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Stocks tumbled at the open Thursday as oil prices resumed their uptrend after Iran’s new supreme leader, Mojtaba Khamenei, said the Strait of Hormuz, which sees roughly a fifth of global oil pass through it on a daily basis, will remain closed in order “to pressure” the United States.
Even after the International Energy Agency agreed on Wednesday to release 400 million barrels of oil from its emergency reserves, with the U.S. committing 172 million barrels from its Strategic Petroleum Reserve as part of the efforts, front-month crude futures jumped 9.7% today to settle at $95.73 per barrel.
Oil prices are now up 43% since the end of February. Meanwhile, the average national gas price is up more than 22% over the past month, according to AAA.
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Unsurprisingly, this is amplifying inflation concerns ahead of next week’s Federal Reserve meeting. The central bank is widely expected to keep the federal funds rate unchanged this time around, even amid signs of a slowdown in the labor market.
But worries that rising energy prices will lift inflation have futures traders anticipating the first rate cut of 2026 at the Fed’s October meeting, according to CME Group FedWatch. Just a few weeks ago, betting odds favored June.
Goldman Sachs weighs on the Dow, Dollar General drags on the S&P 500
At the close, the blue-chip Dow Jones Industrial Average was down 1.6% at 46,677, the broader S&P 500 was off 1.5% at 6,672, and the tech-heavy Nasdaq Composite was 1.8% lower at 22,311.
Goldman Sachs (GS) was the worst Dow Jones stock today, falling 4.4% amid broader financial sector weakness. At $787 per share, GS has the biggest impact on the price-weighted Dow.
As for S&P 500 stocks, Dollar General (DG) notched a notable decline, sinking 6.1% after the dollar store chain reported earnings.
While DG’s fourth-quarter results came in higher than expected, its full-year earnings-per-share forecast came up lighter than Wall Street had anticipated.
Ahead of the retailer’s earnings, Truist Securities analyst Scot Ciccarelli said internal card data indicated “a significant slowdown in growth from higher-income consumers in February,” possibly due to weather, “following material outperformance in calendar year 2025.”
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He admits that one month does not make a trend, “but the sizable drop in spending from the Top Quartile group in February needs to be monitored.”
KLA Corp. hikes its dividend by 21%
KLA Corp. (KLAC) hosted its annual investor day today, and the semiconductor equipment maker unveiled several shareholder-friendly initiatives.
In addition to unveiling a new $7 billion stock buyback program, KLAC hiked its quarterly dividend by 21% to $2.30 per share. The chip stock has a strong history of dependable dividend growth, having raised its payout for 17 straight years.
KLA also reiterated its fiscal 2026 third-quarter forecast, which came in below Wall Street’s expectations when the company first gave its guidance back in January.
Shares fell 3.8% today and are now down nearly 16% since January 29, but Oppenheimer analyst Edward Yang says this pullback represents “an opportunity” for investors.
“We believe KLA remains a must-own franchise, one of the highest-quality structural AI beneficiaries within a semicap supercycle with significant long-term upside,” Yang wrote in a March 11 note.
Petco pops 34% and Jefferies says “Buy”
Over in the small-cap space, Petco Health & Wellness (WOOF) jumped 34.6% after the pet health and wellness retailer disclosed earnings.
While WOOF reported a revenue decline for its fourth quarter, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped almost 11% to $106.3 million, well above the company’s outlook.
“The heavy lifting is behind us,” says Jefferies analyst Alex Wright, who upgraded the consumer discretionary stock to Buy from Hold after earnings. “Petco quickly went from urgent liquidity story, to cost management story, to now, a growth/ROIC story.”
Wright adds that the company enters its new fiscal year “headed towards growth with liquidity and profitability concerns now in the rearview mirror,” and the “breadth of initiatives planned do not rely on an improving macro and play to the retailer’s strengths, giving us confidence they can work.”
