NEW YORK, April 2, 2026, 13:09 (EDT)
U.S. stocks pared early losses by midday Thursday, with the Dow Jones Industrial Average down 0.3%, the S&P 500 slipping 0.18%, and the Nasdaq Composite falling 0.23%. Wall Street bounced off its session lows after indications emerged of some headway on reopening the Strait of Hormuz.
The timing is critical: investors are facing a Good Friday market closure just as oil prices rip higher and a U.S. jobs report looms. After a short-lived double-digit spike, U.S. crude stayed up more than 9%. Brent pushed close to $109, and American drivers are now paying over $4 a gallon for gas—stoking talk of stagflation, with plenty worried about the mix of rising prices and slowing growth.
Just a day before, sentiment had flipped the other way. The S&P 500 jumped 0.72%, the Nasdaq rallied 1.16%, and the Dow picked up 0.48% on Wednesday. Fresh optimism followed Trump’s comment that the United States would be “out of Iran pretty quickly,” sparking hopes for a fast resolution. “The markets want it to be positive, they want the war to be over,” said Thomas Martin, senior portfolio manager at Globalt Investments. Reuters
Hopes faded fast once Trump’s televised remarks signaled attacks could stretch for another two or three weeks. Some of the pressure let up after Iran announced it was collaborating with Oman on a shipping protocol, while Britain said roughly 40 countries were talking about steps to reopen Hormuz. “The prospect is softening today’s sell off,” said Kim Forrest, chief investment officer at Bokeh Capital Partners. The strait remains a crucial chokepoint, channeling about 20% of the world’s oil and liquefied natural gas shipments. Reuters
Oil’s move hit airlines hard. Shares of United Airlines, Delta Air Lines and American Airlines slid roughly 2% to 4% as fuel prices climbed. The S&P 500 energy index scraped out a 0.2% gain, but growth stocks kept struggling.
Losses swept across Asia. The Nikkei in Japan slid 2.4%, the Kospi in South Korea tumbled 4.7%. The dollar picked up ground as traders sought safety. “Trump’s speech pushes out the resolution timeframe farther,” said Mike Houlahan, director at Electus Financial. Reuters
Fresh U.S. numbers didn’t clear up the picture. Jobless claims slipped by 9,000 to 202,000, yet Reuters’ poll of economists still sees payrolls rising by just 60,000 in March, following February’s 92,000 loss. Oxford Economics’ lead U.S. economist Nancy Vanden Houten said she’s looking for “weaker job growth and a higher unemployment rate” this year, though the war’s impact on hiring could take longer to materialize. Reuters
There’s an obvious bull scenario here: shipping picks back up, crude prices ease, and some of Thursday’s losses snap back fast. Still, Matt Simpson, senior market analyst at StoneX, flagged the risk that oil could remain elevated “indefinitely” unless there’s a concrete reopening plan. Russel Chesler at VanEck noted the backdrop: investors are already facing weaker growth and stiffer inflation forecasts. Reuters
Wall Street’s focus stays locked on the Middle East. Despite a bounce on Wednesday, LSEG data shows the S&P 500 closed out 2026 down 4%. Still, major indexes are tracking toward their strongest weekly advance in four months.
