NEW YORK, May 4, 2026, 18:02 (EDT)
U.S. stocks slid off their peaks Monday, with oil prices surging and fresh clashes near the Strait of Hormuz disrupting the momentum from strong earnings. The S&P 500 shed 0.4% to 7,200.75. The Dow Jones Industrial Average dropped 557.37 points, or 1.1%, to 48,941.90. The Nasdaq Composite gave up 0.2%, closing at 25,067.80.
Timing played a role. The S&P 500 and Nasdaq notched record closes Friday, so after that rally—driven by upbeat first-quarter earnings and ongoing AI hype—the market’s cushion for negative surprises was thin.
Oil pulled everything else with it. Brent crude surged 5.8%, settling at $114.44 per barrel—this after the United Arab Emirates reported what it said was the first Iranian strike since an early-April ceasefire.
The Strait of Hormuz—a thin corridor dividing Iran and Oman—handles close to 20% of global seaborne oil and gas flows. Reuters said Brent ended the session $6.27 higher, while U.S. West Texas Intermediate crude added $4.48, closing at $106.42 after assaults targeted ships and hit a UAE oil port.
“The market’s sitting right at record levels, so mistakes could get punished pretty quickly,” said Ross Mayfield, investment strategist at Baird Private Wealth Management, in comments to Reuters. He said the main risk still pointed lower, especially if conflict flares up again. Reuters
Two American-flagged merchant vessels made their way across the strait on Monday, according to the U.S. military, which also reported U.S. forces destroyed six small boats that had targeted civilian ships. The UAE Defense Ministry said it intercepted 15 missiles and four drones, all launched by Iran. In Fujairah, local authorities reported a drone attack ignited a fire at a major oil facility.
Oil prices climbed and bond yields moved higher. The 10-year Treasury yield—critical for everything from mortgages to corporate loans—hit 4.44%, up roughly 6 basis points. (A basis point equals one-hundredth of a percent.) When yields jump, stocks can come under pressure as borrowing gets pricier and bonds start to look better by comparison.
Pressure hit some pockets harder than others. Energy managed to post gains—the only S&P 500 sector in the green—while materials and industrials took the biggest hits, according to Reuters. Shares of FedEx slid 9.1% and UPS tumbled 10.5% after Amazon announced it will make “Amazon Supply Chain Services” available to other businesses, bringing its logistics arm into sharper competition with the two delivery giants. Reuters
Shares of GameStop dropped roughly 10% after the company put forward a cash-and-stock offer to acquire eBay in a deal worth around $56 billion. The proposal pegs eBay at $125 per share, marking a 20% premium over its Friday closing price. GameStop chief Ryan Cohen, talking to the Wall Street Journal as reported by Reuters, said the merger “could be a legit competitor to Amazon.” Reuters
Travel stocks felt fresh pressure from fuel. Norwegian Cruise Line trimmed its profit outlook for the year, pointing to increased fuel expenses tied to the Middle East conflict and weaker demand—especially on European routes. Carnival and Royal Caribbean have signaled they’re facing similar fuel-cost headwinds.
The market wasn’t without support. According to AP, profit growth is now spilling past the tech giants. Bank of America’s Savita Subramanian noted the median S&P 500 stock is heading for its strongest earnings growth since 2021. Tyson Foods shares climbed after the company topped Wall Street’s profit and revenue forecasts.
The risk is straightforward: Should U.S.-guarded shipping routes remain secure, cheaper oil might help stocks steady. But if attacks intensify or tankers get stuck, pricier fuel could stoke inflation and keep rates higher for longer. “The longer oil prices stay elevated above $100 a barrel,” Edward Jones investment strategy analyst Brock Weimer told Reuters, “the more the fiscal stimulus from the tax cuts passed in 2025 shifts from being a stimulus to acting as a shock absorber.” Reuters
