The Nasdaq Composite fell 2.38% to 21,408.08 — entering correction territory — as a pair of company-specific tech shocks compounded overnight news that Iran had formally rejected Washington's peace framework, pushing the conflict to its highest-risk phase since it began. ^[2] The S&P 500 dropped 1.74% to 6,477.16, the Dow shed 469 points (–1.01%) to 45,960.11, and the Russell 2000 declined 1.70% to 2,493.32. Wednesday's Iran-driven relief rally was entirely erased. ^[1]

What moved it

The geopolitical backdrop deteriorated overnight: Iranian Foreign Minister Araghchi formally rejected Washington's 15-point peace framework, calling it "unrealistic," and Trump issued a "final blow" warning. ^[5] But the session's index-level damage was led by two company-specific catalysts.

Meta fell 8% on back-to-back legal verdicts (detailed below), and Google Research released TurboQuant, a memory-compression algorithm that reduces LLM inference memory requirements by 6x with no measurable accuracy loss — cratering memory chip stocks across the sector. ^[4] The combined effect on the Nasdaq was amplified by already-elevated selling pressure from the geopolitical backdrop.

The 10-year yield rose 8.8 bps to 4.416%, reflecting the re-emergence of higher-for-longer probability. The Fed held rates at 3.50%–3.75% at its March meeting; futures now price just one to two cuts in Q4, down from four or five priced at the start of the year. ^[6] WTI crude fell 5.09% despite the escalation — demand-destruction concerns are now competing with the supply-shock trade. The VIX closed at 27.44, up 8.33%.

Sector scoreboard

Energy (XLE) was the session's sole gainer — up roughly 3–4% — as oil producers and defense-adjacent names benefited from the Iran escalation trade. Healthcare (XLV) and real estate (XLRE) held up on a relative basis.

Technology (XLK) was the clear laggard, extending its one-month decline to approximately –4.4%. Communication services (XLC) fell hard alongside Meta and Alphabet. Financials (XLF), industrials (XLI), and consumer discretionary (XLY) all declined. Breadth was broadly negative — the NYSE and Nasdaq advance-decline lines both moved lower — consistent with risk-off selling rather than a rotation.

Movers

Meta Platforms (META): –8.00% to $547.32. Two courtroom defeats hit the same day. A Los Angeles jury found Meta negligent in a bellwether social media addiction trial — a verdict that serves as a template for approximately 2,000 pending suits from parents and school districts. Separately, a New Mexico jury ordered Meta to pay $375 million for enabling child predators on its platforms, the first successful state suit of its kind. Attorneys general in 40+ states are watching. Meta said it will appeal both rulings. ^{[3] [9]}

Micron (MU) –5.49%, AMD –6.35%, Nvidia –3.70%. Google's TurboQuant compresses key-value cache in LLM inference from 16 bits to 3 bits per value, delivering an 8x throughput improvement on H100 hardware per Google's own benchmarks. Markets immediately repriced the forward demand curve for HBM and DRAM. SK Hynix and Samsung each fell 5–6% in Seoul. Analysts invoked the Jevons Paradox — efficiency gains tend to expand total consumption — but the near-term memory demand outlook now carries a question mark. ^{[4] [10]}

Olaplex (OLPX): +51.13% to $2.01. Germany's Henkel agreed to acquire the premium hair care brand at $2.06 per share — a 55% premium — valuing the company at $1.4 billion. Henkel had pre-approval from majority shareholder Advent International, requiring no broader shareholder vote. Olaplex had traded as low as $0.99 this year and had shed roughly 95% of its value since its 2021 IPO. ^[8]

After the bell

Navan (NASDAQ: NAVN) reported Q4 FY2026 results after Wednesday's close, triggering a 23% after-hours move that carried through Thursday's session. Revenue: $177.9M vs. $162.0M estimate. Adjusted EPS: +$0.02 vs. –$0.13 estimate. Full-year revenue grew 31% to $702M; the company reached positive free cash flow a year ahead of plan. Q1 FY2027 guidance of $204–$206M topped the $187.7M consensus; full-year FY2027 guidance of $866–$874M exceeded the $840.6M estimate. Navan ended the year with $741M in cash against $125M in debt. ^[7]

What to watch

Iran's next move. Trump's "final blow" warning puts the conflict at a binary inflection. A formal counter-proposal or mediation signal likely triggers a relief rally in equities and pressure on crude and gold. Further escalation — strikes on energy infrastructure, Hormuz disruption — resets the oil demand calculus entirely.

Meta's litigation pipeline. With 2,000 pending suits and 40+ state attorneys general using Thursday's verdicts as templates, the litigation overhang is now the most material undisclosed liability on Meta's balance sheet. Watch for analyst estimate revisions to legal reserves or any early settlement signals.

TurboQuant adoption speed. The algorithm will be presented at ICLR 2026; open-source ports to llama.cpp and MLX appeared within 24 hours of release. How quickly it moves into production inference determines whether Thursday's memory chip repricing was structural or a one-session overreaction.

Core PCE. Sitting at 3.0% — 100 bps above target — the next PCE print and any Fed communications this week will either validate the one-cut-in-Q4 scenario priced into futures or begin to reintroduce hike probability, currently below 20%.

Friday's calendar. Carnival Corporation (CCL) reports Q1 2026 before the open — the first major leisure company to report into the Iran conflict. Consensus: EPS of $0.18 on revenue of $6.14B. Management's language on forward bookings and cancellations will be a real-time read on consumer confidence in discretionary travel.