U.S. stocks mixed as oil surges past $104 on Middle East tension

U.S. stocks closed mixed on Thursday as Brent crude surged 4.1% past $104 per barrel on Middle East tensions and supply concerns, while technology stocks fell 1.8% after reports of lower-than-expected AI revenues at OpenAI. The S&P 500 dropped 0.5% and the Nasdaq fell 1.3%, offsetting gains in energy and staples sectors.

Quick Facts

U.S. stock markets closed with mixed results
Oil prices surged on Middle East tensions and supply disruptions
Technology and semiconductor stocks fell sharply
Bond market yields jumped then declined
Initial unemployment claims decreased

U.S. stock markets closed mixed on Thursday, with the S&P 500 falling 0.5% to 7,765.36 and the Nasdaq Composite declining 1.3% to 27,193.34, while the Dow Jones Industrial Average gained 0.1% to 51,231.64. Oil prices surged amid Middle East tensions and supply disruptions, with Brent crude rising 4.1% to $104.28 per barrel and West Texas Intermediate crude climbing 3.6% to $91.49. The oil rally was initially driven by attacks on shipping in the Strait of Hormuz and hurricane-related cuts to U.S. output, though prices pared gains after President Donald Trump stated the United States would not conduct military strikes against Iran before the midterm elections.

Technology and semiconductor stocks bore the brunt of selling pressure, with the sector falling 1.78% as chipmakers slumped 3.4% following a Financial Times report that OpenAI's annualized revenue was $20 billion lower than previously signaled. Major chipmakers including Nvidia, Micron Technology, and Intel declined, rekindling investor concerns about valuations and profit growth in the artificial intelligence sector. Energy and consumer staples stocks outperformed, gaining 2.92% and 2.12% respectively, as higher oil prices benefited energy companies.

Bond markets remained volatile, with the 10-year Treasury yield jumping to 5.35% early Thursday before declining to 5.26% by session end. The yield remains near its highest level since 2002, well above pre-Iran conflict levels, amid concerns about inflation, government debt, and potential rate hikes. The Federal Reserve hiked rates in September for the first time since July 2023 in response to oil-driven inflation pressures. Financial markets currently price in unchanged rates this month but assign a 69.2% probability to a December hike, according to CME's FedWatch tool.

Economic data provided some support, with initial unemployment claims declining to 197,000 for the week ending October 3, suggesting subdued corporate layoff activity. Corporate earnings reports began, with PepsiCo rising 3.7% after beating expectations on profit and revenue despite cutting its full-year profit forecast. Levi Strauss fell over 2% after reporting profit beats but disappointing revenue growth. Analysts expect S&P 500 companies to deliver nearly 30% earnings growth in the third quarter, a high bar that pressures stock prices amid elevated bond yields.

Topics

Politics Iran and Middle East War Technology Business World Artificial Intelligence

#earnings season #crude oil #technology stocks #Middle East tensions #semiconductor stocks #interest rates #OpenAI #U.S. stocks #Nasdaq #artificial intelligence

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Why This Matters

U.S. equity investors face divergent sectoral pressures: energy stocks gain as crude prices climb above $104 per barrel due to Strait of Hormuz disruptions and U.S. hurricane-related output cuts, while technology and semiconductor valuations compress following reports of OpenAI's annualized revenue shortfall. Treasury yields near 22-year highs (5.26% on the 10-year) increase borrowing costs for corporations reporting third-quarter earnings; markets now assign a 69.2% probability to a December Federal Reserve rate hold. Upcoming earnings guidance and Federal Reserve communications will determine whether current volatility reflects temporary oil-shock adjustment or sustained asset repricing.

Timeline & Sources

Sep 1, 2026

Wire

Federal Reserve hiked interest rates for the first time since July 2023 in response to inflation concerns

Oct 3, 2026

Wire

Week ending October 3: initial unemployment claims fell to 197,000

Oct 8, 2026

Wire

10-year Treasury yield fell back to 5.26% in afternoon

Oct 9, 2026

Wire

Third-quarter earnings season begins

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