Wall Street ended lower on Thursday, retreating from record levels as a selloff in software stocks and a sharp rise in oil prices weighed on investor sentiment amid lingering uncertainty over the Iran conflict.
The S&P 500 slipped 0.4% after earlier hitting a fresh intraday high, while the tech-heavy Nasdaq Composite declined 0.9%, also pulling back after touching a record during the session. The Dow Jones Industrial Average fell about 180 points, or 0.4%, reversing part of its recent gains.
Losses were led by software stocks following earnings-driven declines. Shares of IBM and ServiceNow dropped 8% and 17%, respectively. While IBM beat estimates on both revenue and profit, its decision to maintain full-year guidance disappointed investors. ServiceNow, meanwhile, flagged that the ongoing Middle East conflict impacted subscription revenue growth.
The weakness spread across the sector, dragging down names such as Microsoft, which fell 3%, Palantir Technologies, down 7%, and Oracle, which declined around 6%. The broader iShares Expanded Tech-Software Sector ETF (IGV) also dropped roughly 6%, underscoring the pressure on the segment.
Geopolitical tensions continued to cap gains, with the Iran conflict evolving into a naval standoff between the US and Iran despite a fragile ceasefire. Both sides have been vying for control over the Strait of Hormuz, with reports of commercial ships being seized this week heightening concerns over global trade routes.
In a sharp escalation, US President Donald Trump ordered the Navy to “shoot and kill any boat” laying mines in the strait, signalling a hardening stance. Reports also indicated that air defence systems in Tehran were activated to engage “hostile targets,” pointing to rising military activity in the region.
Also read: US futures slip after record rally as earnings swings, geopolitical jitters weigh
Oil prices surged later in the session, adding to market pressure. Brent crude settled above $105 per barrel after reports suggested that Iran’s parliament speaker had resigned from the US negotiating team, raising fears of a more hardline stance from the Revolutionary Guard. However, the development remains unconfirmed.
Trump had earlier indicated that the ceasefire extension was necessary as Iran’s government appeared “seriously fractured,” highlighting the fragile and uncertain path of diplomatic efforts.
While markets have shown signs of becoming less reactive to Iran-related headlines, the evolving conflict, coupled with elevated oil prices and sector-specific weakness, continues to keep investors cautious in the near term.
