U.S. stocks pulled back from record highs on Thursday, pressured by rising oil prices and mixed quarterly corporate results. The S&P 500 fell 0.2% to 7,709.96, while Brent crude climbed to $82.49 a barrel amid ongoing uncertainties surrounding the U.S. conflict with Iran and global shipping flows.
Wall Street entered the week on an upward trajectory, touching new records before hitting resistance. Markets have spent the last two days calming down as traders digest a heavy calendar of corporate earnings alongside macroeconomic headwinds. Inflation concerns, the ongoing U.S. war with Iran, and shifting interest rate expectations have conspired to cool the market’s recent enthusiasm.
Corporate Earnings Bring Mixed Fortunes Across Sectors
Despite the broader market retreat, corporate earnings reports continue to paint a resilient picture for many major firms. Roughly 85% of companies in the S&P 500 have delivered their financial results, shaping up the strongest overall earnings growth period since 2021.
Strong overall profits have helped allay investor concerns about the market looking overpriced. Berkshire Hathaway reported a stronger profit than analysts expected for the most recent quarter, with legendary investor Warren Buffett’s firm deploying some of its massive cash reserve into stocks under new CEO Greg Abel. Berkshire Hathaway shares rose 1.5% following the announcement.
Other notable corporate movers included Warner Bros. Discovery, which rose 1.7% after reporting earnings ahead of expectations, and Molson Coors, which gained 1.3% on encouraging financial results. Retailer and superyacht services provider MarineMax jumped 46.1% after agreeing to a $1.5 billion cash acquisition by a Blackstone portfolio company. Teledyne Technologies announced it would buy X-ray imaging component maker Varex Imaging for $18.90 per share in cash, sending Varex shares soaring 48.8%.
On the downside, Honeywell Aerospace fell 23.2% after missing forecasts, and digital advertising firm AppLovin slumped 19.7% following mixed quarterly results. Intel dropped 4.1% after disclosing plans to potentially sell $15 billion of its stock to fund investments aimed at capturing artificial-intelligence technology spending, a move that threatens to dilute existing shareholder stakes.
SpaceX Lockup Expiration Triggers Heavy Trading Volume
Outside of standard earnings reports, Elon Musk’s SpaceX drew heavy market attention as a major share lockup period expired. More than 911 million shares held by early investors and employees became eligible for trading, representing more than double the share volume initially offered during the company’s initial public offering. SpaceX shares rose 6.1% on Thursday, trading around $115 — recovering somewhat after slumping below their initial $135 offering price following a market debut in June that saw the stock spike significantly.
Crude Oil Prices Climb on Middle East Supply Worries
Energy markets remained a primary driver of stock market anxiety as crude prices advanced. Brent crude, the international benchmark, rose 3.8% to $82.49 a barrel, while apnews.com noted a 5% jump to $87.72 earlier in the week. The upward pressure stems from ongoing uncertainty regarding the safety and reopening of the Strait of Hormuz, a critical maritime chokepoint through which a fifth of the world’s traded oil and natural gas once passed.
While Iran has indicated it is nearing a deal with Oman to reopen the strait, and President Trump has previously suggested an agreement was close, the five-month conflict has experienced repeated starts and stops. During earlier peaks of the conflict, oil prices surged as high as $113 per barrel, stoking inflationary pressures that continue to ripple through the global economy.
Inflation Pressures and Federal Reserve Policy Expectations
Stubborn inflation running above 3% has squeezed households and businesses, threatening broader economic growth after the U.S. economy expanded at a sluggish 1.5% pace in the second quarter. Higher energy and shipping costs risk forcing consumers to reallocate spending toward necessities, potentially undercutting nonessential sectors like travel and entertainment.
The Federal Reserve has kept its benchmark interest rate steady amid lingering economic crosscurrents. Although a recent weekly report showed an increase in Americans filing for unemployment benefits and June hiring slowed, employment remains resilient overall. However, persistent inflation is nudging the central bank toward considering further rate hikes before the end of the year to tame price increases. Traders currently price in a nearly 52% probability of a rate hike at the September meeting, according to data from CME Group. In the bond market, the yield on the 10-year Treasury ticked up to 4.67% from 4.63%.
