Thursday handed Wall Street one of the most volatile sessions of the year — and then took most of it back.
At their session lows, stocks were deep in the red. The Dow Jones Industrial Average had dropped as much as 608 points, or 1.3%, while the S&P 500 shed 1.3% and the Nasdaq pulled back 1.7%. Then an unexpected headline out of Tehran reversed the damage, and markets clawed all the way back to nearly flat.
By the closing bell, the Dow closed down just 61 points, or 0.13%, at 46,504.67. The S&P 500 eked out a gain of 0.11% to end at 6,582.69, and the Nasdaq added 0.18% to finish at 21,879.18. Small-cap stocks fared best on the day, with the Russell 2000 gaining 0.70% to close at 2,530.04.
The volatility had three main drivers: surging oil prices tied to the Iran conflict, a bruising Tesla delivery report, and fresh pharmaceutical tariff threats from the White House.
Oil Surged, Then Pulled Back — Here’s Why It Matters
The day’s chaos started in the energy market. West Texas Intermediate crude jumped 12% to $112.10 per barrel, while Brent crude rose 7.81% to $109.10 per barrel — a sharp spike that sent travel stocks, airlines, and consumer discretionary names into a tailspin.
The catalyst was President Trump’s Wednesday night address. Trump said the U.S. is “getting very close” to ending the conflict but added that over the next two to three weeks, the U.S. would take aggressive action. Markets heard that and sold first.
“Investors spent two days celebrating a rally triggered by Trump’s comments that the Iran situation would end soon,” said TheStreet Pro contributor James “Rev Shark” DePorre. “There was high hope that the corrective action had ended and that steady improvement was ahead.”
That hope cracked Thursday morning.
Daniela Hathorn, senior market analyst at Capital.com, said price action suggests escalation rather than de-escalation, and that Trump’s tone was more consistent with a war rally than a wind-down. She added that renewed threats to Iranian energy infrastructure shifted the narrative squarely back toward rising geopolitical risk.
The recovery came mid-afternoon. The three major indexes ripped higher from their steep session losses after Iranian state media reported that Tehran is working with Oman on a protocol to monitor ships passing through the Strait of Hormuz. That signal — however tentative — was enough to push equities into positive territory, at least briefly.
The Strait matters beyond oil. “It’s pivotal for the United States that the Strait is reopened, not so much because of oil but because of helium,” said Todd Schoenberger, chief investment officer — a detail most coverage ignored but one that speaks to how deep the supply chain stakes run.
Tesla Fell 5.4% — Its Worst Day of 2026
While the broader market recovered, Tesla had no such luck.
Tesla closed Thursday at $360.56, down 5.43%, after investors reacted to weaker-than-expected first-quarter delivery figures. That makes it the stock’s worst single-session drop of the year, and it happened on a day when the S&P 500 actually closed green.
The headline number sounds passable at first. Tesla shipped 358,023 vehicles, up 6% on an annual basis— but that comparison flatters. Q1 2025 was one of Tesla’s weakest quarters on record because the company halted Model Y production across all four factories to transition to the refreshed Juniper model. Beating a badly sandbagged period by just 6% isn’t growth. It’s treading water.
Analysts were expecting 370,000 deliveries, according to StreetAccount, while Tesla’s own compiled consensus projected 365,645.The company missed both.
The inventory build is what really alarmed analysts. Tesla produced 408,386 vehicles and delivered 358,023, leaving 50,363 units unsold — almost entirely in the Model 3/Y category, where production of 394,611 outpaced deliveries of 341,893 by nearly 53,000 units. A company that built its reputation on tight build-to-order discipline is now sitting on one of the largest single-quarter inventory piles in its history. That’s a demand problem, not a logistics one.
Then came the energy storage miss, which was arguably worse. Tesla deployed just 8.8 GWh of energy storage products in Q1 — a 38% drop from Q4 2025’s record 14.2 GWh and far below the analyst consensus of 14.4 GWh. Energy storage had been Tesla’s one reliable growth story while the vehicle business stalled. Losing that narrative removes a key pillar for bulls.
