US stocks closed lower on Thursday as investors assessed fading hopes for a US-Iran peace deal and renewed tension over the Strait of Hormuz.
S&P 500 – 1 Day Chart
The S&P 500 fell 0.4% to 7,335.66, the Nasdaq edged down 0.1% to 25,806.20, and the Dow dropped 0.6% to 49,596.60. Late-session reports from Iranian state media alleging a US attack on an Iranian oil tanker and subsequent Iranian missile response added to market uncertainty.
Diplomatic efforts mediated by Pakistan remain stalled. While President Donald Trump called recent talks “very good,” Iranian officials described the US proposal as a “wish list” and said Tehran was still reviewing it. The Strait of Hormuz, a critical oil transit route, remains a flashpoint, Iran has imposed new tanker documentation requirements, and the US may restart its “Project Freedom” escort mission after Saudi Arabia and Kuwait lifted base-use restrictions.
Oil prices stabilized after early losses. Brent crude fell 0.7% to $100.54 a barrel, while US WTI rose 0.4% to $95.44. Prices remain well above pre-conflict levels, with US gasoline averaging over $4.50 a gallon.
Ahead of Friday’s key jobs report, labor data showed mixed signals as April job cuts rose to 83,387, the highest for the month since 2009, while initial unemployment claims edged up to 200,000, below expectations.
S&P 500 first-quarter earnings growth is projected at 24.6%, with all 11 sectors posting gains. AI-related demand drove results for chip firms like Arm, though supply constraints weighed on its shares. Tapestry raised its outlook but fell 12.4%, Whirlpool dropped 11.9% after cutting its revenue forecast.
Markets are now watching for Iran’s formal response to the peace proposals and Friday’s employment data. A diplomatic breakdown could reignite oil supply fears, while progress may ease risk premiums and support equities.
