Escalating geopolitical concerns drove US stocks lower and extended the rally in oil prices. The S&P 500 pared losses in late trading to close down 0.3%, but nearly 300 of its constituent stocks still finished in negative territory.
Cautious sentiment prevailed, leading the S&P 500 to decline after a recent rebound from a sell-off in technology shares.
A conservative earnings outlook pressured Walmart, although the retail giant's US same-store sales exceeded expectations.
Deere & Co. shares jumped 12% to a record high after the world's largest agricultural machinery manufacturer raised its full-year profit forecast, anticipating a long-awaited upturn in the farm economy.
Carvana Co. fell 8% as the company showed signs of "growing pains" amid its rapid expansion push, with rising costs in the latest quarter eroding margins and causing a sharp drop in its stock price.
Blue Owl Capital Inc. shares plunged after the company decided to limit redemptions from one of its private credit funds, sparking fresh concerns about hidden risks in the $1.8 trillion market. Other alternative asset managers, including Ares Management Corp., Apollo Global Management Inc., and TPG Inc., also saw their shares decline.
Former President Donald Trump stated that the US must "reach a meaningful agreement" with Iran, adding that the next 10 days would be decisive. He noted that while officials are holding "good talks," Iran remains a "hot spot" issue.
The US military is deploying significant force to the Middle East, including two aircraft carriers, fighter jets, and refueling aircraft. This provides the administration with options for a major military strike while pressuring Iran to negotiate an agreement on its nuclear program.
Dennis Follmer of Montis Financial suggested that with Iran's military proxies significantly weakened and its economy in crisis, the country is in a weaker negotiating position, leading markets to anticipate a diplomatic resolution.
"Currently, US stocks are not pricing in tensions between the US and Iran. That seems reasonable," he said.
At the close, the S&P 500 was down 0.28% at 6,861.89 points.
The Dow Jones Industrial Average fell 0.54% to 49,395.16 points.
The Nasdaq Composite declined 0.31% to 22,682.73 points.