US equities retreat as Iran nuclear tensions drive oil above $100
Oil prices surge on geopolitical risk, Treasury yields rise, and corporate results offer mixed signals for investors.
US stock markets declined on Thursday as geopolitical tensions in the Middle East overshadowed corporate earnings, with oil prices surging following comments by Iran’s supreme leader regarding its near-weapons-grade uranium stockpile. The S&P 500 fell 0.4% and the Nasdaq Composite dropped 0.6%, while the Dow Jones Industrial Average rose marginally by 0.1%. The sell-off followed a directive from Iran’s supreme leader stating that the country’s supply of near-weapons-grade uranium should not be sent abroad, casting doubt on peace talks with the United States.
Oil prices rose sharply, with Brent crude exceeding $108 per barrel and US WTI topping $100. The spike occurred after Reuters reported the supreme leader’s edict, complicating negotiations where the White House has stated the removal of Iran’s enriched uranium supply is a key red line. President Trump suggested a resolution could be imminent but acknowledged Iran was reviewing the latest peace proposal. Despite the volatility, traders continue to price in the possibility of an abrupt de-escalation, although Abu Dhabi National Oil Co CEO Sultan Al Jaber noted that Middle East oil flows would not fully recover until well into 2027 even if conflict ended immediately.
In the technology sector, Nvidia reported earnings that beat expectations on revenue and profit, but shares fell as investors sought stronger signals of future demand. The AI giant issued an upbeat forecast for chip sales, yet the market reaction remained subdued. Meanwhile, SpaceX took a significant step toward an initial public offering by filing its S-1 registration statement with the Securities and Exchange Commission, providing a rare public view into the company’s financials.
Corporate results offered a mixed bag for investors. Walmart reported first-quarter revenue and earnings per share above estimates, driven by higher foot traffic and 26% growth in e-commerce sales. However, its second-quarter outlook was lighter than expected, causing shares to fall in premarket trading. In the automotive industry, Stellantis announced a restructuring plan to focus on four core brands—Jeep, Ram, Peugeot, and Fiat—while sidelining others like Chrysler, aiming to raise returns by up to 10% in North America by 2030.
Bond yields increased, with the 2-year Treasury yield reaching 4.1% and the 10-year yield nearing 4.7%, signalling to the Federal Reserve that interest rates may not be high enough. Initial jobless claims rose to 209,000 for the week ended May 16, coming in below the consensus estimate of 210,000. LPL Financial chief economist Jeffrey Roach argued that AI is likely to reallocate tasks rather than displace workers, citing the Jevons paradox where increased efficiency leads to higher demand for labour. The Trump administration is also reportedly negotiating $2 billion in grants for equity stakes in nine quantum-computing companies, including IBM and GlobalFoundries, sending shares of those firms higher in premarket trading.
