US Stocks Edge Lower as Oil Prices Rise, Earnings Reports Roll In
US stocks edged further away from their recent records on Thursday as Wall Street faced pressure from rising oil prices and mixed company earnings, according to AP News. The S&P 500 fell 13.59 points, or 0.2%, to 7,709.96, pulling further away from its record set on Tuesday. The Dow Jones Industrial Average dropped 464.02 points, or 0.9%, to 53,885.10, while the Nasdaq composite slipped 15.09 points, or 0.1%, to 26,348.35.
Despite Thursday’s pullback, all three major indices remain on track for solid weekly gains heading into Friday. Wall Street opened the week soaring to new records before calming over the last two days, as markets grapple with uncertainties surrounding the ongoing US-Iran conflict and its impact on inflation.
Key Stock Movers
Honeywell Aerospace suffered the steepest decline, falling 23.2% after reporting results that fell well short of forecasts. The company, which was spun off from Honeywell International in June, lowered its 2026 organic sales growth forecast to 4%-5% from a previous range of 7%-9%, citing supply chain constraints. Approximately $13.5 billion in equity value was wiped out, according to TS2.tech. CEO Jim Currier said guidance is now aligned with the supply chain’s “demonstrated capabilities.”
AppLovin slumped 19.7% after the digital ad company reported mixed financial results, while Sandisk and Western Digital sank as their forecasts underwhelmed investors. On the positive side, Warner Bros. Discovery rose 1.7% and Molson Coors gained 1.3% after reporting earnings that beat expectations.
SpaceX rose 6.1% to $114.92 as more than 911 million shares held by early investors and employees became eligible for sale when a lockup period expired. This more than doubled the publicly tradable float from roughly 639 million to about 1.55 billion shares, as reported by Yahoo Finance. The stock remains about 20% below its $135 IPO price and roughly 52% below its post-IPO high of $225.64 reached in June. The company also announced it would work exclusively with Nvidia for AI chips, which helped Nvidia gain more than 3% on Wednesday while AMD fell 7%.
Oil Prices and Geopolitical Tensions
Oil prices gained ground as uncertainty persists over the US war with Iran, which has stifled the global flow of oil for approximately five months. Brent crude, the international standard, rose 3.8% to $82.49 per barrel, while global oil prices reached $83 per barrel, according to Yahoo Finance.
Iran announced it had reached an agreement with Oman for a temporary shipping route through the Strait of Hormuz. Iranian Foreign Ministry spokesperson Esmail Baghaei said the deal would be finalized “if certain third parties do not obstruct this process,” as Al Jazeera reported. The proposed route would be used for two to four months or potentially longer. A fifth of the world’s traded oil and natural gas once passed through the strait, and oil prices surged as high as $113 during the conflict.
Economic Indicators and Fed Policy
The rate of inflation remains stuck above 3%, and higher energy costs have been squeezing businesses and households while threatening to crimp broader economic growth. The US economy expanded at a sluggish 1.5% pace during the second quarter.
A weekly report on Thursday showed initial jobless claims rose to 199,000 in the week of August 1, below economists’ expectations of 205,000, according to CNBC TV18. July layoffs plunged to their lowest monthly level in two years, per a Challenger, Gray & Christmas report. The July jobs report is scheduled for release on Friday.
Worries about inflation and the jobs market have prompted the Federal Reserve to hold its benchmark interest rate steady at 3.50%-3.75% for five consecutive meetings. Stubborn inflation, however, is nudging the central bank toward raising rates before the end of the year. Treasury yields rose in the bond market, with the 10-year yield climbing to 4.67% from 4.63% late Wednesday.
Earnings Season Context
Roughly 85% of companies in the S&P 500 have reported their Q2 results, and overall earnings growth for the period is shaping up to be the strongest since 2021. FactSet forecasts earnings for the S&P 500 grew by 24.7% in Q2 2026, marking the second-straight quarter of earnings growth above 20%, according to Interactive Investor.
Strong overall profits have helped allay concerns on Wall Street about the market being overpriced. However, investors remain hyper-focused on AI capital requirements and monetization, with semiconductor stocks trading down more than 20% and meeting the technical definition of a bear market.
What to Watch
“August is off to an extremely strong start, but there is still plenty of August left to go, and August is typically a volatile month for stocks,” said Clark Bellin, president and chief investment officer at Bellwether Wealth, in a research note cited by AP News.
The July jobs report, due Friday, will be the main event on this week’s economic calendar and could influence the Federal Reserve’s policy trajectory. Meanwhile, investors will continue monitoring developments in the Strait of Hormuz and whether the Iran-Oman agreement materializes into a functioning shipping route. As Kiplinger noted, the S&P 500 has remained “remarkably resilient” despite the crosscurrents, supported by an economy that continues to grow and corporate earnings.