U.S. stocks fell on Thursday, sharply paring the S&P 500’s 2026 gains, as investors turned away from financials and monitored tensions between the U.S. and Iran.
The Dow Jones Industrial Average lost 267 points, or 0.5%. The broad S&P 500 fell 0.3%, as did the Nasdaq Composite. With today’s move, the S&P 500 was up 0.2% for the year, while the Dow, which includes 30 stocks, was higher by more than 2%. However, the tech-forward Nasdaq is down more than 2% in 2026.
Investors retreated from private credit stocks after private markets and alternative asset manager Blue Owl Capital announced it would tighten investor liquidity following the sale of $1.4 billion in credit assets, sparking concern among investors about losses in the murky private credit space. That stock fell 6%, while others, such as Blackstone and Apollo Global Management, fell 5%.
Along with asset managers, software was another area under pressure. Shares of Salesforce fell more than 1%, while shares of Intuit fell more than 2%. Cadence Design Systems shares fell nearly 3%.
The group has recently become a sore point in the market as investors fear artificial intelligence will disrupt the industry. In fact, Mistral AI CEO Arthur Mensch told CNBC on Wednesday that more than 50% of enterprise software could be replaced with this technology.
Wall Streeters remained cautious as crude oil prices continued to rise amid a standoff between Iran and the US over Iran’s nuclear program, SEEbiz reports. President Donald Trump said Thursday that he will decide within the next 10 days whether to launch military strikes against the Middle Eastern country.
“So now we may have to go a step further, or we may not,” the president said during the first meeting of the Peace Committee. “We may be able to reach an agreement. You’ll know in the next 10 days, probably.”
Adding to the negative sentiment Thursday, Walmart shares fell more than 1% after the company’s full-year earnings outlook fell short of expectations. That eclipsed better-than-expected results for the fourth quarter.
Recent market movements are “confirmation of a change in leadership,” said Antonio Rodrigues, chief investment officer at Procyon. “We need to see earnings momentum starting to come from the 490 lower-quoted names,” he added.
Rodrigues is specifically looking at industrial as well as consumer cyclical markets, two areas he believes could “see some efficiency on the AI spending side.”
