U.S. stocks eased back from record highs on Thursday as a lack of progress in the U.S.-Iran standoff rekindled risk-off flows, pushing oil back above $94 per barrel and igniting a defensive rotation that hammered tech.
The pullback followed Wednesday’s record closes for both the S&P 500 and Nasdaq 100, amid a wave of mixed mega-cap earnings and sharp sell-offs in the software industry.
President Donald Trump on Thursday ordered the U.S. Navy to target any vessels laying mines in the Strait of Hormuz, adding that minesweepers were clearing the waterway.
That was enough to stall the recent record-setting rally, although losses remained contained as upbeat U.S. data softened the blow.
The S&P Global flash U.S. Composite PMI rose to 52 in April from 50.3, a three-month-high, while the Manufacturing PMI jumped to 54.0, its strongest reading since May 2022. Yet, price pressures also escalated, with business surveys indicating the highest input inflation in four years.
Across U.S. equity markets by midday Thursday, losses were broadly narrow with heavy declines in software names. The S&P 500 slipped 0.1% to 7,131, while the Dow Jones Industrial Average dropped 101 points, or 0.2%, to 49,389.
The Nasdaq 100 was virtually flat at 26,926, while the small-cap Russell 2000 bucked the weakness, inching up less than 0.1% to 2,786.
Beneath the surface, software stocks bled at their worst pace of the year. The iShares Expanded Tech-Software Sector ETF (CBOE: IGV) plunged 5.4%, its worst session since early April 2025.
ServiceNow Inc. (NYSE:NOW) sank 17.5% — its worst day ever — as management flagged the recent Armis acquisition as a drag on 2026 margins and free cash flow, overshadowing a slim Q1 revenue beat at $3.77 billion.
The damage spread across the industry. Salesforce Inc. (NYSE:CRM) tumbled 8.8%, Palantir Technologies Inc. (NASDAQ:PLTR) plunged 6.6%, and Microsoft Corp. (NASDAQ:MSFT) dropped 3.3%.
Thursday’s Performance In Major US Indices
| Index | Last | % Change |
|---|---|---|
| S&P 500 | 7,131 | -0.1% |
| Dow Jones | 49,389 | -0.2% |
| Nasdaq 100 | 26,926 | -0.04% |
| Russell 2000 | 2,786 | +0.03% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) eased 0.1%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) fell 0.2%.
- The Invesco QQQ Trust (NASDAQ:QQQ) edged down less than 0.1%.
- The iShares Russell 2000 ETF (NYSE:IWM) ticked up less than 0.1%.
Utilities And Industrials Lead Defensive Rotation As Tech Wilts
The best-performing S&P 500 sector at midday was the Utilities Select Sector SPDR Fund (NYSE:XLU), up 2.4%.
The Industrials Select Sector SPDR Fund (NYSE:XLI) followed with a 1.9% gain, supported by strength in machinery and rails, while the Consumer Staples Select Sector SPDR Fund (NYSE:XLP) added 1.5% and the Real Estate Select Sector SPDR Fund (NYSE:XLRE) rose 0.9%.
On the downside, the Technology Select Sector SPDR Fund (NYSE:XLK) was the weakest corner of the tape, sliding 0.9%. The Financial Select Sector SPDR Fund (NYSE:XLF) fell 0.5% and the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) eased 0.4%.
Stocks React To Earnings Reports
- United Rentals Inc. (NYSE:URI) soared 22.1% to $980 after a record Q1 beat on both lines and a raised full-year revenue guide to $16.9–$17.4 billion.
- Texas Instruments Inc. (NASDAQ:TXN) jumped 18.0% after Q1 EPS of $1.68 crushed the $1.37 consensus, with Q2 revenue guidance pointing to accelerating industrial and data-center demand.
- PENN Entertainment Inc. (NASDAQ:PENN) rallied 15.3% as its retail segment hit a 33.2% adjusted EBITDA margin and management lifted full-year guidance, targeting interactive profitability by Q4.
- West Pharmaceutical Services Inc. (NYSE:WST) gained 12.5% on a clean Q1 top- and bottom-line beat, paired with a higher full-year revenue outlook of $3.32 billion.
- Molina Healthcare Inc. (NYSE:MOH) climbed 12.3% after adjusted Q1 EPS of $2.35 blew past the $1.29 consensus, with the insurer reaffirming its full-year guidance despite a $93 million Medicare Advantage impairment.
- Medpace Holdings Inc. (NASDAQ:MEDP) tumbled 22.4% on a weak 0.88x book-to-bill ratio and news that President Jesse Geiger will retire May 31.
- WEX Inc. (NYSE:WEX) dropped 16.2% despite a revenue beat and raised 2026 outlook, caught in broader momentum-unwind selling.
- International Business Machines Corp. (NYSE:IBM) tumbled 10% despite a Q1 beat, as investors balked at an unchanged full-year guide and decelerating software growth rekindled AI-disruption concerns.
Elsewhere, Avis Budget Group Inc. (NASDAQ:CAR) plunged 47.6% to $233, following a 37% drop on Wednesday, as a parabolic short squeeze unwound, accelerated by a JPMorgan downgrade to “Underweight”; options implied volatility spiked to 235% amid talk that some brokers were raising margin requirements to trade the name.
Lululemon Athletica Inc. (NASDAQ:LULU) slid 12.4% after the athletic-apparel company named ex-Nike veteran Heidi O’Neill as its next CEO, a pick that underwhelmed investors — including reported first choice of activist Elliott Investment Management — and creates a five-month leadership gap until her September start date.
Thursday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| United Rentals, Inc. | +22.12% |
| Texas Instruments Incorporated | +17.96% |
| PENN Entertainment, Inc. | +15.27% |
| West Pharmaceutical Services, Inc. | +12.54% |
| Molina Healthcare, Inc. | +12.34% |
Thursday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| Avis Budget Group, Inc. | -47.58% |
| Medpace Holdings, Inc. | -22.35% |
| ServiceNow, Inc. | -17.53% |
| WEX Inc. | -16.22% |
| Lululemon Athletica Inc. | -12.36% |
Image: Shutterstock
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