The S&P 500 fell on Thursday after hitting a new record daily high, as oil prices recovered from significant losses and traders awaited further developments between the US and Iran.
The broad market index fell 0.38% to close at 7,337.11 points, dragged lower by losses in Amazon, as well as semiconductor stocks such as Broadcom and Micron Technology. The Nasdaq Composite fell by 0.13% and ended at 25,806.20 points. The technology index also hit a new record high during trading. The Dow Jones Industrial Average fell by 313.62 points, or 0.63%, and stopped at 49,596.97 points.
Oil prices fell off trading lows after hovering well below $100 earlier in the session. U.S. West Texas Intermediate crude futures fell 0.28% to $94.81 a barrel, while international Brent crude futures fell 1.19% to settle at $100.06 a barrel.
Stocks rose on Wednesday, while oil prices eased after Axios reported, citing sources, that the US and Iran were moving closer to an agreement to end the war. Specifically, two US officials and two other sources familiar with the matter told the outlet that the White House believes it is nearing a 14-point, one-page memorandum of understanding not only to end the war, but also to establish a framework for more detailed nuclear negotiations, SEEbiz reports.
A spokesman for Iran’s foreign ministry told CNBC on Wednesday that Iran is evaluating the US proposal for a resolution. Iran has not yet reached a final conclusion on the matter, and the country has not responded to the US, Iranian state media reported on Thursday.
A senior Iranian official said the Middle Eastern country will not allow the US to reopen the key Strait of Hormuz passage with an “unrealistic plan,” The Wall Street Journal reported, citing Iran’s state-run Press TV. Iran also would not allow the US to leave the conflict without paying reparations for the damage done to the country, the official added.
Aside from investors’ hopes for an easing of tensions in the Middle East, a season of “explosive” business results also boosted stocks, along with “voracious demand and momentum behind the AI trade,” according to Baird investment strategist Ross Mayfield.
“We pretty quickly went from ‘Everybody’s bearish’ to ‘Oh my God, everybody’s bullish again,’” he said. “The market is probably overbought here ahead of the weaker seasonal period, but those are minor quibbles, not real roadblocks. You’re kind of set up for a debacle scenario here, unless something happens out of the box.”
Fortinet was among the key gainers on Thursday, rising 20% after the company raised its annual earnings guidance. Meanwhile, Peloton shares jumped nearly 9% after third-quarter revenue beat expectations.
