Major United States benchmark indexes closed lower on Thursday (Friday AEST), retreating from record intraday highs as investors monitored developments surrounding negotiations between the United States and Iran and assessed fresh economic data.
The Dow Jones Industrial Average fell 313.6 points or 0.6% to 49,597.0, the S&P 500 declined 28.0 points or 0.4% to close at 7,337.1, and the Nasdaq Composite slipped 32.8 points or 0.1% to finish the session at 25,806.2.
Oil prices pared earlier losses as markets weighed reports that Washington and Tehran were moving closer towards a temporary agreement aimed at ending hostilities.
Brent crude futures fell 1.2% to close at US$100.06 per barrel, while U.S. West Texas Intermediate crude futures settled down 0.3% at US$94.81 per barrel.
Investor sentiment had strengthened earlier this week after Axios reported, citing sources, that the United States and Iran were nearing a deal to end the conflict.
According to the report, the White House believed a one-page, 14-point memorandum of understanding was close to being finalised, potentially ending the war and establishing a framework for broader nuclear negotiations.
However, uncertainty remained after a senior Iranian official reportedly told Iran’s state-owned Press TV that Tehran would not permit the United States to reopen the Strait of Hormuz under what it described as an “unrealistic plan”.
The official also stated that Iran would not allow the U.S. to exit the conflict without compensation for damages inflicted during the war.
Sources and officials said both nations were edging closer to a temporary arrangement that would halt fighting while leaving several contentious issues unresolved.
Economic data released during the session showed initial jobless claims in the United States rose less than expected last week, reinforcing views that the labour market remains resilient.
Following a strong private payrolls report on Wednesday, investor attention has shifted towards Friday’s closely watched nonfarm payrolls report.
Markets are expecting that the U.S. economy added 62,000 jobs in April after employment rebounded by 178,000 in March.
Markets continued to price in expectations that the U.S. Federal Reserve would leave interest rates unchanged through the end of the year amid elevated energy prices and ongoing labour market strength.
Among corporate movers, Datadog surged 31.3% after the cloud monitoring company lifted its full-year earnings forecast.
Fortinet jumped 20% after raising its full-year billings guidance, while Peloton advanced 8.9% after reporting third-quarter revenue above expectations.
Whirlpool tumbled 11.9% after the appliance manufacturer missed first-quarter sales estimates and suspended its dividend.
U.S.-listed shares of Arm Holdings also declined 10.1% as concerns about the company’s ability to secure enough supply for its new artificial intelligence chip overshadowed an upbeat earnings outlook.
Intel and Advanced Micro Devices each lost about 3%, giving back some of the gains recorded earlier in the week.
On the bond markets, the yield on the U.S. 10-year Treasury note rose 0.7% to 4.384%, while the two-year Treasury yield increased 1.1% to 3.911%.
