U.S. stocks slip as oil tops $100 amid Iran tensions and uneven earnings

U.S. stocks fell modestly Thursday as crude oil pushed further above $100 a barrel and investors weighed heightened tensions around the Strait of Hormuz alongside a patchwork of corporate earnings. The S&P 500 and Nasdaq pulled back from their latest record closing highs, while European equities ticked higher.

“Markets are trying to test how far they can run before there’s hard evidence of a resolution,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky, referring to the Iran war.

“We’ve had this incredible rally on the promise and directional shift toward peace, but at a certain point you need to see more hard evidence.” Oil’s climb accelerated after Iran flaunted its control over the Strait of Hormuz, a key chokepoint for global energy flows.

With crude above $100, the risk of an inflation flare-up lingered in the background. Data showed initial U.S. jobless claims increased only marginally last week, underscoring a still-resilient labor market even as investors showed signs of fatigue after recent gains.

Many are awaiting clearer signals on how and when the conflict may be resolved. Earnings offered little relief. IBM slumped 8% after its first-quarter revenue growth slowed on weakness in software. Tesla fell 2.6% after the company lifted its spending plan to more than $25 billion for the year.

A batch of mixed updates also reignited worries about AI-driven disruption across parts of the software sector. Travel-linked shares faced pressure as jet fuel prices climbed in the wake of the Strait of Hormuz closure. Airlines are said to be drafting contingency plans for a deepening crisis, including the possibility of mass flight cancellations.

Across Europe, the pan-European STOXX 600 rose 0.1% and the FTSEurofirst 300 added 4.52 points, or 0.18%, as investors balanced Middle East developments with a wave of corporate results. L’Oréal reported its fastest quarterly growth in two years, sending its shares up 8%, while Nokia gained more than 3% after reporting quarterly results.

In London, the FTSE 100 slipped 0.2% for a fourth straight decline, with banks Barclays and HSBC down 1.5% and 0.4% respectively. Travel and leisure names were supported by a 10% jump in Domino’s Pizza after first-quarter like-for-like sales grew 4.5%, while miner Fresnillo fell 6.4% as precious and base metals weakened.

The FTSE 100 is down 2% so far this week and is on track to erase nearly all gains sparked by hopes of a U.S.–Iran ceasefire announced earlier this month. With geopolitical risks unresolved and crude elevated, investors are looking for firmer signs on the trajectory of the Iran war and further guidance from earnings.

While the reporting season has been largely strong, results reflect only one month of disruption from the Middle East conflict, prompting questions about how reliable they are as a guide to what lies ahead.