Stock market today: Dow, S&P 500, Nasdaq retreat after rally as Iran war drags on

Software stocks sold off on Tuesday as Anthropic (ANTH.PVT) announced a new capability for Claude Cowork and Claude Code that revived concerns about artificial intelligence disrupting software-as-a-service (SaaS) firms’ business models.

Anthropic’s new capability allows Claude to control your computer to complete tasks and make increasingly advanced AI agents.

The iShares Expanded Tech-Software Sector ETF (IGV) declined 3.5% in late morning trading, led by a 5% drop in Palantir (PLTR) and 4% slide in Salesforce (CRM) stock.

Other software names, including Oracle (ORCL), Palo Alto Networks (PANW), Snowflake (SNOW), Shopify (SHOP), Intuit (INTU), and ServiceNow (NOW), were under pressure amid signs that the AI scare trade is still here and investors are looking for proof that software stocks can make a fresh start.

There’s a bright spot in Tesla’s (TSLA) core auto sales, with a slight reversal of fortune in greater Europe.

According to the European Automobile Manufacturers’ Association (ACEA), Tesla electric vehicle registrations (a proxy for sales) in Europe rose to 17,664 units in February, an 11.8% gain compared to a year ago. In January, sales dipped 17%, the last month of a losing streak that had been ongoing since December 2024.

While this February saw a sales jump, it came against a weak February in 2025. Last year, Tesla’s European sales tumbled 27%.

Tesla’s recent losing streak occurred against the backdrop of rising EV sales in the greater Europe region. Total EV registrations in the region, which includes the UK and the European Free Trade Association, rose 15.8% in February, with overall registrations regardless of powertrain up only 1.7%.

While EV sales have slumped somewhat in the US, cheap EVs and hybrids are flourishing in the EU, especially from Chinese automakers like BYD and Li Auto, as buyers across the pond embrace Asian imports.

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Oil prices, up 44% over the past month, are likely to remain a market driver in the near term, according to Citi analysts, even as President Trump pulled back on Monday on his threat that the US would strike Iran’s power infrastructure.

Yahoo Finance’s Brian Sozzi writes:

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Stocks retreated at the open on Tuesday as the hostilities in the Middle East continued despite hopes that an off-ramp was materializing at the beginning of the week.

The Dow Jones Industrial Average (^DJI) declined 0.8%, while the S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) fell 0.5%.

Oil resumed its climb higher. West Texas Intermediate (CL=F) crude rose to $92 a barrel, while Brent (BZ=F) topped $103. Gold (GC=F), meanwhile, fell to $4,374 an ounce.

The 10-year Treasury yield (^TNX) also advanced by 7 basis points to 4.40%, hovering around its highest level since July of 2025.

It’s a quiet week for economic data and earnings reports. A preliminary reading of S&P Global’s US manufacturing PMI is due out later this morning, and GameStop (GME) reports quarterly results after the bell.

The memory and storage trade has remained strong despite a volatile start to the year.

Bloomberg reports:

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Major tech companies had major ambitions to build data centers in the Middle East. But now, the war in the region is complicating that picture.

On Monday, Amazon Web Services said its ‌region in Bahrain has been “disrupted” due to drone ​activity in the Middle East.

This marks the second time since the outbreak of war in Iran that Amazon’s (AMZN) AWS was down in the Bahrain region due to fighting. At the beginning of the month, Iran targeted AWS facilities in the UAE and Bahrain, raising questions about Big Tech’s plans to make the Middle East a regional hub.

According to Constellation Energy Corp. CEO Joe Dominguez, now, the tensions in the region are shifting the focus back to the US.

“One month ago, we would have said there’s going to be a fairly significant data center build-out in the Middle East,” Dominguez said during the CERAWeek, according to S&P Global. “Today, we wake up, and there’s a question mark as to whether more critical infrastructure is going to be built in that region of the world.”

Smithfield Foods’ (SFD) stock rose 4% before the bell on Tuesday following the board’s raising of the pork producer’s quarterly dividend by 25%, to 31.25 cents from 25 cents.

Gilead Sciences (GILD) stock edged higher on Tuesday during premarket hours after it agreed to acquire the privately held biotech Ouro Medicines.

Apollo Global Management (APO) shares fell 2% after a private credit fund capped withdrawals at 5%.

Jefferies Financial Group’s (JEF) stock rose 9% before the bell on Tuesday following news that Japan’s second-largest lender, Sumitomo Mitsui Financial Group, (SMFG) is working on plans for a possible takeover of Jefferies.

The FT reports:

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Estée Lauder (EL) announced on Tuesday its plan to acquire the Spanish beauty group Puig Brand (B1B.F), according to reports in the Wall Street Journal. Puig Frankfurt listed shares rose 8% before the bell today following the news.

The Wall Street Journal reports:

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Yahoo Finance’s senior reporter Jennifer Schonberger reports:

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Bloomberg reports:

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Bloomberg reports:

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