U.S. stocks moved lower during Thursday's late trading session, with technology shares leading the decline. The S&P 500 had earlier reached a new intraday record high. Market participants continued to monitor developments in U.S.-Iran relations and the ongoing corporate earnings season. Former President Trump claimed that the U.S. has full control over the Strait of Hormuz. Rising tensions in the Middle East heightened investor risk aversion.
The Dow Jones Industrial Average fell by 195.63 points, or 0.40%, to 49,294.40. The Nasdaq Composite dropped 215.00 points, or 0.87%, to 24,442.57. The S&P 500 declined 30.19 points, or 0.42%, to 7,107.71. During early Thursday trading, the S&P 500 climbed to a peak of 7,147.78, setting a new intraday record. Market focus centered on geopolitical risks surrounding the Strait of Hormuz. Former U.S. President Trump stated on social media that the United States has complete control over the strait and will impose strict controls on passing vessels. This announcement intensified market concerns about potential energy supply disruptions and escalating conflict. Concurrently, corporate earnings reports showed mixed results. Technology giant Adobe announced a $25 billion stock repurchase program following a decline in its share price. Heavyweight components such as American Express and Comcast were also weighed down by market sentiment. Although some companies reported earnings that surpassed expectations, geopolitical uncertainty temporarily overshadowed positive signals from the earnings season, putting overall pressure on the market. Notable individual stocks on Thursday included IBM and ServiceNow, both of which fell sharply after releasing their latest financial results. Tesla's stock initially rose following better-than-expected earnings, but later gave up those gains and turned negative after CEO Elon Musk warned that capital expenditures would "increase significantly" as the electric vehicle maker expands into AI-driven autonomous vehicles and humanoid robots. Markets continued to watch developments in the Middle East. Former U.S. President Donald Trump stated on Thursday that America has full control over the Strait of Hormuz. In a social media post, Trump said, "We have complete control over the Strait of Hormuz. Any vessel entering or exiting the strait must obtain permission from the U.S. Navy. Until Iran agrees to a deal, the Strait of Hormuz will be completely blocked and heavily guarded!" This followed Trump's announcement on Wednesday of an extension to the U.S.-Iran ceasefire agreement. Both the S&P 500 and the tech-heavy Nasdaq Composite closed at record levels that day. The S&P 500 gained 1.05%, while the Nasdaq advanced 1.64%. The Dow Jones Industrial Average rose 340.65 points, or 0.69%. Late Tuesday, Trump suggested that extending the ceasefire was justified due to the Tehran government being "severely divided." Nevertheless, geopolitical tensions in the region remained high. Reports indicated that Vice President JD Vance paused plans to join peace talks due to a lack of commitment from Iran. Iranian state media also reported that Tehran's negotiators would not attend, calling talks with the U.S. a "waste of time." On Wednesday, the Iranian navy stated it had seized two container ships in the Strait of Hormuz. The generally strong earnings season has also bolstered investor sentiment. Among the 87 S&P 500 companies that had reported results, 81% exceeded profit expectations, while 76% surpassed revenue forecasts. Julie Biel, Chief Market Strategist at Kayne Anderson Rudnick, said on Wednesday, "The real difficulty is that we keep seeing very, very tense headlines that make everyone quite hesitant and anxious. But ultimately, earnings expectations continue to rise, which actually suggests companies are finding ways to navigate all this noise, manage through this uncertainty, and still achieve profit growth." Traders also awaited the preliminary April S&P Global PMI data for the manufacturing and services sectors. On the economic data front Thursday, U.S. initial jobless claims for the previous week came in slightly higher than expected but remained at levels indicating low layoffs. The U.S. Labor Department reported that seasonally adjusted initial claims for unemployment benefits totaled 214,000 for the week ending April 18, an increase of 6,000 from the prior week and above the Dow Jones consensus estimate of 210,000. Continuing claims, which lag by one week, edged up to 1.82 million.
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