NEW YORK – U.S. stocks closed lower Thursday as investors weighed higher oil prices, another round of corporate earnings and continuing geopolitical uncertainty in the Middle East, factors that tempered momentum after recent record highs on Wall Street.
The S&P 500 fell 13.59 points, or 0.2%, to close at 7,709.96, extending its pullback after reaching an all-time high earlier this week. Despite the decline, the benchmark index remained on track to post a weekly gain.
The Dow Jones Industrial Average dropped 464.02 points, or 0.9%, to finish at 53,885.10, while the Nasdaq Composite slipped 15.09 points, or 0.1%, to close at 26,348.35. Both indexes also remained higher for the week.
Markets had rallied earlier in the week as investors responded to stronger-than-expected corporate earnings, but sentiment moderated as traders reassessed inflation risks, oil prices and the broader economic outlook.
Corporate Earnings Drive Individual Stocks
Quarterly earnings continued to shape trading across several sectors.
Warner Bros. Discovery rose 1.7% after reporting financial results that exceeded Wall Street expectations, while Molson Coors gained 1.3% following stronger-than-expected quarterly earnings.
Other companies came under pressure after disappointing results.
Honeywell Aerospace tumbled 23.2% after reporting earnings that fell well short of analysts’ forecasts. Digital advertising company AppLovin dropped 19.7% after releasing mixed quarterly results.
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According to The Associated Press, approximately 85% of S&P 500 companies have now reported quarterly earnings. Overall profit growth is on pace to be the strongest since 2021, helping support equity valuations despite broader market uncertainty.
SpaceX Advances After Lockup Period Ends
Outside the earnings season, SpaceX gained 6.1% after more than 911 million shares held by employees and early investors became eligible for sale following the expiration of the company’s post-initial public offering lockup period.
The newly tradable shares represented more than twice the number sold during the company’s June IPO.
SpaceX shares, which climbed as high as $225 after going public, have since retreated below their $135 offering price and were trading around $115.
Oil Prices Renew Inflation Concerns
Energy markets remained a major focus for investors.
Brent crude, the global oil benchmark, rose 3.8% to settle at $82.49 per barrel as uncertainty persisted over the conflict involving the United States and Iran and its impact on global energy supplies.
Iran has indicated it is nearing an agreement with Oman to reopen the Strait of Hormuz, while President Donald Trump has also suggested a deal could be reached. However, negotiations have repeatedly advanced and stalled during the five-month conflict.
The Strait of Hormuz is one of the world’s most important energy chokepoints, carrying roughly one-fifth of globally traded oil and natural gas under normal conditions.
Oil prices surged above $113 per barrel earlier during the conflict, contributing to higher fuel prices and transportation costs that have added to inflationary pressures worldwide.
Investors Await Key Economic Data
Investors also monitored economic data for clues about the Federal Reserve’s next policy move.
Inflation has remained above 3%, while the U.S. economy expanded at an annualized rate of 1.5% during the second quarter. Consumer spending has remained resilient, although labor market growth has shown signs of moderating.
A government report released Thursday showed initial applications for unemployment benefits increased slightly from the previous week, while layoffs remained at historically low levels.
Markets are now focused on Friday’s July employment report, which is expected to provide another important indicator of labor market conditions and could influence expectations for future Federal Reserve policy.
The Federal Reserve has kept benchmark interest rates unchanged while monitoring inflation and economic growth. Persistent price pressures have led some investors to anticipate another interest rate increase before the end of the year.
Treasury yields edged higher, with the benchmark 10-year U.S. Treasury yield rising to 4.67% from 4.63% at Wednesday’s close.
European stock markets mostly finished higher as investors also evaluated corporate earnings and the global economic outlook.
This report is based on reporting by The Associated Press.
