Nasdaq drags U.S. stocks lower ahead of mega-cap earnings

The Nasdaq led U.S. benchmarks lower on Tuesday as investors trimmed exposure ahead of first-quarter results from Amazon, Meta, Google and Microsoft. The Nasdaq fell about 1.7% from its record high and slipped below the 27,000 level. The S&P 500 moved out of a low-sloped bull channel and hovered near the 7,100 mark. The Dow Jones Industrial Average remained inside a roughly 500-point band between 49,000 and 49,500. Coca-Cola reported an earnings beat in the morning, while Visa and T-Mobile were scheduled to report after the close.

Trading was affected by rising oil prices and renewed geopolitical uncertainty. West Texas Intermediate crude rose above $100 a barrel after the United Arab Emirates announced its exit from OPEC, reducing expected cartel output. At the same time, prediction-market odds for a U.S.-Iran peace agreement by May 31 fell below 35% after a post on the former president's social feed said Tehran is seeking the reopening of the Strait of Hormuz.

Higher oil pushed energy shares up and raised inflation and margin concerns for other sectors. Energy and financial stocks showed relatively balanced price action during the decline, while most other sectors weakened. Nvidia and Microsoft extended earlier gains during the session.

Technical traders highlighted near-term levels to watch. The Nasdaq's immediate pivot sits near 27,000 with the record high around 27,420; support is in the 26,600–26,750 area and deeper support near 26,200. The S&P 500 faces resistance in the 7,180–7,200 band and support in the 7,020–7,050 area, with a lower floor around 6,750–6,770. The Dow remained between 49,000 and 49,500, with attention on the 50,000 threshold and the all-time high near 50,544.

Short-term selling pushed indexes toward oversold readings, which could slow the pace of declines. Market participants cited headlines on oil and U.S.-Iran negotiations, along with the upcoming reports from Amazon, Meta, Google and Microsoft, as the primary drivers of market direction in the coming days.