The Dow and S&P 500 indexes closed lower on Thursday, pausing after a strong start to the week, as investors digested the latest round of corporate earnings and looked for signs of progress toward a peace deal between the U.S. and Iran. A robust earnings season, which has tempered some concerns about the massive spending by AI-related companies, and growing optimism over the potential end of hostilities in the Iran war helped propel both the Dow Industrials and S&P 500 to record highs earlier this week.
Oil prices rose, with U.S. crude CLc1 settling up 2.75% at $77.29 a barrel and Brent LCOc1 settling at $82.49 per barrel, up 3.83%. Iran’s semi-official Fars news agency reported that an Iranian parliamentary committee is reviewing a preliminary bill that would bar U.S., Israeli and other “hostile” vessels from transiting the Strait of Hormuz.
According to preliminary data, the S&P 500 .SPX .SPX lost 13.56 points, or 0.18%, to end at 7,709.99 points, while the Nasdaq Composite .IXIC .IXIC lost 10.99 points, or 0.04%, to 26,352.45. The Dow Jones Industrial Average .DJI .DJI fell 453.64 points, or 0.83%, to 53,895.48. The recent indications of movement toward a peace deal helped push crude prices lower earlier in the week and, in turn, eased inflation worries and expectations for a rate hike from the Federal Reserve, which also served to push U.S. Treasury yields lower.
Data storage company Western DigitalWDC.O WDC.O tumbled and memory chip maker SandiskSNDK.O SNDK.O dropped in the wake of quarterly results. Both companies have surged this year, however, with Sandisk up more than 400% and Western Digital up about 160%. AppLovin APP.O APP.O plunged after the marketing platform missed Wall Street estimates for quarterly revenue, while Datadog DDOG.O DDOG.O plummeted after the cloud security firm said it expects revenue growth to slow in the third quarter. Both stocks were among the biggest drags on the benchmark S&P index.
Of the 382 companies in the S&P 500 that have reported earnings through Wednesday morning, 84.8% have topped analyst expectations, according to LSEG data, well above the 68% average beat rate since 1994.
SpaceX SPCX.O SPCX.O shares erased losses from earlier in the session and closed higher, defying expectations that they would be pressured by insider selling, as the lockup period for early investors holding the stock expired.
On the data front, the number of Americans filing claims for unemployment benefits increased slightly last week. The report came ahead of closely watched nonfarm payrolls figures for July due on Friday, which will shape expectations for the Fed’s path of interest rates at a time when Chairman Kevin Warsh has scaled back on forward guidance from the central bank.
Reporting by Chuck Mikolajczak in New York; Additional reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Devika Syamnath, Maju Samuel and Matthew Lewis.
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