The Dow fell 0.71% and the S&P 500 slipped 0.07% as software earnings weighed on sentiment, oil climbed on Strait of Hormuz concerns, and investors looked ahead to Friday's July payrolls report.
U.S. stocks edged lower on Thursday after a strong start to the week, with losses in software shares offsetting some of the optimism that had recently pushed the Dow Industrials and S&P 500 to record highs. AppLovin plunged more than 18% after missing Wall Street's quarterly revenue estimates, while Datadog fell about 17% after saying third-quarter revenue growth would slow. Western Digital dropped nearly 11% and Sandisk fell more than 4% following quarterly results, though both remain sharply higher for the year. SpaceX, by contrast, reversed earlier losses and rose nearly 2% even as the lock-up period for early investors expired, a moment markets often watch for potential insider selling. Investors were also tracking geopolitics and macro data. Oil prices rose after Iran's semi-official Fars news agency said an Iranian parliamentary committee was reviewing a preliminary bill that would bar U.S., Israeli and other "hostile" vessels from transiting the Strait of Hormuz, a key oil shipping route. U.S. crude rose 2.75% to $77.29 a barrel and Brent gained 3.65% to $82.35. Traders also parsed weekly jobless claims ahead of Friday's nonfarm payrolls (monthly U.S. employment report) for July, which could shape expectations for the Federal Reserve's next rate moves as Chairman Kevin Warsh has scaled back on forward guidance (central bank signaling on future policy).