Tesla has now reported two consecutive years of declining annual deliveries, dropping from a peak of 1.81 million in 2023 to 1.64 million in 2025. The full-year 2026 consensus projects 1.69 million vehicles — but at Q1’s annualized pace, Tesla would need to average over 444,000 deliveries per quarter for the rest of the year , a pace it hasn’t consistently hit since 2023.
William Blair analysts said they weren’t surprised by the automotive numbers because “global EV demand ex-China remains under pressure.” The more troubling story, they flagged, was the energy segment deterioration.
Full Q1 earnings land April 22.
Tariff Headlines Hit Pharma — and Eased on Steel
Markets also absorbed a late-day flurry of tariff announcements from the White House.
Drugmakers will face a 100% tariff unless they cut prices or produce drugs domestically — making good on a threat the Trump Administration had signaled months earlier. That sent healthcare stocks lower. Eli Lilly, which had climbed nearly 4% on Wednesday after FDA approval of its weight-loss pill, fell about 1% in early trading Thursday.
On the other hand, tariffs on steel, aluminum, and copper derivatives declined to 25%. The Wall Street Journal had telegraphed the change the day prior, framing it as a compliance simplification — though the net effect still raises import costs for manufacturers.
Sector Snapshot: What Won and What Didn’t
Real estate, tech, and utilities helped lift the broader market despite steep declines in discretionary and health care stocks.
Tech held up reasonably well. Nvidia, Microsoft, and AMD each gained between 1% and 3% as investors rotated into names with less direct exposure to oil prices and tariff uncertainty.
Memory chips had a rougher go. Micron, Western Digital, and SanDisk — which had posted gains of 9% or better the previous session — each fell more than 5% in early trade as the relief rally faded.
Travel took a direct hit from rising fuel costs, with airlines and cruise operators under pressure. Blue Owl Capital slid after it capped private credit redemptions at 5% following unusually high withdrawal requests — 40.7% in one fund and 21.9% in its largest — during the first quarter.
One bright spot: Globalstar jumped 13% on a report that Amazon may pursue an acquisition.
The Week in Context: Liberation Day’s One-Year Anniversary
April 2 marked the one-year anniversary of “Liberation Day,” when President Trump unveiled his large-format tariff cards in the Rose Garden displaying elevated tariff rates on nations worldwide. A lot has happened since.
Despite Thursday’s turbulence, the major averages posted solid weekly gains. The S&P 500 advanced 3.4% week to date, the Dow rose nearly 3%, and the Nasdaq outperformed with a 4.4% gain.
FactSet’s updated first-quarter projections peg S&P 500 earnings growth at 13%. That’s a number bulls are holding onto tightly as geopolitical headlines continue to whipsaw sentiment.
Markets are closed Friday for Good Friday. But that doesn’t mean investors get a quiet end to the week.
The March jobs report drops Friday morning, and given the week’s volatile trading, we could see elevated volatility as investors assess how much risk they want to hold over a long weekend.
The March ISM Manufacturing PMI raised inflation concerns, with manufacturing prices paid surging to a new cycle high, according to Kevin Gordon at the Schwab Center for Financial Research. That data point, combined with persistent oil pressure, keeps the Fed in a tough spot heading into its next meeting.
The Bottom Line
Thursday was a microcosm of this market: violence in both directions, driven by headlines more than fundamentals. The indexes finished nearly flat, but the underlying tension hasn’t gone anywhere.
Three things are worth tracking closely right now: the Strait of Hormuz situation and what it does to energy prices, Tesla’s April 22 earnings call where Elon Musk will have to explain the inventory build and the energy storage miss, and whether pharmaceutical tariffs actually move forward or get softened in negotiations.
If you’re holding energy stocks, the risk premium just got very real. If you’re in tech, the resilience Thursday was encouraging — but this market can turn on a single headline. Keep position sizing honest, and don’t let a week of gains convince you that the volatility has resolved.
