Stocks finish lower, but markets recover from deeper declines
US stocks ended lower on Thursday, though the session closed far above its intraday lows as investors reassessed the latest developments in the war involving Iran and the implications for energy markets. Early trading reflected a market still rattled by supply risks and geopolitical uncertainty, but sentiment improved somewhat after comments from Israeli Prime Minister Benjamin Netanyahu suggested that the conflict might be moving closer to a turning point.
The S&P 500 fell 0.27 percent to 6,606.49, while the Nasdaq Composite lost 0.28 percent and finished at 22,090.69. The Dow Jones Industrial Average dropped 203.72 points, or 0.44 percent, to 46,021.43. Those closing moves masked a much weaker start. At its session low, the Dow had been down nearly 500 points, while the S&P 500 and Nasdaq were off roughly 1 percent and 1.4 percent respectively.
The recovery from those lows did not erase the broader message. All three major indexes still posted a second consecutive day of losses, underlining how fragile investor confidence remains as the war drags toward a fourth week and as energy markets continue to shape expectations for inflation, growth and monetary policy.
Oil remains the central force behind market mood
The key variable for markets remained crude. US West Texas Intermediate futures settled down about 0.2 percent at $96.14 a barrel, while Brent crude rose 1.2 percent to $108.65, its highest close since July 2022. Even with that divergence, the important signal was that oil no longer appeared to be spiraling upward in late trading, helping equities recover some lost ground.
That shift followed comments from Netanyahu, who said Israel was helping the United States with intelligence and other means to reopen the Strait of Hormuz. He also argued that Iran had lost the ability to enrich uranium and produce ballistic missiles, adding that the war might end sooner than many expect. Those remarks appeared to encourage some traders to trim the most aggressive energy-risk positions of the day.
Earlier in the session, oil had surged after Iran struck a key liquefied natural gas export facility in Qatar in retaliation for Israel’s attack on Iran’s South Pars gas field. President Donald Trump then warned that any further attacks on facilities in Qatar would trigger a massive US response against the entire South Pars field. The exchange reinforced the sense that energy infrastructure remains at the center of the conflict and that commodity markets will continue to react violently to each escalation.
Investors are adjusting to the idea of a longer disruption
The larger shift in market thinking is that investors no longer seem convinced the conflict will end quickly. In the first phase of the war, many traders assumed the closure of the Strait of Hormuz could not last and that oil would soon retreat once diplomacy or military developments restored traffic. As the conflict approaches its fourth week, that confidence has started to erode.
The current concern is no longer just whether the strait reopens, but what commodity markets will look like even after hostilities eventually subside. If energy prices settle at structurally higher levels than before the war, that would have lasting implications for inflation, input costs and consumer spending. For markets, the danger lies less in one day of oil volatility than in the possibility that a new, higher baseline for crude becomes embedded in the global economy.
That is why Thursday’s partial rebound in equities should not be mistaken for a full return of confidence. Investors appear to be reducing immediate panic rather than regaining conviction. The war still lacks a clear diplomatic exit, and market participants are increasingly aware that even a military advantage for the United States and Israel may not by itself solve the problem of reopening Hormuz in a durable way.
Tech and credit worries add to the pressure
The market is also contending with risks that predate the war. Concerns around parts of the technology sector and strains in private credit have not disappeared simply because energy has taken center stage. Instead, the conflict may be intensifying those vulnerabilities by making investors more selective and less willing to pay for growth stories that depend on stable funding conditions and benign inflation.
That was visible in individual stock action on Thursday. Micron Technology fell 3.8 percent despite its recent strong results, with some analysts attributing the move largely to profit-taking after a powerful rally linked to the memory supply shortage and the AI spending boom. The decline was a reminder that even high-performing technology names are no longer insulated from a market environment dominated by risk reduction and rotation.
The session therefore captured the current mood on Wall Street with unusual clarity. Stocks are no longer selling off in a straight line, but they are not finding a convincing floor either. Oil remains the immediate driver, geopolitics remains the source of uncertainty and investors are beginning to accept that the end of the war, whenever it comes, may not restore the market conditions that existed before it began.
