U.S. stocks were trading lower in the afternoon session on Thursday, with the Dow Jones Industrial Average falling 368.11 points, or 0.68%, to 53,981.01. The Nasdaq Composite declined 41.35 points, or 0.16%, to 26,322.09, while the S&P 500 Index slipped 20.30 points, or 0.26%, to 7,703.25.

Traders are closely watching developments in the Middle East, as a deal to reopen the Strait of Hormuz is reportedly progressing. Meanwhile, Wall Street is also digesting a heavy flow of corporate earnings reports.

Salesforce.com shares dropped 3.8% after the company announced a leadership restructuring. Syndax Pharmaceuticals shares fell 5.1%, as the storage company's fourth-quarter fiscal results failed to impress investors. Additionally, AppLovin Corporation plunged 19% on mixed quarterly results, and Western Digital declined 10% after its first-quarter fiscal outlook disappointed investors, though its fourth-quarter results exceeded expectations.

"After a bout of active trading sparked by earnings season, the market appears to be mostly taking a breather," said JJ Kinahan, head of retail expansion and alternative investment products at the Chicago Board Options Exchange. "Better-than-expected profits and sales, when paired with weak guidance, don't always push stock prices higher."

"Some profit-taking may also be at play," he added, noting that Syndax Pharmaceuticals and Western Digital have both surged significantly over the past year. Over the last 12 months, Syndax Pharmaceuticals has skyrocketed 3,000%, while Western Digital has surged more than 530%.

Oil prices edged higher as market attention focused on the Middle East, with Iran and Oman reportedly nearing an agreement to reopen the Strait of Hormuz. An Iranian government official told MS NOW that, under a provisional deal, shipping through the strait would be free of tolls or fees.

"Markets have seen many false dawns in this conflict," wrote Deutsche Bank strategist Jim Reid. "While the details are becoming more concrete, the focus is shifting from whether a deal can be reached to what the final arrangement will look like, including unresolved issues such as whether Iran will ultimately be allowed to impose tolls on vessels using the strait."