Global stocks mostly fell on Thursday, reversing recent gains as investors tempered hopes for a quick resolution to the Middle East conflict. The benchmark Brent crude oil price climbed above $100 per barrel, rekindling fears of sustained inflation that could weigh on economic growth worldwide.
Wall Street's main indexes closed lower after a volatile session, joining declines in most European and Asian markets. The downturn came as US-Iran peace talks appeared to stall, with Tehran vowing not to reopen the strategic Strait of Hormuz—through which about one-fifth of global oil is shipped—as long as the US maintains a blockade on its ports.
"There's still a tug of war between fundamentals—earnings that have been better than expected—and the fact that news from the Strait of Hormuz hasn't become more constructive," said Art Hogan of B. Riley Wealth Management.
While equity markets have largely recovered from the sharp losses triggered by US and Israeli strikes on Iran in late February, analysts caution that a prolonged conflict could quickly undermine confidence. Solid first-quarter corporate earnings and sustained enthusiasm for artificial intelligence have provided support, but rising energy costs remain a headwind.
In the eurozone, business activity contracted for the first time in 16 months in April, according to S&P Global's Flash Eurozone PMI. The survey showed that the Middle East war is driving up energy prices and disrupting supply chains. "The conflict has pushed the economy into decline in April, while driving inflation sharply higher," said Chris Williamson, chief business economist at S&P Global.
Despite the regional downturn, France's CAC 40 managed a slight gain, boosted by cosmetics giant L'Oreal, whose shares surged after reporting a 3.6% rise in sales driven by growth in professional and dermatological products.
In corporate news, Meta plans to cut about 8,000 jobs—a tenth of its workforce—and leave thousands of other positions unfilled next month, according to a source. Its shares fell 2.3%. Tesla dropped 3.6% and Lockheed Martin fell 4.7%, while American Airlines jumped 2.4%.