strategy — sent futures tumbling overnight and triggered a steep morning sell-off. By the close, however, a late-session recovery trimmed most of the damage.
The Dow Jones Industrial Average slipped 61.07 points, or 0.13%, to close at 46,504.67. The S&P 500 eked out a gain of 7.37 points, or 0.11%, finishing at 6,582.69, while the Nasdaq Composite edged up 38.23 points, or 0.18%, to settle at 21,879.18. All three indexes were sharply lower earlier in the session — the Dow fell more than 600 points at its worst, and the S&P 500 and Nasdaq were down as much as 1.5% and 2.2%, respectively — before a headline-driven bounce reversed the tide.
The catalyst for the recovery came from Iranian state media, which reported that Tehran is working with Oman on a protocol to monitor ship traffic through the Strait of Hormuz. The strait’s effective closure in recent weeks has choked off roughly one-fifth of global oil supply, and any sign of easing tensions there was enough to pull buyers back into equities. Still, with no firm resolution in sight, crude oil prices surged on the day. West Texas Intermediate jumped roughly 8.75% to around $108.88 per barrel, while Brent crude climbed about 5.3% to $106.52, keeping energy-related inflationary pressures front and center.
Notable Movers
Energy stocks were the clear winners as oil rallied. Exxon Mobil (NYSE:XOM) jumped nearly 3%, Devon Energy (DVN) and Occidental Petroleum (OXY) each gained more than 3%, ConocoPhillips (COP) rose over 3%, and Chevron (CVX) added more than 2%. The group benefited directly from the spike in crude prices and remains the market’s primary hedge against prolonged conflict in the Middle East.
On the losing side, consumer-facing and discretionary names bore the brunt of the risk-off mood that dominated most of the session. Estée Lauder (EL) was the worst performer in the S&P 500, falling 4.65%, followed by Tesla (TSLA) at negative 3.76% and Carnival Corp (CCL) at negative 3.61%. Rising fuel costs weigh particularly hard on cruise operators like Carnival, while Tesla continued to slide after reporting soft first-quarter delivery numbers earlier in the week.
Looking Ahead
Markets will be closed on Friday for the Good Friday holiday, giving investors a long weekend to digest the latest developments in Iran and the broader oil market. When trading resumes on Monday, attention will turn to any progress on the Oman-brokered shipping protocol, which could provide meaningful relief to energy prices if it moves forward. Bank of America economists recently warned of “mild stagflation” risks stemming from the conflict, lowering their U.S. growth forecast to 2.3% and projecting headline inflation at 3.6% for the year. With crude still elevated above $100 a barrel, the interplay between geopolitical risk and economic fundamentals will remain the dominant theme heading into next week.