Dow, S&P 500 fall as oil prices rise and Nvidia fails to lift sentiment

• WTI crude jumped 2.9% to $101.04 per barrel and Brent rose 2.3% to $107.36 after Iran's Supreme Leader reportedly directed enriched uranium remain in-country, reversing Wednesday's optimism over nuclear negotiations
• The 10-year Treasury yield climbed 5 basis points to 4.615% as higher oil prices intensified inflation worries and complicated the Federal Reserve's policy outlook
• Nvidia stock fell despite beating earnings, announcing an $80 billion buyback, and raising its dividend to 25 cents per share, as investors questioned growth sustainability amid intensifying AI chip competition

Market Summary

Market Performance:

US equities declined Thursday with the S&P 500 falling 0.48%, Nasdaq Composite down 0.56%, and Dow Jones dropping 242 points (0.49%). The selloff was driven by surging oil prices and rising Treasury yields amid renewed geopolitical tensions.

Key Drivers:

Oil prices jumped sharply after a Reuters report indicated Iran's Supreme Leader ordered enriched uranium to remain domestically, reversing Wednesday's optimism about potential US-Iran negotiations. West Texas Intermediate crude rose 2.9% to $101.04 per barrel, while Brent gained 2.3% to $107.36. The 10-year Treasury yield climbed 5 basis points to 4.615%, reflecting heightened inflation concerns.

Company Highlights:

• Nvidia (NVDA): Despite reporting strong earnings, announcing an $80 billion buyback program, and raising its quarterly dividend to $0.25 per share, the stock declined as investors questioned valuation sustainability amid intensifying AI chip competition from Intel and AMD.

• Walmart: Shares fell after the retailer warned on profit outlook.

• Intuit: Stock dropped sharply following lowered annual TurboTax revenue guidance and plans to cut 17% of its workforce.

• Quantum Computing Stocks: IBM and other quantum stocks rallied on reports of potential $2 billion US government funding, with IBM expected to receive approximately $1 billion.

• SpaceX: Publicly filed for its IPO, revealing details about CEO Elon Musk's AI ambitions.

Market Implications:

Elevated energy prices and geopolitical instability threaten to fuel inflation and complicate Federal Reserve policy decisions, creating headwinds for equity markets despite strong corporate fundamentals.