S&P 500 and Nasdaq Slip as Rising Yields and Oil Prices Weigh on Market Sentiment
U.S. stocks moved lower on Thursday as higher Treasury yields and surging oil prices pressured investor sentiment. At the same time, chip giant Nvidia delivered strong quarterly earnings, although concerns around valuation limited enthusiasm and weighed on its shares.
During midday trading:
- S&P 500 fell 0.3% to 7,407.47
- NASDAQ Composite dropped 0.5% to 26,139.54
- Dow Jones Industrial Average declined 0.1% to 49,953.50
Iran’s Nuclear Position and Trump Comments Renew Geopolitical Concerns
Market uncertainty increased after reports suggested Iran’s Supreme Leader Ayatollah Mojtaba Khamenei directed that the country’s highly enriched uranium should remain inside Iran.
The reported position may complicate negotiations with the United States, particularly as President Donald Trump has repeatedly emphasized that Iran cannot obtain nuclear weapons capability.
Additional reports stated Trump had reassured Israeli allies that Iran’s uranium stockpile would leave the country under any peace agreement, although Iranian officials reportedly denied those claims.
Trump Signals Diplomacy but Warns Military Escalation Remains Possible
President Trump said the United States was approaching the “final stages” of a potential peace agreement, while also warning that stronger measures could follow if negotiations fail.
Earlier reports indicated Trump had delayed a planned military operation against Iran following requests from Gulf leaders but stated the action had been close to implementation.
Iran responded by saying it continues reviewing Washington’s latest proposals while remaining prepared to retaliate against future attacks.
Strait of Hormuz Disruptions Push Oil Prices Higher
Iran also expanded oversight around the Strait of Hormuz, creating a new authority responsible for regulating vessel traffic through the critical shipping route.
The waterway carries approximately 20% of global oil and gas supplies, making disruptions a major risk for energy markets.
Against this backdrop:
- Brent crude oil rose 2.5% to $107.59 per barrel
Higher oil prices have increased fears of renewed inflation pressure worldwide.
Treasury Yields Rise as Investors Reassess Inflation Risks
Another source of pressure on stocks came from a renewed sell-off in government bonds.
Investors increasingly worry that central banks may need to raise interest rates if energy-driven inflation persists.
Key bond movements included:
- 10-year U.S. Treasury yield: up to 4.615%
- 30-year Treasury yield: increased to 5.133%
Minutes from the Federal Reserve’s April meeting showed policymakers remain concerned inflation could stay above the 2% target, keeping the possibility of additional rate hikes alive.
Economic Data Shows Continued Strength in U.S. Labor and Manufacturing Activity
Despite market pressure, economic data released Thursday remained relatively resilient.
The Department of Labor reported:
- Initial jobless claims fell to 209,000, below expectations
- Continuing claims rose modestly but remained lower than forecasts
Separately, S&P Global PMI data showed overall U.S. business activity remained stable in May, while manufacturing indicators reached multi-year highs.
Nvidia Earnings Beat Expectations but Shares Still Decline
Nvidia remained one of the market’s biggest focus points after reporting stronger-than-expected quarterly results.
Highlights included:
- Revenue surged 85% year-over-year to $81.62 billion
- Adjusted net income more than doubled to $45.55 billion
- The company announced an $80 billion share buyback program
- Revenue guidance exceeded analyst expectations
CEO Jensen Huang stated hyperscaler capital expenditure could reach $1 trillion this year, emphasizing AI infrastructure demand.
Despite the strong performance, Nvidia shares fell roughly 2%, as investors questioned whether the company can sustain growth at its current valuation.
Walmart Slides While IBM and Quantum Stocks Rally
Among individual stocks:
- Walmart dropped 7.1% despite beating quarterly revenue expectations, after maintaining unchanged annual guidance and citing higher fuel costs.
- Intuit plunged nearly 20% after lowering revenue forecasts and announcing workforce reductions.
- Quantum computing companies surged after reports the Trump administration may provide $2 billion in grants to the industry.
IBM, expected to receive approximately $1 billion in support, jumped 7.5%, helping limit losses in the Dow Jones index.
