S&P 500 and Nasdaq Hit Record Highs, Then Promptly Forgot About It
Key Points
The S&P 500 and Nasdaq-100 both hit fresh all-time intraday highs before reversing into the red by early afternoon.
Oil prices rebounded after trading lower in the morning, rekindling inflation concerns and pressuring stocks.
Long-term investors are better served staying diversified than reacting to daily swings driven by geopolitical headlines.
- 10 stocks we like better than S&P 500 Index ›
Well, that escalated quickly.
This morning started with champagne-popping vibes as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq-100 indexes both touched fresh all-time highs. The Dow Jones Industrial Average (DJINDICES: ^DJI) lagged behind, but it did start Thursday morning's action on a mildly bullish note.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
By early afternoon, the party was over, and all three major indexes were firmly in the red.
^NDX data by YCharts
As of 1:45 p.m. EDT, the Dow is having the roughest day of the bunch, down 0.8%. The other top names are bundled near the 0.4% drop line.
Why the rally ran out of gas (literally)
So what happened? In a word: oil.
Crude prices bounced back after trading lower earlier in the morning session. The move higher in energy prices rekindled inflation concerns that have kept central banks, including the U.S. Federal Reserve, on hold recently.
The U.S.-Iran situation isn't helping. Earlier this week, reports suggested the two countries were close to a peace deal, and markets loved it. But Iran still hasn't officially responded to the U.S. proposal, and traders are treating every headline like a jump scare in a horror movie. Oil tanker traffic is still a no-no in the crucial Strait of Hormuz, and Iran has announced new rules for using that shipping lane.
Image source: Getty Images.
Until there's real clarity in the Persian Gulf, expect oil prices to keep jerking around, and stock indexes to follow suit.
On the individual stock front, Caterpillar (NYSE: CAT) and Goldman Sachs (NYSE: GS) are doing most of the damage to the Dow, falling 3.4% and 1.5% respectively. There's no company-specific news to explain these moves, and both stocks are roughly back where they were a week ago. I would call it profit-taking especially for Caterpillar, which is trading near all-time highs even after today's minor retreat.
Because the Dow is price-weighted (yes, it's an old and weird system), these two high-priced stocks can move the index more than most.
On the Nasdaq-100 and S&P 500 indexes, most of the negative action comes from a broad range of small moves. The largest needle-mover in both cases is Nvidia (NASDAQ: NVDA), which is up by 2% on CEO comments and technical trading milestones. Those catalysts aren't exactly paragons of fundamental strength.
Putting Thursday's moves in perspective
For long-term investors, days like this serve as a reminder that volatility is the price of admission for equity returns.
The S&P 500 reached new highs for a reason; corporate earnings have been strong, and demand for AI-related infrastructure remains robust. The news out of Iran has also been more promising than it was in April.
But with inflation concerns keeping the Fed on the sidelines and Middle East tensions adding daily drama, there will almost certainly be more volatility in the coming weeks.
The best strategy? Zoom out, stay diversified, and resist the urge to refresh your portfolio every five minutes. Your blood pressure will thank you.
Should you buy stock in S&P 500 Index right now?
Before you buy stock in S&P 500 Index, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $476,034!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,274,109!*
Now, it’s worth noting Stock Advisor’s total average return is 974% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of May 7, 2026.
Anders Bylund has positions in Nvidia. The Motley Fool has positions in and recommends Caterpillar, Goldman Sachs Group, and Nvidia. The Motley Fool has a disclosure policy.
Recommended Articles
