S&P 500 retreats on Middle East escalation

What happened: The S&P 500 retreated on April 24, 2026, driven by escalating geopolitical tensions in the Middle East, particularly around Iran. The index closed lower on Thursday, with the Nasdaq Composite, S&P 500, and Dow all ending in negative territory. Oil prices swung sharply due to blockades in the Strait of Hormuz. Meanwhile, Tesla (TSLA) reported strong Q1 earnings, beating EPS estimates by 14% and expanding automotive gross margin to 21%.

Market impact: The geopolitical tensions led to a broad-based sell-off, affecting sectors sensitive to oil prices and geopolitical risks. Energy stocks initially rallied on oil price increases but gave back gains later in the week. Tech stocks, including Tesla, outperformed despite the market volatility, as investors sought safety in growth-oriented names. The S&P 500 futures pulled back after Wednesday's record close, with the index holding onto the 7100 level.

What to watch next: Investors should closely monitor developments in the Middle East, particularly any escalation or de-escalation in tensions between Iran and the U.S. Upcoming earnings reports from major tech companies like Apple (AAPL) and Microsoft (MSFT) could also drive market sentiment. Additionally, investors should keep an eye on oil prices, as any significant movements could impact energy stocks and the broader market.