Wall Street ended lower Tuesday, with Amazon and Alphabet dipping, as investors became more pessimistic about a potential deal to bring stability to the Middle East.
The Strait of Hormuz will remain closed as long as the U.S. does not change its behavior and accept Iran's conditions to end the war, the newly appointed secretary of Iran's Supreme National Security Council said.
The S&P 500 declined 0.32% to 7,728.20 points. The Nasdaq dropped 0.6% to 26,445.45 points, while the Dow Jones Industrial Average declined 0.34% to 53,791.85 points.
Brent crude futures held near one-week highs in choppy trading, while the S&P 500 energy sector index climbed 1.1%.
"As has been the case for months, it's just really hard to come to an agreement that works for everyone. Oil is a little higher, pricing in more uncertainty around that," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Ky.
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"The market has obviously gyrated around this conflict at times,” he said, “but it hasn't been the big headwind that a lot of people imagined it might be."
Amazon dipped 2.1% and Alphabet fell 3.8%, weighing on the S&P 500 and Nasdaq. SpaceX declined almost 4%.
Alternative asset managers rose, with Apollo Global up 6.2% and Blackstone rallying almost 4%. They were among financial institutions that recently partnered with Nvidia to establish compute-financing platforms aimed at mobilizing more than $500 billion.
Even as the S&P 500 dipped, advancing issues outnumbered falling ones by a 1.2-to-one ratio.
The S&P 500 posted 22 new highs and one new low; the Nasdaq recorded 108 new highs and 75 new lows.
Strong quarterly earnings helped lift the S&P 500 to all-time highs last week, while the Nasdaq was down about 2% from its record-high close on June 2.
Signs that heavy investments by Microsoft and Amazon in artificial intelligence data centers are paying off also lifted sentiment.
Consumer and producer price inflation readings, due over the next two days, will be crucial in shaping market expectations on the Federal Reserve's policy path, given Chairman Kevin Warsh's goal of reducing guidance on monetary policy. Rising energy costs, stemming from the Iran conflict, spurred inflation concerns and complicated the paths of central banks globally.
Traders are split over the likelihood of an interest rate hike at the central bank's September meeting, according to the CME FedWatch tool.
Jabil climbed 5.9% after UBS upgraded the electronics firm's stock to "buy" from "neutral."
U.S.-listed shares of On tumbled 20.3% after the sportswear brand missed sales estimates.
LNG company Venture Global fell 7.3% after its second-quarter revenue slightly missed estimates.
