Wall Street closed lower on Thursday as market participants waited for a permanent settlement of the Middle East geopolitical conflicts. Moreover, earnings results of some corporate bigwigs were soft. All three major stock indexes ended in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.9% or 464 points to close at 53,885.10, terminating a five-day winning streak. Notably, 20 components of the 30-stock index ended in negative territory and 10 ended in positive territory. At intraday high, the blue-chip index was up nearly 154 points.
The tech-heavy Nasdaq Composite finished at 26,363.44, slipping 0.1% on weak performance by technology stocks. The S&P 500 was down 0.2% to finish at 7,709.96. Six out of 11 sectors of the broad-market index ended in negative territory while five finished in positive territory.
The Energy Select Sector SPDR (XLE), the Communication Services Select Sector SPDR (XLC) and the Utilities Select Sector SPDR (XLU) fell 2.1%, 1% and 1%, respectively. On the other hand, the Health Care Select Sector SPDR (XLV) and the Materials Select Sector SPDR (XLB) rose 1.3% and 1.2%, respectively.
The fear gauge CBOE Volatility Index (VIX) fell 4.2% to 15.15. A total of 17.09 billion shares were traded on Thursday, lower than the last 20-session average of 17.42 billion. Decliners outnumbered advancers on the NYSE by a 1.57-to-1 ratio. On the Nasdaq, a 1.38-to-1 ratio favored declining issues.
Confusion on Middle East Peace Deal
On Aug, 6, Iranian state news outlet Fars reported that an Iranian parliamentary committee is reviewing and considering a preliminary bill for barring ships of the United States, Israel and other hostile countries from passing through the Strait of Hormuz.
The U.S. authority rejected any such conditions. CNBC quoted, citing a U.S. official, “Any temporary routes will be without any impediments — meaning no approvals or permissions and no tolls or charges.”
Following these developments, crude oil prices rose. The U.S. benchmark — West Texas Intermediate — futures settled up 2.8% at $77.29 per barrel. The international benchmark — the Brent — rose 3.8% to settle at $82.49 per barrel.
Soft Earnings Results
Axon Enterprise Inc. AXON reported second-quarter 2026 adjusted earnings of $1.88 per share, down 13.8% year over year. The figure missed the Zacks Consensus Estimate of $1.89. Total revenues were $904.4 million, up 35.3% year over year and ahead of the consensus estimate of $868.4 million.
Honeywell Aerospace Inc. HONA reported second-quarter 2026 adjusted earnings of $1.87 per share, which missed the Zacks Consensus Estimate of $2.07. The bottom line declined 32% from the year-ago quarter. Sales rose 5% year over year to $4.52 billion but missed the consensus estimate of $4.67 billion.
Consequently, stock prices of Axon and Honeywell Aerospace tumbled 14.3% and 23.2%, respectively. Both stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Department of Labor reported that initial claims decreased by 1,000 to 199,000 for the week ended Aug. 1, marginally above the Zacks Consensus Estimate of 198,000. The previous week’s data was revised marginally upward to 198,000 from 194,000 reported earlier.
Continuing claims (those who have already received government aid and reported a week behind) increased 24,000 to 1.801 million for the week ended July 25. The previous week's level was revised downward by 5,000 to 1,777,000 from 1,782,000 reported earlier.
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