Dow, S&P 500 sink, Nasdaq enters correction territory as oil spikes amid Iran war

Stocks continued to drift lower on Thursday afternoon after President Trump stated that the current market turmoil isn’t as punishing as he expected.

“Frankly, I thought the oil prices would go up more, and I thought the stock market would go down more,” Trump said in a Cabinet meeting on Thursday. “[The market reaction] hasn’t been nearly as severe as I thought.”

In the meeting, Trump touted that the Dow surpassed 50,000 and that the S&P 500 hit 7,000 earlier this year.

But those milestones were extremely brief: The S&P never closed above the 7,000 intraday high, and the Dow spent just four days above its high-water mark.

Currently, the S&P 500 is trading about 6.5% off its intraday high of 7,002 reached in late January. It entered a pullback — a 5% drawdown from recent highs — two weeks ago and came closer to entering a correction — a 10% decline — last Friday. The Dow is trading 7.9% off its all-time closing high of 50,188.

Still, when Trump said Thursday that market pullback would be a “short-term hit” leading to higher stock prices in the future, history suggests he has a point.

Argus analysts pointed out in a note on Thursday (premium users can download it here) that pullbacks occur frequently, and the average time for the market to recover has been one month. For a correction, the analysts said, it may take four months — however, it depends on the market fundamentals at the time.

Although the Iran war clouds the market outlook in the near term, Argus expects oil prices and interest rates to fall once the conflict ends.

“Overall, we remain optimistic that stocks can post gains in 2026,” the analysts wrote, “though our base case outlook calls for single-digit returns, not the 15%-25% returns investors have enjoyed for the past three years.”