Wall Street’s record-breaking run stalled on Thursday as a sharp rise in oil prices and mixed corporate earnings prompted a modest pullback. The S&P 500 slipped 0.2 per cent, retreating from the all-time high reached earlier in the week, while the Dow Jones Industrial Average fell 0.9 per cent. The technology-heavy Nasdaq Composite dipped 0.1 per cent. The Australian sharemarket, which reset its own record on Thursday, was set for a flat open.

Brent crude, the international benchmark, surged 3.9 per cent to $82.55 a barrel, and US West Texas Intermediate rose 2.75 per cent to $77.29. The advance was fuelled by renewed uncertainty over the conflict between the United States and Iran. A proposed deal between Iran and Oman, reported by Reuters, would grant Tehran control over vessels entering the Gulf through the Strait of Hormuz, a chokepoint for global oil shipments. Iran’s semi-official Fars news agency separately reported that a parliamentary committee was reviewing a bill to bar US, Israeli and other “hostile” vessels from the waterway. “Iran is having less of an impact right now … tweets are something, headlines are something, but we really want to see the devil is in the details,” said Robert Bernstone, head of trading at SummitTX Capital.

The earnings season, which has been the strongest since 2021 with roughly 85 per cent of S&P 500 companies beating expectations, offered a mixed picture. Warner Bros. Discovery and Molson Coors gained after reporting encouraging results, but Honeywell Aerospace tumbled 23.2 per cent on a weak forecast. AppLovin slumped 19.7 per cent after missing revenue estimates, and data-storage firm Western Digital and memory-chip maker Sandisk fell sharply despite strong AI-driven demand. Separately, SpaceX shares rose 6.1 per cent as a lockup period expired, making more than 911 million shares held by early investors and employees eligible for sale; the stock closed at $114.92, well below its initial offering price.

Investors now turn to the US nonfarm payrolls report for July, due on Friday, which is expected to shape expectations for the Federal Reserve’s next move on interest rates. A weekly update showed a slight increase in jobless claims, though layoffs remain historically low. With Fed Chairman Kevin Warsh having scaled back forward guidance, market pricing for a rate hike in September has moved closer to an even chance, according to the CME FedWatch Tool. “The employment report is of greater importance … we need to see a figure that is not too positive nor too negative for the market to continue rising,” said Clark Bellin of Bellwether Wealth.