U.S. stock markets moved lower on Thursday amid rising oil prices and a mix of corporate earnings reports, pulling back from record highs reached earlier in the week. The Standard & Poor’s 500 index declined 13.59 points, or 0.2 percent, closing at 7,709.96, while the Dow Jones Industrial Average dropped 464.02 points, or 0.9 percent, to 53,885.10. The Nasdaq composite fell 15.09 points, or 0.1 percent, to 26,348.35. Despite these declines, both the Dow and Nasdaq remain positioned to record solid gains for the week.

The markets are grappling with uncertainties related to the ongoing U.S. military engagement with Iran and its effects on inflation and the broader economy. The conflict has disrupted global oil supplies, contributing to rising crude prices. Brent crude, the international benchmark, increased 3.8 percent to $82.49 per barrel as diplomatic efforts continue, with Iran indicating progress toward a deal with Oman to reopen the Strait of Hormuz—a strategic chokepoint through which approximately a fifth of the world’s oil and natural gas trade flows. Former President Donald Trump also stated that an agreement is close, though the situation has experienced several fluctuations over the past five months. During the height of the conflict, oil prices surged to as high as $113 per barrel. Elevated energy costs have added upward pressure on inflation by increasing gasoline prices and shipping expenses.

Inflation remains above 3 percent, presenting challenges for businesses and consumers alike and raising concerns about potential impacts on economic growth. The U.S. economy expanded at a modest 1.5 percent annual rate in the second quarter. Consumer spending continues, and the labor market remains relatively strong, but signs of slowing have emerged. A weekly report on Thursday showed a rise in new unemployment claims, although layoffs remain within a historically moderate range. Hiring slowed notably in June, with employers adding only 57,000 jobs. The forthcoming July employment report is scheduled for release on Friday.

Corporate earnings delivered mixed signals amid these economic headwinds. Approximately 85 percent of S&P 500 companies have reported second-quarter results, with overall earnings growth expected to be the strongest since 2021. Warner Bros. Discovery shares rose 1.7 percent after surpassing analyst expectations. Molson Coors also saw gains, increasing 1.3 percent on encouraging financial results. Conversely, Honeywell Aerospace fell sharply by 23.2 percent after reporting results that missed forecasts, while digital advertising company AppLovin declined nearly 20 percent following mixed earnings.

In the broader market, SpaceX shares climbed 6.1 percent after more than 911 million shares held by early investors and employees became eligible for sale as a lockup period expired. This volume is more than double the shares initially offered at the company’s IPO in June. SpaceX’s stock reached a high of $225 shortly after its market debut but has since dropped below the $135 offering price and is currently trading near $115.

Markets remain cautious as investors weigh the potential economic impact of sustained inflation, rising energy prices, and uncertain geopolitical developments. The Federal Reserve has maintained its benchmark interest rate steady for now but is expected to consider rate hikes later this year to control inflation. Such measures could moderate economic growth and exert downward pressure on stock prices and other investments. Treasury yields increased on Thursday, with the 10-year note rising to 4.67 percent from 4.63 percent.