U.S. stocks retreated on Thursday as a sharp selloff in software shares and surging crude oil prices gave investors reason to book profits after the previous session’s rally to all-time highs. The S&P 500 had just notched a fresh record on Wednesday following President Trump’s extension of the ceasefire with Iran, but optimism faded quickly as disappointing earnings reactions in the software sector and renewed concerns about the conflict’s impact on energy markets took center stage.
Index Closing Levels
The S&P 500 (SPI:SP500) fell 29.50 points, or 0.41%, to close at 7,108.40. The Nasdaq Composite dropped 219.06 points, or 0.89%, finishing at 24,438.50. The Dow Jones Industrial Average shed 179.71 points, or 0.36%, ending the session at 49,310.32. All three indexes gave back a portion of Wednesday’s gains, which had been fueled by ceasefire optimism and a batch of strong earnings reports. Oil added to the selling pressure, with Brent crude climbing above $105 per barrel and WTI jumping nearly 4% to around $96.50 as traders reassessed the durability of the ceasefire and the broader supply outlook in the Middle East.
Notable Movers
ServiceNow (NOW) plunged nearly 18% after its quarterly results failed to excite investors despite roughly matching consensus estimates. The cloud workflow company flagged deal delays in the Middle East and its CFO acknowledged taking “incremental conservatism” on guidance due to geopolitical uncertainty. The drop dragged the broader software sector down roughly 5% on the day.
IBM (IBM) fell about 9% even after beating Wall Street expectations on both earnings and revenue. Management’s decision to merely reiterate its 2026 outlook, rather than raise it, left investors wanting more. Together, IBM and ServiceNow reignited fears that AI disruption could pressure legacy software business models faster than expected.
Texas Instruments (TXN) surged 19% to a record high after blowing past first-quarter estimates and issuing a strong current-quarter forecast. Revenue grew 19% year over year to $4.83 billion, powered by booming demand for analog chips used in AI data centers. The result lifted sentiment across the semiconductor space and underscored a widening divide between chip stocks and software names.
Penn Entertainment (PENN) jumped more than 15% after crushing first-quarter EBITDAR expectations at $471.4 million versus the $413.4 million consensus, on revenue of $1.78 billion. American Airlines (AAL) rose over 4% on a first-quarter beat, though the carrier trimmed its full-year earnings outlook citing higher jet fuel costs tied to the oil spike.
Meta Platforms (META) was in focus after announcing plans to cut 10% of its workforce, roughly 8,000 employees, effective May 20. CEO Mark Zuckerberg framed the move as part of a broader efficiency push as the company redirects resources toward AI development, calling 2026 “the year that AI starts to dramatically change the way that we work.”
Looking Ahead
Earnings season accelerates on Friday with reports due from American Express, Honeywell, Intel, and Newmont among others. Investors will be watching Intel’s results closely for further signals on whether the AI-driven chip boom is broadening beyond the usual suspects. The oil market will also remain a key variable; any shift in the Iran ceasefire narrative could quickly reprice energy stocks and weigh on consumer-facing sectors sensitive to fuel costs. With the S&P 500 still within striking distance of its all-time high, the tug of war between strong corporate profits and macro uncertainty looks set to continue into next week.