NEW YORK — After a strong start to the week, U.S. stocks finished the trading session lower Thursday 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 tempered some concerns about companies’ massive spending on artificial intelligence, 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.
On Thursday, the Dow Jones Industrial Average fell 464.02 points, or 0.85%, to 53,885.10. The S&P 500 slipped 13.52 points, or 0.18%, to 7,710.03. The Nasdaq Composite edged down 15.09 points, or 0.06%, to 26,348.35.
Oil prices rose, with U.S. crude settling up 2.75% at $77.29 a barrel and Brent 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, a key route for about a fifth of the world’s oil supplies.
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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 Digital tumbled 13% and memory chip maker Sandisk dropped 6.8% in the wake of their quarterly results. Both companies surged this year, however, with Sandisk up more than 400% and Western Digital up about 160%.
AppLovin plunged 19.7% after the marketing platform missed Wall Street estimates for quarterly revenue, while Datadog plummeted 19% 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 reported earnings through Wednesday morning, 84.8% topped analyst expectations, according to LSEG data, well above the 68% average beat rate since 1994.
SpaceX shares erased losses from earlier in the session and closed 6.1% 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 Friday, which will shape expectations for the Fed's path for interest rates.
