Stocks sunk lower on Thursday as rising oil prices and the latest developments from the United States-Israeli war with Iran impacted investor sentiment.
The Dow Jones Industrial Average (NYSE: DIA) fell nearly 785 points to settle at 47,954.74 on Thursday, while the broader market S&P 500 Index (NYSE: SPY) lost about 0.6% and tech-heavy Nasdaq Composite (NASDAQ: QQQ) dipped 0.3% to end the session at 6,830.71 and 22,748.99, respectively.
Harming economic growth outlooks, U.S. crude oil prices rose to their highest level since June 2025 on Thursday after Iran announced it had fired a missile at an oil tanker. U.S. benchmark West Texas Intermediate (NYSE: USO) crude futures jumped to trade above $80 per barrel, while international benchmark Brent (NYSE: BNO) crude futures rose to more than $85 per barrel.
War escalation concerns also weighed on sentiment on Thursday after U.S. War Secretary Pete Hegseth told reporters during a press briefing that the U.S. is "winning decisively" against Iran and is "accelerating, not decelerating," its actions in the region. Earlier in the week, President Donald Trump said the U.S. will support oil tankers in the Persian Gulf to ensure that oil can move through the Strait of Hormuz.
On the earnings front, Broadcom (NASDAQ: AVGO) posted better-than-expected earnings late Wednesday and issued a positive revenue outlook for its current quarter as the company continues to benefit from the expanding artificial intelligence industry.
The company's AI revenue popped 106% annually to $8.4 billion "driven by robust demand for customer AI accelerators and AI networking," CEO Hock Tan said in a statement. Broadcom's technology supports chipmakers such as Taiwan Semiconductor Manufacturing Company (NYSE: TSM) and have come into focus as tech giants like Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG) (NASDAQ: GOOGL), Meta Platforms (NASDAQ: META) and Microsoft (NASDAQ: MSFT) each design their own custom chips.
"We have line of sight to achieve AI revenue from chips, just chips, in excess of $100 billion in 2027," Tan told analysts during the company's earnings call. Broadcom forecasts for $22 billion in revenue for its current quarter.
Elsewhere, planned layoffs declinedand hiring rose in February, outplacement and coaching firm Challenger, Gray & Christmas reported Thursday, supporting recent labor market trends.
The firm's monthly report found U.S. employers announced 48,307 layoffs during the month, a 55% decline from January, with technology accounting for the majority of cuts with a 51% annual increase. Employers surveyed said AI accounted for 10% of those reductions in staff. Meanwhile, hiring plans rose 140% from January.
"February's dip is a nice reprieve from the elevated job cut plans to start the year," said Andy Challenger, chief revenue officer for Challenger, Gray & Christmas, in a statement, adding that still, "with U.S. involvement in a growing war in Iran, the end of Q1 may bring more layoff plans as companies tighten belts amid uncertainty and higher costs."
Looking ahead, market participants are gearing up for a busy day for economic reports on Friday, with February's monthly employment report and January's delayed U.S. retail sales reading both due out in the morning.