S&P 500 Pulls Back From Record Highs as Oil Prices Reverse

The S&P 500 retreated from freshly set all-time highs on Thursday, CNBC reported, as a sharp recovery in crude oil prices weighed on risk appetite across Wall Street.

The broad index shed roughly 0.4% in midday trading. The Nasdaq Composite slipped 0.2% after also touching a new intraday record. The Dow Jones Industrial Average fell more than 350 points, or approximately 0.7%.

Oil’s Reversal Spoils a Record-Setting Morning

Crude futures had traded sharply lower earlier in the session before reversing course. U.S. West Texas Intermediate futures climbed back above $95 per barrel, a gain of about 1%. International Brent crude edged above $101 a barrel. The swing rattled equities that had benefited from falling energy costs in prior sessions.

Investors had grown optimistic after Axios reported Wednesday that Washington and Tehran were approaching a preliminary agreement to end ongoing hostilities. Two U.S. officials and additional briefed sources described a potential one-page, 14-point memorandum of understanding. The framework would also set the stage for longer-term nuclear negotiations. An Iranian foreign ministry spokesperson acknowledged to CNBC that Tehran was weighing a U.S. proposal. However, Iranian state media later indicated no final response had been delivered.

A Bull Run Built on Earnings and AI Demand

Ross Mayfield, investment strategist at Baird, told CNBC the recent rally reflected three converging forces. A strong earnings season, resilient AI-driven momentum, and a sharp pivot in market sentiment all pushed stocks higher. Mayfield described the shift from widespread bearishness to aggressive optimism as rapid. He cautioned that the market may be technically overbought and entering a seasonally softer stretch. Even so, he characterized those as minor concerns rather than structural threats, suggesting conditions favor a continued melt-up absent an unexpected shock.

Individual Movers Highlight Earnings Divergence

Thursday’s session produced sharp moves at the company level. Cybersecurity firm Fortinet surged more than 22% after raising its full-year billings guidance. Datadog soared 28% after posting quarterly earnings well ahead of analyst estimates. Its second-quarter revenue outlook also topped expectations by a wide margin.

On the downside, Planet Fitness plunged nearly 33% after the gym chain slashed its full-year earnings growth forecast. Vital Farms dropped 20% following a surprise quarterly loss.

Inflation Expectations Edge Higher in New York Fed Survey

Separately, the Federal Reserve Bank of New York’s monthly consumer survey showed one-year inflation expectations ticked up to 3.6% in April, a 0.2 percentage point rise from March. Medium and longer-term expectations held steady. The data adds a layer of complexity to the Fed’s policy calculus ahead of its next rate decision.

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