Dow, Nasdaq Fall as Oil Rises, Iran Deal Hopes Fade

U.S. stocks retreated from record territory as traders reassessed whether the earlier rally on easing U.S.-Iran tensions had gone too far. Brent crude briefly moved above $107 a barrel, oil rose for a fourth straight day, and the Dow fell about 250 points while the S&P 500 slipped 0.5% and the Nasdaq also lost ground.

The selloff looked less like one clean macro move than a jumble of anxieties converging at once. Geopolitical fears returned to the foreground as hopes for a breakthrough in peace talks faded, helping reverse the calm that had lifted risk appetite earlier in the week. Investors who had bid up stocks on expectations of lower oil and cooler Middle East tensions were suddenly facing the opposite setup: firmer crude, weaker negotiations, and a market that had already run hard.

Software shares added a second layer of pressure. IBM tumbled 10.3% after first-quarter revenue growth slowed, with weakness in its software business, including Red Hat, and ServiceNow also renewed concern that artificial intelligence could disrupt the software model. That left the sector vulnerable even beyond the broader pullback in technology, with investors questioning whether earnings growth can keep pace with valuations while AI changes the economics of enterprise software.

Megacap earnings deepened the caution. Tesla reported first-quarter 2026 results after the bell on Wednesday, April 22, and raised capital expenditure guidance for 2026 to more than $25 billion, from about $20 billion previously. The company also said it expected negative free cash flow for the rest of 2026, a reminder that even the biggest names in the market are navigating heavier spending demands and tighter investor scrutiny. Intel was next on deck, with first-quarter results scheduled for Thursday after the close, adding another test for a technology sector already on edge.

The day’s trading suggested a market that is still willing to absorb good news, but not without demanding more proof. The earlier rally had been built on the idea that lower geopolitical risk would ease oil and support earnings. By Thursday, that thesis was under strain, and investors were treating the combination of rising crude, fragile diplomacy and mixed tech results as more than a one-day wobble. The question now is whether the pullback remains a software and earnings reset, or whether it marks the start of a broader risk-off turn for the economy.