Nasdaq Enters Correction Territory as Stocks Log Fifth Straight Weekly Loss

Five straight weeks of losses culminated Thursday in the Nasdaq Composite officially entering correction territory, a milestone Wall Street had been bracing for since the US-Israeli war on Iran sent oil prices spiraling and scrambled the calculus for corporate earnings and Federal Reserve policy alike.

The Nasdaq Composite shed 521.74 points, or 2.38%, to close at 21,408.08, while the S&P 500 lost 114.74 points, or 1.74%, to 6,477.16, and the Dow Jones Industrial Average fell 469.38 points, or 1.01%, to 45,960.11. The technology-heavy Nasdaq closed down 10.7% from its October 29 closing record high, confirming it has been in a correction since that date. The Dow and S&P 500 were not far behind, with respective pullbacks of 8.4% and 7.1% from their record-closing highs.

The S&P 500 has been at a loss for five weeks, putting it on pace for its longest streak of weekly losses since 2022. The proximate trigger was a fresh collapse in ceasefire hopes between Washington and Tehran. US stocks sank Thursday, with Big Tech and semiconductor stocks leading the sell-off, as conflicting messages from the US and Iran fueled mounting uncertainty over the Middle East conflict while oil hovered above $100.

The oil market delivered its own jolt. International benchmark Brent crude futures added 5.66% to $108.01 per barrel on Thursday, while US West Texas Intermediate futures climbed 4.61% to $94.48 per barrel. Since the war started, the cost of US crude oil has risen more than 40%; since the start of the year, it has climbed more than 60%. The geopolitical backdrop driving those moves remained deeply unstable. Oil prices rose Thursday after Iran signaled it had no intention of holding direct talks with the United States, even as a US proposal to end the war was under review by senior officials in Tehran.

The diplomatic picture was muddied further by conflicting statements from both sides. Trump had announced a five-day pause on strikes against Iranian energy infrastructure on Monday, writing on Truth Social that the US and Iran had "very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East." But by Thursday the tone had sharpened. The sides remained at odds over a potential ceasefire, and Trump amped up his rhetoric, warning Iran to "get serious" and make a deal before it was "too late." Tehran denied that it was in direct talks with the US.

The original five-day pause on US attacks on Iran's power plants and energy infrastructure had been due to end Friday; Trump had announced the first pause on Monday on Truth Social. In a Thursday Truth Social post, Trump said he was "pausing the period of Energy Plant destruction," adding that talks are "ongoing and, despite erroneous statements to the contrary by the Fake News Media, and others, they are going very well."

The market damage was broad across the technology sector. CrowdStrike headlined losses across the Nasdaq, falling 4%, followed by Shopify at 2.5%, Intuit and Palantir each down 2%, and Meta, Microsoft, and Alphabet each losing 1.2%. Meta, the biggest laggard among the "Magnificent Seven" on Thursday, dropped around 6% in the aftermath of a landmark ruling in which a Los Angeles jury found Meta and Alphabet's YouTube liable for damages to a young user, focusing on the companies' platform designs rather than content moderation. Chip stocks were also hit following Google's published research on a new algorithm designed to reduce AI memory usage, a development that rattled memory and semiconductor stocks.

Growth stocks have come under pressure in recent weeks as rising oil prices fueled inflation expectations, reducing the likelihood that the Federal Reserve will cut interest rates this year if oil prices remain elevated. Fed Chair Jerome Powell signaled earlier in the week that it was "too soon" to know how the war would disrupt the US economy, noting the impact remained "uncertain," specifically whether surging oil and energy prices would boost inflation. The OECD separately forecast all-items inflation in the US at 4.2% for 2026, a sharp step up from its prior projection of 2.8%.

Noting that stock markets have generally been weaker on Fridays since the Iran war began a month ago, Peter Tuz, president of Chase Investment Counsel, said the S&P 500 could follow the Nasdaq in confirming a correction. The International Energy Agency assessed that the current episode is the largest supply disruption in the history of the global oil market, with flows through the Strait of Hormuz collapsing from 20 million barrels per day to a trickle and Gulf production cuts of at least 10 million barrels per day. With that backdrop unresolved and Brent crude now more than 35% above where it began March, investors have little reason to expect the weekly loss streak to break without a concrete shift in the war's trajectory.