U.S. stocks pulled back on Thursday after a strong run to all-time highs earlier in the week. The retreat came as oil prices bounced off session lows and investors grew cautious awaiting Iran’s response to a U.S. peace proposal aimed at reopening the Strait of Hormuz. After several sessions of gains fueled by blockbuster tech earnings and optimism around a potential Middle East deal, markets paused to digest the rally.
What Moved Markets
The Dow Jones Industrial Average fell 285.61 points, or 0.57%, to close at 49,624.98 after briefly crossing the 50,000 milestone intraday for the first time. The S&P 500 (SPI:SP500) slipped 28.02 points, or 0.38%, to settle at 7,337.10, a day after setting a fresh record close. The Nasdaq Composite edged lower by roughly 0.1%, giving back a modest portion of its recent surge to all-time highs.
The session began on a hopeful note, with all three major averages trading higher in early action as West Texas Intermediate crude fell meaningfully below $95 per barrel on expectations that an Iran deal could restore tanker flows. But oil reversed course during the afternoon, with WTI settling at $94.81, down just 0.28% on the day. That bounce reignited inflation concerns and sapped momentum from equities. Semiconductor stocks, which had powered much of the recent rally, also took a breather after a torrid stretch of gains tied to AI spending.
Notable Movers
Datadog (DDOG) surged more than 30% after the cloud monitoring company raised its full-year outlook and beat estimates on both revenue and earnings. It was the stock’s largest single-day jump in six years.
McDonald’s (MCD) rose 3.3% after reporting first-quarter earnings of $2.83 per share on revenue of $6.52 billion, both topping Wall Street expectations. CEO Chris Kempczinski noted resilient U.S. same-store traffic despite what he called a challenging consumer environment.
Fortinet (FTNT) gained roughly 15% following a strong quarterly report that pushed shares to all-time highs, reflecting continued demand for cybersecurity solutions.
Arista Networks (ANET) continued to slide, losing additional ground after dropping nearly 14% earlier in the week. Despite beating estimates with $2.71 billion in revenue — up 35% year over year — the company’s cautious guidance and comments about persistent supply constraints spooked investors.
Arm Holdings (ARM) fell 7.3% after the chip designer said it has not yet secured enough supply capacity to meet an additional $1 billion in demand, even as it topped earnings expectations.
Looking Ahead
All eyes remain on the Middle East. Iran’s response to the U.S. peace memorandum could determine whether crude oil continues its decline or rebounds further, with significant implications for inflation expectations and Federal Reserve policy. On the earnings front, the first-quarter reporting season is winding down, but the results so far have reinforced a key theme: investors are no longer rewarding AI spending commitments alone and are increasingly demanding evidence of returns. Friday’s data calendar is light, which means geopolitical headlines are likely to drive price action heading into the weekend.