Quick overview

---

Stocks on Wall Street closed lower on Thursday as investors remained cautious amid escalating tensions between the United States and Iran, with limited signs of progress in ongoing negotiations.

The three major New York indices ended in negative territory, as geopolitical concerns outweighed a generally solid start to the earnings season. The Dow Jones Industrial Average fell 0.37% to 49,309.33, the S&P 500 dropped 0.41% to 7,108.97, and the Nasdaq Composite declined 0.89% to 24,438.50.

Strait of Hormuz tensions escalate

Despite earlier comments from Donald Trump about extending the ceasefire, tensions rose due to increased naval activity around the Strait of Hormuz.

The U.S. military announced the seizure of an Iranian-linked oil tanker, while the Department of Defense released images allegedly showing U.S. troops aboard the vessel in the Indian Ocean. Iran, in turn, published footage appearing to show its forces boarding a cargo ship near the strait.

Iranian Foreign Minister Abbas Araghchi described the blockade as an “act of war,” while Parliament Speaker Mohammad Bagher Ghalibaf said a full ceasefire would only make sense if it were not undermined by maritime restrictions.

On Thursday, Trump said he had ordered the U.S. Navy to “fire upon and destroy any vessel” attempting to lay mines in the strait. In a separate statement, he claimed the U.S. had “total control” over the waterway, adding that no ship could pass without American approval.

Meanwhile, mediators from Pakistan, Turkey, and Egypt are working to revive talks, potentially organizing a meeting on Friday, according to reports from The Wall Street Journal. However, progress remains limited, with both sides communicating through intermediaries.

Oil back above $100

Oil prices continued to climb, extending strong weekly gains. Brent crude rose 1.4% to $103.33 per barrel after surpassing the $100 mark on Wednesday.

“It’s difficult for markets to stay positive as Brent climbs back above the psychological $100 threshold,” said Danni Hewson of AJ Bell.

Mixed economic data

Economic data showed mixed signals. According to S&P Global, U.S. business activity rebounded in April after nearly stalling in March due to the outbreak of conflict in the Middle East.

Meanwhile, the U.S. Department of Labor reported that initial jobless claims rose to 214,000 last week, slightly above expectations of 211,000. Continuing claims increased to 1.82 million.

Earnings provide some support

Despite geopolitical headwinds, corporate earnings have been broadly solid. Data from Bloomberg show that nearly 80% of S&P 500 companies reporting so far have beaten analyst expectations, helping to cushion market losses.