Software cracks as the broader market finally cools

The lead this morning is the rotation inside tech, not another index record. The S&P 500 fell 0.41% to 7,108.40 on Thursday, April 23, the Nasdaq Composite dropped 0.89% to 24,438.50, and the Dow Jones Industrial Average lost 179.71 points, or 0.36%, to 49,310.32. Both the S&P and Nasdaq hit fresh intraday highs before fading, which tells you the market isn't breaking down so much as repricing leadership after a relentless run higher. CNBC tracked the reversal through the session, while an AP report via ABC News noted that Wall Street pulled back from record heights as earnings and geopolitics collided.

The actionable point is that this was a sector-led pullback, not a broad liquidation event. Energy strength and chip gains cushioned the tape, but software was hit hard enough to drag the major averages lower. That matters for traders because it suggests leadership is narrowing again, with investors rewarding hard-AI infrastructure and punishing application software names that can't prove pricing power or growth durability.

IBM and ServiceNow reset the software trade

The biggest stock story was the damage in enterprise software. IBM slumped 10.3% after reporting a slowdown in first-quarter revenue growth and keeping full-year guidance unchanged, while ServiceNow fell nearly 15% after saying Middle East deal delays hurt subscription revenue growth. Reuters said the results revived AI disruption fears across software and highlighted a sharper divide between winners and losers inside tech. Reuters via U.S. News

The spillover was immediate. Microsoft fell about 4%, Palantir dropped more than 7%, Oracle lost roughly 6%, and the iShares Expanded Tech-Software Sector ETF sank around 6%, according to CNBC. JPMorgan, quoted by Reuters, said investors remain jittery about how fast generative AI tools could pressure traditional software models. That's the market's message right now: semis are still the picks-and-shovels trade, but software has to re-earn the multiple.

On the other side of that divide, Texas Instruments jumped about 10% after giving a stronger outlook, helping lift analog chip peers and pushing the Philadelphia Semiconductor Index to a record, according to Reuters via U.S. News. Bloomberg also reported that Intel surged after hours on a strong outlook, adding to the sense that chipmakers remain the cleaner earnings story inside tech. Bloomberg

Oil above $105 keeps inflation and geopolitics in the market's face

Oil was back to driving macro sentiment. Brent crude settled above $105 a barrel on Thursday as traders reacted to renewed doubts around negotiations with Iran and rising concern over the security of the Strait of Hormuz. CNBC said the move accelerated after reports that Iran's parliament speaker had resigned from the negotiating team, while Reuters coverage cited a fragile ceasefire and a tense naval standoff as the backdrop for the latest spike. Reuters via U.S. News

That price action matters well beyond the energy complex. Higher crude tightens financial conditions, lifts inflation expectations, and complicates the Fed path just as markets were starting to price a friendlier policy backdrop. Charles Schwab noted that crude had climbed toward the mid-$90s even before the close and was up roughly $10 from last week's lows as hopes for a clean reopening of Hormuz faded. Charles Schwab

Gold remains part of that same geopolitical hedge. While price action was less dramatic than oil's, safe-haven demand has stayed in the mix as traders balance war risk against the possibility that stronger energy prices feed back into inflation. For macro desks, the key point is simple: if oil stays elevated, the market's soft-landing consensus gets harder to sustain.

Treasury yields stay firm as data cools rate-cut optimism

Treasury yields remained elevated after Thursday's data gave the economy a sturdier look than many traders expected. The U.S. Treasury's official closing curve for April 23 showed the 10-year yield at 4.31% and the 2-year at 3.78%, levels consistent with a market that still sees restrictive policy lasting a while. U.S. Treasury CNBC had flagged a similar move earlier in April, noting that renewed political pressure on Fed Chair Jerome Powell and sticky data were keeping yields biased higher. CNBC

The macro inputs on Thursday leaned hawkish at the margin. Trading Economics' calendar showed initial jobless claims at 214,000 versus a 212,000 consensus, but the bigger surprise came from S&P Global flash PMIs: manufacturing rose to 54.0 and services to 51.3, both above consensus. That combination points to continued expansion, not the kind of cooling that would force the Fed's hand. Trading Economics

For traders, that means the rates market is still vulnerable to another leg up in yields if growth stays firm and oil keeps climbing. Equities can handle higher yields when earnings are clean and breadth is improving. They struggle more when yields rise for the wrong reason, namely inflation risk tied to energy and geopolitics.

Crypto stalls as oil and inflation worries bite

Crypto hasn't broken down, but the easy risk-on narrative has faded. CoinDesk reported that Bitcoin's push toward $80,000 stalled as rising oil prices and fears of tighter financial conditions undermined bullish momentum. CoinDesk That fits the broader cross-asset picture: when crude jumps and yields stay high, speculative assets need a stronger catalyst than momentum alone.

Ethereum has been moving in the same macro lane. The trade here is less about crypto-specific news and more about whether traders view digital assets as a pure beta play or a hedge against policy and fiat instability. Right now, oil is the cleaner market signal. If energy risk eases, crypto can reaccelerate. If it doesn't, the path gets choppier.

Today's earnings and data could shift the tone again

Friday's session brings a fresh test from both earnings and macro. On the earnings side, traders are watching Procter & Gamble, Schlumberger, HCA Healthcare, Norfolk Southern, Charter Communications and Freeport-McMoRan among the notable reports on April 24. TipRanks Earnings Whispers SLB and Freeport are especially relevant because they give real-time reads on energy spending and industrial commodity demand.

On the data front, the University of Michigan's final April consumer sentiment reading is due at 10:00 a.m. Eastern. Trading Economics shows sentiment at 53.3 in the latest update, above the prior 47.6, while one-year inflation expectations eased to 3.8% from 4.8%. Trading Economics The University of Michigan's own survey summary also points to a consumer still worried about prices and weaker asset values. University of Michigan If inflation expectations keep coming down, that could steady duration and help growth stocks. If not, Thursday's software-led wobble may spread.

What to Watch Today

University of Michigan final April consumer sentiment at 10:00 a.m. ET, with special focus on one-year and five-year inflation expectations. Trading Economics
Oil headlines tied to Iran, the Strait of Hormuz, and any signs the ceasefire framework is strengthening or breaking down. CNBC
Earnings from Procter & Gamble, SLB, HCA Healthcare, Norfolk Southern, Charter and Freeport for read-throughs on consumer staples, energy capex, healthcare demand and industrial activity. TipRanks
Whether semis can keep outperforming software after Texas Instruments' upbeat outlook and Intel's after-hours strength. Reuters via U.S. News Bloomberg
The 10-year Treasury yield around 4.31%. If it pushes materially higher with oil still elevated, expect renewed pressure on long-duration growth trades. U.S. Treasury