<After-Hours US Stocks> Oil Prices Rise, Dragging Down Markets: S&P Ends Lower as Dow Drops Over 450 Points, Ending Five-Day Rally

U.S. stocks declined on Thursday (6th), pulling back after a strong weekly rally, as investors digested another round of corporate earnings and watched for signs of progress in U.S.-Iran peace talks.

Strong quarterly earnings have eased some market concerns about massive spending by AI-related companies. Earlier this week, optimism that the conflict with Iran might end helped both the Dow Jones Industrial Average and the S&P 500 reach record highs.

However, oil prices rose on Thursday. U.S. West Texas Intermediate (WTI) crude gained 2.75%, closing at $77.29 per barrel. Brent crude rose 3.83%, ending at $82.49 per barrel.

Iran's semi-official Fars News Agency reported that a committee in Iran's parliament is reviewing a preliminary bill to ban ships from the United States, Israel, and other "hostile countries" from passing through the Strait of Hormuz.

Earlier in the week, signs of progress toward a peace deal had driven oil prices lower, easing market concerns about inflation and Federal Reserve (Fed) rate hikes, and pushing down U.S. Treasury yields.

Stocks showed mixed reactions post-earnings. Western Digital (WDC-US), a data storage equipment maker, plunged 13% after reporting earnings, while memory chip manufacturer Sandisk (SNDK-US) fell 6.8%. However, both companies are still up significantly year-to-date, with Sandisk gaining over 400% and Western Digital rising around 160%.

Marketing platform AppLovin (APP-US) tumbled 19.7% after its quarterly revenue missed Wall Street expectations. Cloud security firm Datadog (DDOG-US) dropped 19% after forecasting slower third-quarter revenue growth. Both were among the biggest drags on the S&P 500's performance that day.

According to LSEG, as of Wednesday morning, 382 S&P 500 companies had reported earnings, with 84.8% beating analyst profit estimates—far above the historical average of 68% since 1994.

On the economic front, initial jobless claims in the U.S. rose slightly last week. The report came one day before the highly anticipated July non-farm payroll report, which will be released Friday and could influence market expectations for the Fed's future interest rate path.

Major U.S. index performance on Thursday (6th):

Dow Jones Industrial Average: Down 464.02 points, or 0.85%, closing at 53,885.10 Nasdaq Composite: Down 15.09 points, or 0.057%, closing at 26,348.35 S&P 500: Down 13.59 points, or 0.18%, closing at 7,709.96 Philadelphia Semiconductor Index: Up 39.81 points, or 0.33%, closing at 12,048.69 NYSE FANG+ Index: Down 12.78 points, or 0.069%, closing at 18,421.09

Among the S&P 500's 11 sectors, information technology was one of the biggest drags. (Image: finviz)

Key Stocks

NYSE FANG+ tech giants traded mixed. Meta (META-US) rose 0.19%; Apple (AAPL-US) gained 0.45%; Alphabet (GOOGL-US) fell 1.29%; Microsoft (MSFT-US) climbed 2.54%; Amazon (AMZN-US) dropped 0.14%.

Most Philadelphia Semiconductor Index components closed higher. Nvidia (NVDA-US) fell 0.1%; Broadcom (AVGO-US) rose 0.55%; Micron (MU-US) dropped 1.31%; Qualcomm (QCOM-US) gained 1.82%; Applied Materials (AMAT-US) fell 1.27%; Texas Instruments (TXN-US) rose 0.24%; AMD (AMD-US) gained 1.50%.

Taiwanese ADRs mostly ended in green. TSMC ADR (TSM-US) rose 1.01%; ASE ADR (ASX-US) gained 1.28%; UMC ADR (UMC-US) fell 0.41%; Chunghwa Telecom ADR (CHT-US) rose 0.62%.

Corporate News

SpaceX (SPCX-US) saw its first lock-up period expire post-listing, allowing early investors their first opportunity to sell shares. Despite market expectations that insider selling would pressure the stock, it did not materialize. SpaceX recovered from intraday losses, closing up 6.1%. Over 911 million shares became eligible for trading, representing about 7% of outstanding shares.

Alphabet (GOOGL-US) plans to raise up to $25 billion through a new U.S. investment-grade bond issuance. This deal will test whether investor appetite for AI-related bonds has rebounded after July's selloff. According to sources, Alphabet has not yet finalized the issuance size. The bonds could be split into up to 10 tranches with maturities ranging from 2 to 40 years, with initial pricing discussions suggesting the longest-dated bond would yield about 1.55 percentage points above comparable U.S. Treasuries.

The $110 billion acquisition of Warner Bros. Discovery (WBD-US) by Paramount Skydance (PSKY-US), currently stalled due to U.S. legal challenges, made progress Thursday in UK regulatory review. Both the UK antitrust authority and the culture secretary decided not to escalate the investigation, clearing an obstacle for the major media merger.

Economic Data

U.S. initial jobless claims last week: 199,000 (expected 203,000, prior 198,000) U.S. continuing jobless claims last week: 1.801 million (expected 1.79 million, prior 1.777 million)

Wall Street Analysis

Robert Bernstone, Head of Trading at SummitTX Capital, said, "You're seeing market reactions to macro news that may be a bit more muted than usual, partly because it's summer and there's some market fatigue—especially 'news fatigue' around Iran headlines."

He added, "The Iran issue definitely has less impact now, but I'm not saying it has no impact... Tweets, headlines—they're surface-level. What really matters is the detail."

JJ Kinahan, Managing Director of Retail Business Development and Alternative Investment Products at Cboe, noted, "After a period of active trading driven by earnings, the market appears to be pausing briefly. Even if earnings and revenue beat expectations, conservative guidance won't necessarily lift the stock."

Kinahan also pointed out, "There may be some profit-taking pressure," especially on stocks like Sandisk and Western Digital, which have seen remarkable gains over the past year. Over the past 12 months, Sandisk surged nearly 3,000%, and Western Digital jumped over 500%.