Dow, S&P 500, Nasdaq: From Morning Meltdown to Midday "Meh"

Stocks on the U.S. markets opened lower on Thursday, April 2, 2026, before recovering to near breakeven by midday. Investors digested conflicting signals from the ongoing Iran conflict and a disappointing March delivery report from Tesla (NASDAQ: TSLA).

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The Dow Jones Industrial Average (DJINDICES: ^DJI) spent most of the morning looking for direction and ultimately didn't find much. No big winners, no big losers among its 30 components, with the largest points-mover generated by a 1.5% price drop in Caterpillar.

The S&P 500 (SNPINDEX: ^GSPC) had a rougher go of it, dragged down by Tesla's 5%-plus tumble. The Nasdaq Composite (NASDAQINDEX: ^IXIC) followed suit for the same reason, bouncing back from a larger drop in the morning to a 0.1% drawdown as of 1:45 p.m. ET.

Image source: Getty Images.

Key catalysts behind a choppy trading session

Crude oil prices shot up about 10% on Thursday. President Trump's televised speech on Wednesday evening raised more questions than it answered about the war with Iran, leaving investors nervous about the oil price trajectory. The Strait of Hormuz waterway between Iran and the United Arab Emirates handles roughly one-fifth of global oil supply, and its disruption has pushed energy costs sharply higher in recent weeks.

Reports surfaced mid-morning that Iran and Oman are working on a protocol to get some traffic flowing through the strait again. Market makers liked that idea, and stocks clawed their way up from the morning's lows. But it wasn't enough to inspire a broad surge, since there's no clear path to ending the conflict and restoring the normal flow of oil shipments.

Meanwhile, Tesla had a rough morning. The EV maker reported first-quarter deliveries of 358,023 vehicles, which sounds like a lot until you realize Wall Street was expecting closer to 366,000. The company's energy storage segment, which had been showing rapid growth, also disappointed investors.

And the Trump administration is reportedly cooking up tariffs of up to 100% on some imported pharmaceuticals. Healthcare stocks took notice, with sector giants such as Eli Lilly and Amgen down by about 2%.

The bigger picture

All three major indexes took a morning punch, got back up, and are now standing around looking slightly dazed but mostly OK. It's not a victory lap, but it's not a disaster either.

The bigger story here is uncertainty. Oil prices are elevated, mortgage rates have risen for five straight weeks, and analysts are dusting off the uncomfortable term "stagflation."

For long-term investors, days like today are a good reminder that volatility is part of the deal. Thursday morning's big drop followed Wednesday's big jump. There's no clear bull or bear market going on these days, though the uncertainty adds an uncomfortable vibe.

Until there's clarity on the Strait of Hormuz and oil prices settle down, you should expect more days like this. Wall Street will duck on some days and jump on others. Keep your time horizon long, your diversification broad, and your news notifications on "silent." Refreshing your portfolio view every five minutes could be bad news for your sleeping habits and antacid budget.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen, Caterpillar, and Tesla. The Motley Fool has a disclosure policy.