U.S. stock benchmarks finished Thursday's session in negative territory as escalating tensions between Washington and Tehran pushed crude prices to their highest level in nearly a month. The Dow Jones Industrial Average slid 1.32% to close at 52,759.21, the S&P 500 fell 0.87% to 7,641.16, and the Nasdaq Composite dropped 1% to 26,067.17.
President Trump declared that the economic measures being imposed on Iran represent the harshest action yet, describing it as an unprecedented economic campaign and isolation effort. He warned that any nation permitting its financial institutions, businesses, airports, or government entities to support Tehran would face severe economic repercussions. Iranian Foreign Minister Araghchi responded by suggesting the U.S. move is designed to deflect attention from domestic fiscal problems, including mounting debt and rising interest costs.
Treasury Secretary Bessent announced he would hold a press conference on Monday to detail the administration's action plan against Iran. He also intensified pressure on American allies, stating that nations are either with the U.S. or against it, while adding that a large-scale military re-engagement is unlikely. Reports from Tehran indicate negotiations with Oman over a joint mechanism for ship passage through the Strait of Hormuz are in their final stages, a development that has frustrated Trump, who threatened on the 17th to bomb Oman if it obstructs American efforts to reopen the waterway.
On the economic data front, initial jobless claims fell by 6,000 to 206,000 last week, coming in below the 210,000 economists had forecast. Continuing claims rose to 1.799 million, slightly exceeding the expected 1.79 million. St. Louis Fed President Musalem reiterated that he would have preferred a rate hike at the July meeting to combat persistently high inflation, warning that without such action, the likelihood of inflation failing to return to the Fed's 2% target within 18 months has increased.
Shares of SpaceX retreated to near their initial public offering price, pressured by another wave of share unlock. Approximately 319 million shares held by early employees and investors became eligible for trading on Thursday, marking the 70th tranche of a staggered lockup arrangement that will eventually release about 88% of SpaceX's 13 billion total shares by 2027. The stock fell 4.05%, dipping below the $135 IPO price.
Despite posting revenue of $187.9 billion for its fiscal second quarter ended July 31, up 5.9% year-over-year, and adjusted earnings per share of $0.81—both beating Wall Street estimates—Wal-Mart (NYSE: WMT) saw its shares plunge more than 9%. The retail bellwether also raised its full-year sales and profit guidance. However, comparable sales across U.S. physical and digital channels grew just 2.6%, below the roughly 3.8% analysts had anticipated, marking the slowest pace in six years and the first miss on this core metric in at least five years. Even excluding the impact of Medicare drug price negotiations on pharmacy operations, core comparable sales rose about 3.4%, still short of expectations. The stock at one point dropped nearly 10% intraday before closing down about 9%, its worst single-day performance in over four years, dragging down both consumer staples and discretionary sectors.
Semiconductor stocks were mixed, with the Philadelphia Semiconductor Index advancing 0.53%. Marvell Technology (NASDAQ: MRVL) climbed over 5%, Micron Technology (NASDAQ: MU) gained nearly 4%, Lam Research rose more than 1%, and Taiwan Semiconductor Manufacturing (NYSE: TSM) added close to 1%. On the downside, GlobalFoundries fell over 2%, ON Semiconductor dropped more than 2%, and NXP Semiconductors lost over 1%.
SK Hynix, in partnership with the University of Virginia and other institutions, unveiled a next-generation co-packaged optics roadmap aimed at extending optical interconnects to memory interfaces and building a photonics-centric architecture. The company also reached a tentative labor agreement securing a 6.3% wage increase for 2026, while shifting performance bonus distribution from full cash to a 40% cash and 60% stock mix.
Micron Technology announced the establishment of the Micron Research Laboratory, committing $10 billion over the next decade to focus on memory technology, advanced computing architectures, packaging processes, and semiconductor manufacturing. This investment is separate from the company's previously announced $250 billion-plus commitment to U.S. manufacturing and R&D.
Taiwan Semiconductor Manufacturing completed development and validation of its 1.6nm-class A16 process, with mass production scheduled for the fourth quarter of this year. Targeting the AI and high-performance computing markets, the A16 node delivers an 8%–10% performance boost at equivalent power, a 15%–20% power reduction at equivalent performance, and an 8%–10% increase in chip density compared to the enhanced 2nm N2P process.
Crude oil prices climbed to their highest level in a month on Thursday, driven by Trump's threats of further economic action against Iran and diminished prospects for an end to Middle East hostilities. Brent crude settled just below $94 per barrel, reaching its strongest level in nearly a month. Tamas Varga of PVM Oil Associates noted that in a news-driven market, the President's latest statements are fueling upward price momentum. Additionally, Iranian Central Bank Governor Abdolnaser Hemmati confirmed that the country's oil exports have effectively ground to a halt amid the ongoing U.S. military blockade.
At the close, September-delivery WTI crude rose 2.3% to $87.83 per barrel, October WTI gained 2.9% to $86.83, and October Brent climbed 2.4% to $93.78. Energy equities rallied across the board, with Exxon Mobil up nearly 1%, Chevron edging 0.04% higher, ConocoPhillips surging over 3%, Schlumberger gaining 0.04%, and Occidental Petroleum rising more than 2%.
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