U.S. stocks closed lower Thursday as investors weighed uncertainty surrounding Iran peace negotiations and a pullback in semiconductor shares following a powerful technology-driven rally.
By yourNEWS Media Newsroom
The S&P 500 closed lower Thursday, retreating from its recent record high as weakness in semiconductor stocks and uncertainty surrounding U.S.-Iran negotiations pressured broader markets.
Technology and artificial intelligence shares that had fueled much of Wall Street’s recent rally showed signs of cooling, with investors taking profits after weeks of gains tied to optimism over AI demand and strong corporate earnings.
According to preliminary market data, the S&P 500 fell 29.46 points, or 0.40%, to close at 7,335.66. The Nasdaq Composite slipped 32.75 points, or 0.15%, ending the session at 25,801.20, while the Dow Jones Industrial Average declined 313.34 points, or 0.64%, to 49,597.25.
Semiconductor stocks led much of the market’s decline.
Arm Holdings shares dropped sharply after concerns emerged over the company’s ability to secure enough supply capacity for its new artificial intelligence chip products despite issuing a strong earnings outlook.
Intel Corporation and Advanced Micro Devices also declined, surrendering some of the gains recorded earlier in the week.
The broader semiconductor sector weakened as the PHLX Semiconductor Index pulled back, though the index still remained up roughly 46% for the quarter amid continuing enthusiasm surrounding AI infrastructure and chip demand.
At the same time, investors monitored developments involving negotiations between the United States and Iran.
Officials and diplomatic sources indicated both countries were moving closer toward a temporary arrangement aimed at halting active hostilities while leaving several long-term disputes unresolved.
Oil prices edged slightly lower during trading but remained elevated near $100 per barrel as traders continued assessing geopolitical risks tied to the Strait of Hormuz and Middle East energy supplies.
Despite Thursday’s decline, several large-cap technology companies continued to advance.
NVIDIA Corporation and Microsoft Corporation both posted gains, reflecting continued investor confidence in major artificial intelligence companies that have driven much of the market’s recent momentum.
“You can have a string of days like this, and that’s not going to take away from the fact that this has been a rip-roaring quarter of recovery, driven by fundamentals,” Mike Dickson, head of portfolio management at Horizon Investments in Charlotte, North Carolina, said Thursday.
Corporate earnings remained a major source of support for equities overall.
S&P 500 companies are currently on pace to deliver their strongest quarterly profit growth in more than four years, helping sustain the broader market rally despite geopolitical uncertainty and elevated energy costs.
Recent economic reports have also eased some investor concerns about the health of the U.S. economy.
New labor market data released Thursday showed weekly unemployment claims increased less than economists expected, reinforcing views that the economy remains resilient.
Investors are now focused on Friday’s nonfarm payrolls report following a strong private-sector payroll reading earlier this week.
Economists surveyed by Reuters expect the U.S. economy added approximately 62,000 jobs in April after payroll growth rebounded by 178,000 in March.
Markets also continued pricing in expectations that the Federal Reserve will keep interest rates unchanged through the remainder of the year as officials balance steady economic growth against persistent inflation and higher energy prices.
Beth Hammack said Thursday she expects the central bank to maintain current interest rates for an extended period while policymakers navigate ongoing uncertainty.
Cybersecurity companies posted gains during the session after positive earnings guidance from Datadog, Inc., which raised its full-year forecast.
CrowdStrike Holdings and Palo Alto Networks also moved higher.
Meanwhile, Whirlpool Corporation shares declined after the appliance manufacturer missed first-quarter sales expectations and suspended its dividend.
Market breadth weakened across the broader exchange, with declining stocks outnumbering gainers within the S&P 500 by roughly 1.7-to-1.
The S&P 500 recorded 18 new 52-week highs and 10 new lows during the session, while the Nasdaq posted 126 new highs and 83 new lows.
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