U.S. stocks opened lower on Thursday evening, Beijing time. International oil prices rebounded following mutual airstrikes by the U.S. and Iran on each other's air bases. The U.S. core PCE inflation rate for April came in at 3.3% year-over-year, meeting expectations.
The Dow Jones Industrial Average fell 189.53 points, or 0.37%, to 50,454.75. The Nasdaq Composite edged up 3.08 points, or 0.01%, to 26,677.82. The S&P 500 gained 3.14 points, or 0.04%, to 7,523.50.
In early Thursday trading, U.S. West Texas Intermediate (WTI) crude futures rose 1.8%, surpassing $90 per barrel. Brent crude futures also increased by nearly 2%, to $96.07, after media reports cited a U.S. official stating that the U.S. military had launched a new round of strikes on a military site within Iran.
According to the Tasnim News Agency, Iran's Islamic Revolutionary Guard Corps stated on Thursday that they attacked a U.S. Air Force base following what they described as "an American pre-dawn attack near Abbas Port airport." The IRGC warned that any repetition of aggressive actions would elicit a "more decisive" response.
A U.S. official told media that U.S. forces conducted a new round of strikes on a military site inside Iran. U.S. officials considered the site a threat to American troops and commercial shipping in the Strait of Hormuz.
Simon-Peter Massabni, Director of Business Development at XS.com, commented, "The rise in oil prices highlights the fragility of the current 'no war, no peace' situation between the U.S. and Iran."
He added, "While the market still holds hope for an imminent end to the conflict, the increasing frequency of skirmishes between the two sides, coupled with the apparent frustration of U.S. President Trump, suggests this conflict may persist. Consequently, the Strait of Hormuz is likely to remain closed."
Shares of cloud data platform provider Snowflake surged 36% in after-hours trading on Wednesday after the company signed a plan to spend $6 billion on Amazon Web Services (AWS) over five years. The company also reported first-quarter earnings and revenue that exceeded expectations.
Previously, a drop in oil prices on Wednesday contributed to the blue-chip Dow Jones Industrial Average setting new intraday and closing highs that day.
Oil prices fell during Wednesday's trading session after U.S. Secretary of State Marco Rubio stated at a White House cabinet meeting that negotiations with Iran had made some progress, adding that the U.S. administration preferred "a negotiated diplomatic path, and we will do everything we can to make it successful."
However, U.S. President Trump stated he would not allow Iran to control the critical Strait of Hormuz as part of any agreement.
Reportedly, prior to these comments from Rubio and Trump, Iranian state television had indicated that Tehran promised to restore commercial shipping in the Strait of Hormuz to pre-war levels within one month of reaching an agreement with the United States. The White House denied reports of a memorandum of understanding, calling them "pure fabrication."
On the economic data front, the U.S. Personal Consumption Expenditures (PCE) price index for April indicated that inflation continued to impact consumers' wallets in April, which may keep the Federal Reserve on hold until the current wave of inflation subsides.
The U.S. Commerce Department reported that the seasonally adjusted PCE price index increased 0.4% month-over-month in April, bringing the 12-month inflation rate to 3.8%. Economists surveyed by Dow Jones had expected increases of 0.5% month-over-month and 3.8% year-over-year, respectively.
Excluding volatile food and energy prices, the core PCE price index rose 0.2% for the month and 3.3% from a year ago, compared with expectations of 0.3% monthly and 3.3% annual increases, respectively.
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