A nine-day winning streak for the S&P 500 came to an end this week, with early Thursday trading bringing mixed results across U.S. markets and a sharp pullback in global crude oil prices, following a fragile new ceasefire deal between Israel and Lebanon and escalating geopolitical tension between the U.S. and Iran.
Hours before U.S. markets opened Thursday, S&P 500 futures dropped 0.4%, while the Nasdaq 100 futures slid 1.2% pulled down by weak tech sector performance. In a contrast, Dow Jones Industrial Average futures climbed 0.7%, pointing to a split opening for large-cap stocks.
Two major U.S. corporations dropped sharply in premarket trading despite beating quarterly earnings forecasts, as investors reacted to disappointing full-year outlook updates. Semiconductor and enterprise software leader Broadcom tumbled more than 15% overnight. The stock had already surged 38% year-to-date and tripled in value over the past two years, driven by booming demand for AI-related chips. Even with stronger-than-expected top- and bottom-line results, the company declined to upgrade its full-year guidance, leaving investors unimpressed. Apparel and apparel brand conglomerate PVH Corp., formerly Phillips-Van Heusen, slid an even steeper 23% after cutting its full-year outlook. The company flagged ongoing drag from global tariffs and the ongoing Iran conflict as key headwinds for its business, even as it exceeded first-quarter sales and profit estimates.
Geopolitical developments drove sharp movement in energy markets Thursday. Crude prices pulled back $2-$3 per barrel a day after spiking on escalating retaliatory attacks between the U.S. and Iran that roiled global energy supplies. The drop followed a breakthrough ceasefire announcement: Israel and Lebanon confirmed they had agreed to extend their fragile truce and establish new pilot security zones in southern Lebanon, from which Hezbollah militants will be excluded. As of mid-morning trading, Brent crude fell $2.42 to settle at $95.39 per barrel, and U.S. benchmark West Texas Intermediate crude dropped $2.30 to $93.72 per barrel. Both benchmarks remain below the peaks hit when the Iran conflict first escalated, and Wall Street analysts hold cautious optimism that the U.S. and Iran will reach an agreement to reopen the Strait of Hormuz, a critical chokepoint for global oil shipping, which would boost global crude supplies and ease price pressures.
In fixed income markets, Treasury yields steadied Thursday a day after climbing to levels that pressured equity valuations. The 10-year U.S. Treasury yield ticked down slightly to 4.47%, from 4.49% on Wednesday and 3.97% before the outbreak of the Iran conflict. Sustained high yields around the world have created broad headwinds for the global economy, pushing down valuations for equities and other risk assets while raising borrowing costs across sectors. The average long-term U.S. mortgage rate has already hit its highest level in nine months, and higher borrowing costs could slow companies’ plans to invest in the AI data center infrastructure that has powered much of U.S. economic growth in recent quarters. Smaller businesses are disproportionately vulnerable to higher loan costs, as many rely on continuous borrowing to fund expansion.
Despite these headwinds, major U.S. stock indexes remain near all-time records, even amid persistent inflation pressure and geopolitical uncertainty. Global markets were mixed across regions Thursday: in midday European trading, Germany’s DAX gained 0.6% and France’s CAC 40 climbed 1%, while the UK’s FTSE 100 dipped 0.5%. Across Asian markets, all major indexes closed in negative territory, led by sharp drops in technology and growth stocks. Japan’s Nikkei 225 fell 1.4% to close at 67,470.69, with tech and energy conglomerate SoftBank Group plummeting 11.2% and chemical leader Shin-Etsu Chemical dropping 3.8%. Hong Kong’s Hang Seng Index lost 1.4% to end at 25,274.98, and China’s Shanghai Composite fell 0.8% to 4,057.78. South Korea’s Kospi dropped 1.8% to 8,639.41, and Australia’s S&P/ASX 200 closed down 1.1% at 8,686.10.
In a separate political development that could impact future geopolitical and market outcomes, the U.S. House of Representatives passed a war powers resolution for the first time on Wednesday that would halt U.S. military action against Iran. The vote defied President Donald Trump, with a small group of Republican lawmakers joining Democrats to back the measure, which targets a three-month conflict that has reshaped global and domestic U.S. politics and disrupted global commodity markets.