By Connor Smith
Opening Day. The Nasdaq Composite closed in correction territory today as a Friday deadline for peace talks between Iran and the U.S. loomed. Then came the extension.
President Donald Trump said 11 minutes after the market closed that the U.S. would hold off on striking Iranian energy plants until Monday, April 6, at 8 p.m. ET. He said the new deadline was "As per Iranian Government request."
Worries that the war would escalate -- as the original Friday deadline loomed -- sent Brent crude oil futures 5.7% higher to $108.01 a barrel on Thursday. Oil prices later pulled back on Trump's announcement.
During regular trading Thursday, the Nasdaq fell 2.4% to finish the day down more than 10% from its Oct. 29 closing high. That puts it in correction until it rallies 10% from a recent low. If it closes 20% below its Oct. 29 close, it would enter a bear market.
The S&P 500, down 1.7% on the day, marked its lowest close since September, while the Dow Jones Industrial Average fell 469 points, or 1%.
A storm of negative headlines, in addition to Iran, sent a range of technology stocks tumbling. More on that below.
For the rest of the market, swings in oil prices related to Iran continued to be the main driver. But what if the market is overreacting?
Talley Léger, chief market strategist at The Wealth Consulting Group, argues "most of the bad news may be priced into U.S. markets." He writes:
In my view, the conflict in Iran has nothing to do with the price of oil in Texas. The U.S. is the top crude oil producer in the world and depends very little on imports from the Persian Gulf. Moreover, the U.S. economy and consumers are relatively insulated from the spike in oil and gasoline prices. We believe that the U.S. market is too well-supplied for such elevated WTI crude oil prices to persist. As such, we caution investors against overplaying their winning hands in the S&P 500 Energy sector.
Keith Lerner, chief investment officer at Truist, argues that the range of outcomes related to Iran remain wide. With near-term market moves being driven by headlines, investors have a limited edge, according to Lerner.
"Still, we have seen an incremental reset in expectations, valuations, and technical conditions," he writes.
Lerner isn't ready to make a high-conviction call that the worst is behind us. But he has observed oversold conditions in the market, pointing to 81% of S&P 500 stocks falling below their 50-day moving averages and the technology sector's price-to-earnings ratio dropping to 21.1, compared with 32 times in October.
"This supports a measured approach to putting some capital to work today, " he writes.
Despite all the steep selling on Thursday, Mizuho's Daniel O'Regan doesn't think there was much conviction behind it. He points to light volumes and feedback from clients that active managers and single-stock traders were "not doing anything." In fact, it was the lowest volume day since Jan. 2 for U.S. exchanges, according to Dow Jones Market Data.
Maybe all the active managers were glued to Major League Baseball's opening day. I know I had a hard time looking away from that Mets-Pirates game.
The Hot Stock: Brown-Forman +9.6% The Biggest Loser: Lumentum -11.4%
Best Sector: Energy +1.6% Worst Sector: Communication Services -3.5%
Tech's Swirling Storm
Big Tech stocks took a beating in Thursday's session.
The Roundhill Magnificent Seven ETF sank 3.3%. The biggest loser in that group was Meta Platforms after a courtroom defeat for the Facebook parent, along with Alphabet, had investors worried about a "Big Tobacco" moment.
My Barron's colleagues Adam Levine and Angela Palumbo report that the recent case has investors worried about a flood of settlements. They write:
A Los Angeles jury found Meta and Google's YouTube contributed to mental-health issues of a young woman during her childhood and teenage years because of the addictive nature of their products. The decision could be a bellwether, as the standard defense used by social-media companies that they are not liable for the third-party content hosted on their platforms was rejected. Meta and Google both told Barron's they disagreed with the verdict and plan to appeal in emailed statements to Barron's. Meta said teen mental health cannot be linked to a single app, while Google said the case mischaracterized YouTube as a social-media site rather than a streaming platform.
They report that the jury awarded $6 million in damages, but Meta and Alphabet face thousands of consolidated lawsuits.
The risk for the technology companies is that future juries choose to treat social-media addiction in the same way as tobacco companies were penalized in lawsuits over the harms of smoking. Cigarette makers have faced multiple multibillion-dollar settlements, the biggest being a 1998 agreement that required tobacco companies to pay $206 billion into state treasuries to cover smoking-related healthcare costs.
Elsewhere in tech, the iShares Semiconductor ETF tumbled 4.8%. Memory stocks were hit hard after Google published a research paper about TurboQuant, a compression algorithm, Adam and Angela also report:
TurboQuant is an algorithm designed to address bottlenecks in the key-value cache, which Google describes as a "digital cheat sheet," effectively acting as the short-term memory for an artificial-intelligence model. There are ways to compress information to fit more of it onto this cheat sheet but it still fills up quickly. The compression, however, can cause the model to hallucinate, or make mistakes.
Hearing about a sixfold reduction in anything related to AI use of memory could be alarming for investors who have ridden the boom in Micron and Sandisk, which has been built upon AI's ever-increasing demands for memory processors and storage capacity.
That could be an overreaction.
However, TurboQuant isn't as scary as it sounds. Firstly, it's not new -- a technical draft of research on the algorithm appeared online in April 2025. So it likely doesn't represent the cutting edge of what AI companies are currently doing and the claimed results may not be as dramatic with today's models.
"I am sure every cloud hyperscaler and LLM [large language model] builder has a lot of engineers and smart scientists working on similar technology as we speak," wrote Jordan Klein, a technology, media, and telecommunications sector specialist at Mizuho. "But if it was so good and in wide scale use at Google, trust me, they would not come out and publish a paper on it."
Did we mention oil surged more than 5%, a bad dynamic for hardware makers. It all combined to make for a dreadful day for tech. You can read more about the "Big Tobacco" legal cases here and TurboQuant here.
The Calendar
Carnival releases earning tomorrow.
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(END) Dow Jones Newswires
March 26, 2026 19:55 ET (23:55 GMT)
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