Wall Street closed at record highs Wednesday as President Donald Trump extended the U.S. ceasefire with Iran indefinitely, lifting investor confidence after a turbulent stretch of geopolitical anxiety. The rally gave way Thursday morning, however, with Dow futures dropping 281 points in pre-market trading as oil prices climbed and fresh details emerged about Iranian naval seizures in the Strait of Hormuz.
Wednesday’s session had been one for the books. The Dow industrials rose 341 points, while the Nasdaq Composite gained 1.27 percent and the S&P 500 climbed 0.86 percent — the fourth record close for both indexes within six sessions. The advance came after Trump posted on Truth Social that the U.S. would extend the ceasefire following a request from Pakistani mediators, saying Iran’s government was seriously fractured. The move reversed the prior session’s losses, when the Dow had fallen 293 points on news that a second round of peace talks had stalled.
The ceasefire extension eased the most acute fears, but oil prices remained stubbornly elevated near $100 a barrel because the U.S. naval blockade of the Strait of Hormuz remains in effect. Reports that Iran’s Revolutionary Guard seized at least three oil tankers Thursday sent crude higher and weighed on futures, illustrating how quickly market relief can turn to renewed caution.
Amid the geopolitical noise, a wave of corporate earnings dominated individual stock movement. Tesla’s first-quarter earnings release showed adjusted earnings per share of $0.41, topping analyst expectations of $0.36, on revenue of $22.38 billion — a 16 percent increase year over year. Gross margin jumped to 21.1 percent, up nearly five percentage points from a year earlier. Yet Tesla shares slid about 3 percent in Thursday pre-market trading after CEO Elon Musk warned during the earnings call of a sharp increase in capital spending, with the company now projecting full-year capital expenditures exceeding $25 billion. Musk said older vehicles running on Hardware 3 computers do not have the capability to support unsupervised Full Self-Driving, a disclosure that unsettled some owners of those vehicles. He also said robotaxi revenue would not be material this year, though the service is expected to contribute substantially beginning next year.
IBM’s first-quarter earnings release showed revenue of $15.9 billion, up 9 percent year over year, with adjusted earnings per share of $1.91 — beating the analyst consensus of $1.81. Software revenue rose 11 percent and infrastructure revenue climbed 15 percent. Despite the beat, IBM shares fell roughly 8 percent in after-hours and pre-market trading because the company held its full-year outlook steady, projecting more than 5 percent constant-currency revenue growth and an increase of approximately $1 billion in free cash flow, a guidance stance that left some investors wanting more.
ServiceNow’s first-quarter earnings release showed subscription revenue of $3.67 billion, up 22 percent year over year, and the company raised its full-year subscription revenue outlook to a range of $15.74 billion to $15.78 billion. Shares nonetheless fell more than 13 percent before Thursday’s open after the company attributed a roughly 75 basis-point headwind to first-quarter subscription growth to deal delays caused by the ongoing Middle East conflict.
Sonoco Products’ guidance release showed full-year adjusted earnings per share are expected to come in at the lower end of the prior range of $5.80 to $6.20 per diluted share. First-quarter net income rose to $67.6 million from $54.4 million a year earlier, but revenue fell short of expectations. ScanSource, the Greenville-based technology products distributor, confirmed via its earnings calendar filing that it will announce fiscal third-quarter results on May 7, with a conference call at 10:30 a.m. Eastern.
For South Carolina’s business community, the week’s market swings carry tangible weight. Rep. William Timmons, whose SC-4 district covers Greenville and Spartanburg, sits on the House Financial Services Committee, which oversees capital markets regulation. The committee’s work on trade and financial stability is directly relevant as Upstate manufacturers — including BMW Manufacturing in Spartanburg County and Michelin’s North American headquarters in Greenville — navigate oil-price volatility that feeds into transportation and raw-material costs. Elevated crude prices tied to the Hormuz blockade add a layer of uncertainty to the supply chains those operations depend on.
The Federal Reserve’s next policy meeting is scheduled for next week, and futures markets are pricing in a near-certainty that interest rates will remain unchanged. The combination of a fragile ceasefire, elevated oil, and a solid but mixed earnings season is expected to keep volatility elevated until more clarity emerges on the Iran situation.
