United States benchmark averages finished lower on Thursday (Friday AEST) as investors assessed another wave of corporate earnings while monitoring developments surrounding potential peace talks between the United States and Iran.
The Dow Jones Industrial Average dropped 464.0 points, or 0.9%, to 53,885.1. The S&P 500 fell 13.5 points, or 0.2%, to 7,710.0, while the Nasdaq Composite edged down 15.1 points, or 0.1%, to 26,348.4.
The declines followed a strong week that saw both the Dow and S&P 500 reach record highs, supported by better-than-expected corporate earnings, easing concerns over heavy artificial intelligence-related spending and growing optimism that the conflict involving Iran could move towards a resolution.
Oil prices rebounded after earlier losses this week. U.S. crude settled 2.75% higher at US$77.29 a barrel, while Brent crude climbed 3.83% to settle at $82.49 a barrel.
Earlier signs of progress towards a peace agreement had weighed on crude prices, helping to ease inflation concerns, reduce expectations of another Federal Reserve rate hike and push U.S. Treasury yields lower.
Among individual stocks, data storage company Western Digital tumbled 13% following its quarterly results, while memory chip maker Sandisk fell 6.8%.
Despite the declines, Sandisk remains up more than 400% this year, while Western Digital has gained about 160%.
AppLovin plunged 19.7% after the marketing platform reported quarterly revenue below Wall Street expectations.
Datadog also slumped 19% after the cloud security company warned that revenue growth is expected to slow in the third quarter. Both stocks were among the largest drags on the S&P 500.
Economic data showed initial jobless claims rose slightly last week to 199,000, compared with expectations for 202,000, an increase of 1,000 from the previous week's revised level.
The report comes ahead of Friday's closely watched July nonfarm payrolls release, which is expected to provide further clues on the Federal Reserve's interest rate outlook as Chair Kevin Warsh continues to offer less forward guidance.
On the bond markets, the 10-year and two-year Treasury yields rose 1.3% and 1.5% to 4.676% and 4.247%, respectively.
