The S&P 500 index declined on Thursday, stepping back from a record high as the United States awaited Iran's response to a proposal aimed at reopening the Strait of Hormuz and ending the conflict. Investors also processed a heavy flow of corporate earnings reports.
The S&P 500 fell 0.4%, with nine of its eleven sectors finishing lower. The materials and energy sectors led the declines. The Nasdaq 100 index dipped 0.1%.
Following reports from Iranian media of explosions near the port city of Bandar Abbas, West Texas Intermediate crude oil prices rose approximately 0.2% to around $95 per barrel.
The recent two-day rally that pushed U.S. stocks to new highs was partly fueled by strong earnings from Advanced Micro Devices.
According to Josh Chastant, a portfolio manager at GuideStone, oil prices remain significantly higher than pre-war levels, causing businesses to worry about future energy costs.
Whirlpool shares dropped 12% after the appliance manufacturer lowered its profit forecast, citing increased consumer cost-of-living pressures exacerbated by the Iran conflict.
Data from Challenger, Gray & Christmas showed that planned job cuts in the U.S. technology sector continued to rise in April, bringing the year-to-date total to its highest level in three years.
After falling to multi-decade lows the prior week, U.S. jobless claims saw a slight increase.
Stephen Juneau, an economist at Bank of America, noted in a report on Thursday that a "stable but non-inflationary labor market" offers a glimmer of hope for the Federal Reserve.
Investors are now looking ahead to Friday's non-farm payrolls report and its potential implications for the Federal Reserve's interest rate policy.
At the close of trading, the S&P 500 was down 0.4% at 7,337.11 points. The Dow Jones Industrial Average fell 0.6% to 49,596.97 points. The Nasdaq Composite Index decreased 0.1% to 25,806.2 points. The Nasdaq 100 index declined 0.1% to 28,563.95 points. The Russell 2000 index dropped 1.6% to 2,839.626 points.
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