The S&P 500 Index ($ SPX ) ( SPY ) closed down -0.56% on Thursday, the Dow Jones Industrial Average ($DOWI) ( DIA ) closed down -1.61%, and the Nasdaq 100 Index ($ IUXX ) ( QQQ ) closed down -0.29%. March E-mini S&P futures (ESH26) fell -0.60%, and March E-mini Nasdaq futures (NQH26) fell -0.35%.
Stock indexes retreated on Thursday, with the Dow Jones Industrial Average falling to a 2.75-month low. Stocks were under pressure on Thursday amid concerns about inflation, as oil prices rose amid growing disruptions to energy markets due to the war in Iran. WTI crude (CLJ26) rose more than +8% to a 19.5-month high, fueling inflation concerns and pushing up bond yields. However, crude oil prices fell more than $3 a barrel from their highs in late afternoon trading on Thursday after US Interior Secretary Brigham said the government was considering emergency measures to stabilize crude prices. The 10-year T-note yield rose to a 3-week high of 4.15% on Thursday.
Losses in stocks came amid underlying support from some positive economic and corporate news on Thursday. Weekly U.S. jobless claims rose slightly more than expected, and Q4 nonfarm payrolls rose more than expected. Also, Broadcom rose more than +5% after CEO Tan said the company expects AI chip sales to top $100 billion next year. Additionally, strength in software stocks on Thursday limited losses in the broader market.
The US-Israeli war against Iran reached the sixth day on Thursday and Iran promised to increase the series of revenge. Arab countries across the Persian Gulf reported interception of Iranian missiles and drones overnight and on Thursday.
Crude oil prices hit a 19.5-month high on Thursday as the Strait of Hormuz remains closed, cutting off most energy shipments from the Persian Gulf. Iran’s Islamic Revolutionary Guard Corps has warned ships to avoid crossing, saying ships “may be at risk from missiles or drones.” The closure of the Strait of Hormuz, which handles a fifth of the world’s oil, has restricted exports and forced Gulf producers to store crude in regional storage tanks. Iraq, OPEC’s second-largest producer, halted oil production at one of its biggest oil fields in Romania as local storage tanks filled up. Also, Kairos reported on Wednesday that four of six tanks at Saudi Arabia’s Ras Tanura refinery were full, and the Juma terminal on the country’s east coast was quickly running out of excess capacity. Goldman Sachs estimates the real-time risk premium for crude oil at $18/bbl, assuming the impact of a six-week total shutdown on oil traffic in the Strait of Hormuz.
In addition, the downing of an intercepted Iranian drone on Tuesday caused a major fire in the UAE’s main oil trading hub, Fujairah, a major oil storage hub in the Middle East. Natural gas prices in Europe hit three-year highs on Tuesday after Qatar shut down the world’s largest natural gas exporter, the Ras Laffan plant, following an Iranian drone attack. Ross Laffan produces about 20% of the world’s liquefied natural gas. On Thursday, China told its biggest refiner to suspend diesel and gasoline exports due to the escalating conflict in the Persian Gulf, which will tighten global oil supplies and push oil prices higher.
US February Challenger job cuts fell -71.9% y/y to 48,307.
Initial weekly US jobless claims were unchanged at 213,000, showing a slightly stronger labor market than expectations for 215,000.
Q4 nonfarm payrolls rose +2.8%, better than expectations of +1.9%. Q4 unit labor costs rose +2.8%, stronger than expectations of +2.0%.
Hawkish comments from Richmond Fed President Tom Barkin today were bleak for stocks when he said the latest and expected data reflected “several months of relatively high inflation,” which “definitely overturns any conclusion that we’ve been fighting.”
This week’s market focus will be on US-Iran war news, corporate earnings, and economic news. On Friday, February non-farm payrolls are expected to increase by +60,000, and the February unemployment rate will remain unchanged at 4.3%. Also, February average hourly earnings are expected to be +0.3% m/m and +3.7% y/y. In addition, February retail sales are expected to fall -0.3% m/m and February retail sales of previous vehicles are expected to remain unchanged.
With Q4 earnings season nearing its end, more than 90% of S&P 500 companies have reported earnings results. Earnings were a positive factor for stocks, with 73% of the 481 S&P 500 companies beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to increase to +8.4% in Q4, marking the tenth consecutive quarter of year-over-year gains. Excluding top seven megacap technology stocks, Q4 earnings are expected to increase +4.6%.
Markets are discounting a 4% chance of a -25 bp rate cut at the next policy meeting on March 17-18.
Foreign stock markets were mixed on Thursday. The Euro Stoxx 50 was down -1.50%. The China Shanghai Composite closed up +0.64%. Japan’s Nikkei stock rose 225 +1.90%.
Interest rates
The June 10-year T-notes (ZNM6) closed by -16 points on Thursday. The 10-year T-note yield rose by +3.5 bp to 4.131%. June T-notes fell to a 3-week low on Thursday, and the 10-year T-note yield hit a 3-week high of 4.148%. Fears of rising inflation weighed on T-note prices after WTI crude oil hit a 19.5-month high on Thursday, boosting inflation expectations, with the 10-year breakeven rate rising to a 3-week high of 2.329%. Also, Thursday’s US economic reports, which showed weekly jobless claims rose slightly more than expected, and Q4 unit labor costs rose more than expected, were bearish for Fed policy and T-notes.
European government bond yields rose on Thursday. The 10-year German bund yield rose to a 3.5-week high of 2.854% and ended +9.1 bp at 2.841%. The 10-year UK gilt yield hit a 3.5-week high of 4.558% and ended +10.1 bp at 4.542%.
