Markets are wrestling with a renewed jump in oil prices even as a slate of strong corporate reports earlier this week helped lift U.S. indexes to fresh peaks. The picture is complex: a spurt in crude has put upward pressure on risk premiums while high-profile earnings have continued to exert upward influence on equity valuations.
Geopolitical friction between the United States and Iran remains a central driver of the commodity move. The United States has extended a unilateral maritime blockade and continued to seize Iranian vessels, while Iran has persisted in attacks on shipping in the Strait of Hormuz. Peace overtures that were tentatively scheduled this week did not materialize, with neither side attending and Iranian officials describing the U.S. blockade as a violation of any existing truce. The unclear status of any ceasefire is translating into higher energy risk premia.
Brent crude climbed above $103 per barrel early on Thursday while U.S. West Texas Intermediate traded above $94 per barrel. Both benchmarks rose by more than 3% on Wednesday, and Brent’s settlement above $100 marked the first close above that level in more than two weeks. The move in oil weighed on stocks on Thursday despite prior gains that pushed the S&P 500 and the Nasdaq to new records the day before.
Equities outside the United States echoed the retrenchment: major Asian indices ended lower on Thursday even after touching fresh highs earlier in the session. U.S. futures pulled back ahead of the Thursday open, and European shares began the trading day in negative territory.
Corporate earnings continued to frame market sentiment. Tesla led the post-close earnings calendar on Wednesday. Shares initially rose after the automaker reported positive free cash flow, but that initial strength was largely erased as investors absorbed a much larger estimate of capital expenditure for 2026 - projected to exceed $25 billion. The revised capex outlook appears to have counterbalanced the short-term cash flow beat.
IBM’s results disappointed, with the company reporting slower revenue growth in the first quarter driven by weakness in its software division. That report sent IBM shares down roughly 6.5% in after-hours trading and revived some investor concern about the durability of software-led AI momentum that had pressured the sector in late February.
By contrast, Boeing posted a smaller-than-expected first-quarter net loss, which propelled its share price up about 5% following the release. Chipmaker Intel, which has been a strong performer in 2026 with an advance of over 75% year-to-date, is scheduled to report later in the trading day. Intel’s rally this month received an extra boost from news that Tesla plans to deploy the company’s 14A chip technology for its Terafab chip complex project.
Regional economic indicators offered a mixed backdrop for markets. April business surveys in Asia, notably in Japan, showed surprising resilience despite the tighter energy backdrop. In contrast, euro zone activity contracted unexpectedly in April as demand for services fell at the fastest pace since October 2023.
On the semiconductor front, SK Hynix, the world’s second-largest memory chipmaker, reported a record quarterly profit with earnings that were five times higher than a year earlier. The company forecast that demand for AI-related chips would exceed manufacturing capacity, underscoring ongoing supply constraints for high bandwidth memory chips used in AI systems. SK Hynix’s stock has surged nearly 90% so far this year, lifting its market capitalization to almost $600 billion and placing it above Europe’s most valuable company, ASML, on that metric.
Looking ahead, several U.S. data releases and corporate reports are scheduled that could further influence markets: weekly jobless claims, April S&P Global flash PMIs, a 5-year TIPS auction, and corporate earnings from Intel, Lockheed Martin, and Blackstone. These items will likely be parsed in light of the oil price move and the recent string of company-by-company results.
There are a number of ongoing commentaries and forums intended to unpack these developments. A recent column discussed the potential implications were a Warsh-led Federal Reserve to alter inflation targets. A podcast episode examined the interplay between technology earnings and the recent jump in oil, and a live webinar with a colleague is scheduled for later today to explore safe-haven assets amid heightened uncertainty.
Key events to watch today:
- U.S. weekly jobless claims - 8:30 a.m. EDT
- U.S. April S&P Global flash PMIs - 9:45 a.m. EDT
- U.S. 5-year TIPS auction - 1:00 p.m. EDT
- U.S. corporate earnings: Intel, Lockheed Martin, Blackstone