Key Takeaways
- Major U.S. indices closed lower as geopolitical instability in the Middle East weighed on sentiment, with the Dow falling 0.61% and the S&P 500 dropping 0.37%.
- Airbnb (ABNB) and Gilead Sciences (GILD) both exceeded Q1 expectations, though Gilead warned of a 2026 loss due to massive R&D charges.
- CoreWeave (CRWV) reported record bookings and a revenue beat of $2.08 billion, but its $740 million net loss was wider than analysts anticipated.
- Geopolitical tensions spiked following reports that the U.S. Army intercepted an Iranian oil tanker, leading to retaliatory missile fire and drone activity in the Strait of Hormuz.
- Fed’s John Williams reaffirmed a "full commitment" to the 2% inflation target, noting that while the economy is resilient, it faces high levels of uncertainty.
Markets Slide as Geopolitical Risks Escalate
U.S. equity markets finished the session in the red on Thursday as investors reacted to a sharp escalation of tensions in the Middle East. The Dow Jones Industrial Average dropped 305.68 points (0.61%) to close at 49,604.91, while the S&P 500 fell 27.25 points (0.37%) to 7,337.87. The Nasdaq Composite saw a more modest decline of 0.16%, ending the day at 25,796.93.
Market anxiety centered on the Strait of Hormuz, where Iranian state media reported that the U.S. Army intercepted an Iranian oil tanker. This event was followed by reports of missile fire targeting "enemy units" and the activation of Iranian air defenses to destroy "hostile drones" near Bandar Abbas and Qeshm. The potential for a broader conflict in the critical energy corridor remains a primary concern for global markets.
Airbnb and Gilead Beat Estimates; CoreWeave Loss Widens
Airbnb (ABNB) reported strong Q1 results, posting revenue of $2.68 billion, which beat the $2.62 billion estimate. The travel giant saw 156.2 million nights and stays booked, driving a Gross Booking Value of $29.2 billion. The results suggest continued resilience in consumer travel spending despite broader economic pressures.
Gilead Sciences (GILD) also topped expectations with adjusted EPS of $2.03 on $6.96 billion in revenue. While its flagship HIV drug Biktarvy generated $3.36 billion, the company signaled a future headwind, projecting a 2026 loss due to $11.5 billion in IPR&D charges and deal-related costs.
Specialized cloud provider CoreWeave (CRWV) reported its strongest bookings quarter in history, with Q1 revenue of $2.08 billion beating the $1.97 billion forecast. However, the company’s net loss of $740 million ($1.40 per share) was deeper than the $628.2 million loss expected by the street. Adjusted EBITDA for the quarter came in at $1.16 billion, slightly ahead of estimates.
Fed’s Williams Reaffirms Inflation Commitment
New York Fed President John Williams spoke on Thursday, emphasizing the central bank's unwavering goal of restoring inflation to 2%. Williams noted that the U.S. economy has remained remarkably resilient with a stable labor market, though he acknowledged that lower-income groups are facing increasing financial stress.
Williams characterized current interest rates as remaining within historical norms and highlighted that the economy performed better in the previous year than many forecasts had predicted. However, he cautioned that the outlook remains clouded by "high levels of uncertainty," suggesting the Fed will remain data-dependent in its upcoming policy decisions.
Industry and Crypto Developments
In the automotive sector, major manufacturers are reportedly pushing for an extension of the USMCA agreement, according to a letter sent to regulators. The industry is seeking stability across the U.S., Mexico, and Canada trade bloc to manage supply chain and manufacturing transitions.
Separately, in the digital asset space, Coinbase informed users that transfers for ALEO may be delayed for some customers. No specific timeline for a resolution was provided, as the exchange continues to monitor the network's performance.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.