Eurozone Jan retail sales unexpectedly fell -0.1% m/m, weaker than expectations of +0.3% m/m
ECB Vice President Luis de Guindos said a protracted war in the Middle East would risk raising inflation expectations.
ECB Governing Council member and Bundesbank President Joachim Nagel said inflation was a bigger concern than economic growth as the ECB assessed the impact of the war in Iran.
Swaps discount a 5% chance of a -25 bp rate hike by the ECB at its next policy meeting on March 19.
US stock movers
Chipmakers and AI-infrastructure stocks were under pressure on Thursday, weighing on the broader market. Lam Research ( LRCX ) closed more than -4%, and ARM Holdings Plc ( ARM ), Analog Devices ( ADI ), Applied Materials ( AMAT ), KLA Corp ( KLAC ), NXP Semiconductors NV ( NXPI ), Marvell Technologies ( MRVL ), and Microchip Technologies ( MCHP ) closed more than -3%. Also, Seagate Technologies Holdings Plc ( STX ), ASML Holding NV ( ASML ), and Texas Instruments ( TXN ) closed more than -2%.
Airline stocks sold off on Thursday as crude oil prices rose +8% to a 19.5-month high, pushing up jet fuel prices and potentially cutting into airlines’ profits. Alaska Airlines Group ( ALK ) closed more than -9%, and Southwest Airlines ( LUV ) closed more than -6%. as well as,
American Airlines Group ( AAL ) and United Airlines Holdings ( UAL ) closed more than -5%, and Delta Air Lines ( DAL ) closed more than -3%.
Homebuilders fell on Thursday after the 10-year T-note yield hit a 3-week high, which is pushing up mortgage rates and is a negative factor for housing demand. Lennar ( LEN ), Toll Brothers ( TOL ), and KB Home ( KBH ) closed more than -2%. Also, PulteGroup ( PHM ) and DR Horton ( DHI ) closed more than -1%.
Software stocks rose on Thursday to limit losses in the broader market. Atlassian ( TEAM ) closed more than +7%, and ServiceNow ( NOW ) and Intuit ( INTU ) closed more than +5%. Also, Salesforce ( CRM ) closed more than +4%, and Thomson Reuters ( TRI ) closed more than +4% to be the leading gainer in the Dow Jones Industrials. In addition, Datadog ( DDOG ) and Adobe Systems ( ADBE ) closed more than +3%, and Workday ( WDAY ) and Autodesk ( ADSK ) closed more than +2%.
Online travel agencies rallied on Thursday after a report from Mizuho Securities said that ChatGPT’s move away from the platform’s shopping checkout, if true, would be “a Waterloo moment for e-commerce AI-disruption.” Expedia Group ( EXPE ) closed more than +13%, and Booking Holdings ( BKNG ) closed more than +8%. Also, DoorDash ( DASH ) closed more than +3%, and TripAdvisor ( TRIP ) closed more than +2%.
American Eagle Outfitters (AEO) closed down more than -13% after CFO Mathis said most of the company’s profit would be generated in the second half of the year.
Stubhub Holdings (STUB) closed down more than -12% after reporting a Q4 loss of $1.56 per share, a bigger loss than consensus by -$0.03, and forecast 2026 gross sales of $9.9 billion to $10.1 billion, well below the $123 billion consensus.
IREN Ltd. ( IREN ) closed down more than -8% after filing for a potential offering of up to $6 billion in common shares.
McKesson Corp ( MCK ) closed more than -4% after CFO Vitalone said he would retire on May 29.
Walmart ( WMT ) closed down more than -3% after Erst Group downgraded the stock to keep from buying.
BJ’s Wholesale Club Holdings ( BJ ) is down more than -2% after 2027 adjusted EPS forecast from $4.40 to $4.60, below consensus of $4.66.
Trading Desk ( TTD ) closed up more than +18% to be the leading gainer in the S&P 500 after data reported that the company entered into talks to help sell OpenAI advertising.
Burlington Stores ( BURL ) closed up more than +7% after reporting Q4 consensus EPS of $4.89, better than the $4.72 consensus, and adjusted 2027 EPS from $10.95 to $11.45, the midpoint above the $11.11 consensus.
Broadcom ( AVGO ) closed more than +5% after CEO Tan said the company expects its AI chip sales to top $100 billion next year.
Astera Labs (ALAB) closed up more than +5% after Loop Capital Markets initiated coverage on the stock with a buy recommendation and a $250 price target.
Veeva Systems ( VEEV ) closed up more than +4% after reporting Q4 revenue of $836.0 million, better than consensus of $810.4 million, and forecasting 2027 revenue of $3.59 billion to $3.60 billion, stronger than consensus of $3.57 billion.
Fastenal ( FAST ) closed up more than +2% after reporting that its daily sales price for February rose 13%, better than Barclays’ estimate of 7.2%.
Earnings Reports (3/6/2026)
Aldeyra Therapeutics Inc (ALDX), American Car-Mart Inc/TX (CRMT), ECB Bancorp Inc/MD (ECBK), Eve Holding Inc (EVEX), Foghorn Therapeutics Inc (FHTX), Genesco Inc (GCO), Greene County Bankorp Inc (GCBC), Kingstone Cos Inc (BKINSK), National Services Inc (BKINSK). Corp (FIZZ), National Presto Industries Inc (NPK), NI Holdings Inc (NODK), Oruka Therapeutics Inc (ORKA), Prairie Operating Co (PROP), Silvercrest Asset Management Group (SAMG), Solid Biosciences Inc (SLDB), Tejon Ranch Co (TRC), Vox Royalty Corp ().
As of the date of publication, Amir Espland had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
