US equity indexes fell in midday trading on Thursday, clawing back losses from earlier in the session amid reports of diplomatic efforts to reopen the Strait of Hormuz, the chokepoint for a fifth of global crude oil flows.
The Nasdaq Composite declined 0.3% to 21,769.1, after trading more than 2% lower after the opening bell. The S&P 500 was down 0.2% to 6,563.5, recovering intraday losses. The Dow Jones Industrial Average slid 0.4% to 46,374.5, but was off session lows.
The three indexes pared losses after Bloomberg reported Iran is drafting a protocol with Oman to oversee traffic through the Strait of Hormuz, citing a report from the state-run IRNA, which in turn cited Iran Deputy Foreign Minister Kazem Gharibabadi.
Earlier on Thursday, representatives from more than 35 countries and international organizations met to discuss the continued closure of the Strait of Hormuz, the Bloomberg report said.
Espen Barth Eide, the foreign minister of Norway, a major maritime nation and home to several affected shipping companies, said that there was broad agreement on "that a new precedent must not be established for coastal states to be able to restrict or charge fees for allowing ships to sail through international straits," according to the news report.
The three equity gauges had opened sharply lower on Thursday after President Donald Trump overnight vowed to hit Iran "extremely hard" before ending the war "very shortly."
West Texas Intermediate crude oil futures were, however, still up 11.3% to $111.47, and Brent crude futures climbed 6.4% to $107.62, maintaining gains from earlier in the session.
US Treasury yields traded mixed, with the 10-year down by 1.2 basis points to 4.31%. The two-year yield slipped by less than one basis point to 3.8%.
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