US stocks fell sharply on Thursday, erasing much of this week’s rebound as markets weighed the impact of strikes in the Middle East and the scale of inflation risks emerging from the conflict. The S&P 500 and the Dow Jones Industrial Average each lost about 0.8%, while the more defensive Nasdaq declined a relatively modest 0.4%.
Tehran rejected a US push for ceasefire talks, dampening hopes for a near-term end to the war and reinforcing expectations that energy exports through the Strait of Hormuz will remain disrupted. Treasury yields climbed as energy prices moved higher, pressuring speculative AI-related stocks.
Tesla, Microsoft, Amazon, and Meta fell between 1.5% and 3%. Chipmakers also weakened after Alphabet released research on more efficient AI models, sending Lam Research and Applied Materials down roughly 4%.
In corporate news, Jefferies edged higher despite flagging risks from private credit in its earnings update. Equitable Holdings and Corebridge both gained around 2% after announcing an all-stock merger valued at a combined $22 billion.
