The S&P 500 fell 0.4% and halted a weekslong rally that had erased all its losses because of the war and then carried it to all-time highs. The Dow Jones Industrial Average dipped 179 points (0.4%) while the Nasdaq composite dropped 0.9% from its own record.

In the oil market, prices leaped as uncertainty built about what will happen with the Strait of Hormuz. A ceasefire is still in place between the United States and Iran, but oil tankers in the Persian Gulf aren't able to get through the narrow waterway off Iran's coast and deliver crude to customers.The U.S. military on Thursday seized another tanker associated with the smuggling of Iranian oil, a day after Iran's paramilitary Revolutionary Guards took control of two vessels in the strait. President Donald Trump also said Thursday he ordered the U.S. military to 'shoot and kill' Iranian boats that deploy mines to gum up traffic in the strait.

Investors shifted focus to Tesla's sharp rise in forecasted capital spending this year, driven by factory builds for robots and other products. Elon Musk assured investors late Wednesday of a very significant increase in capital expenditures, calling it well justified for a substantially increased future revenue stream.Brent crude for June delivery surged 3.1% to settle at $105.07, peaking above $107 amid a stock selloff that dropped the S&P 500 by 1.3% before rebounding. The July contract settled at $99.35 after hitting $101, pressuring airlines with higher fuel costs and diverging industry stocks post-earnings.

Tesla helped drag the market lower after sinking 3.6% even though it reported better results for the latest quarter than analysts expected. ServiceNow dropped even more 17.7%, even though its results for the latest quarter matched analysts' expectations. American Airlines Group rose 2.4% after reporting better profit and revenue for the latest quarter than analysts expected. Southwest Airlines lost 4.1% after reporting weaker quarterly results than analysts expected. IBM sank 8.3% despite reporting better profit and revenue for the latest quarter than expected. Paramount Skydance fell 4.5% after Warner Bros. Discovery shareholders approved selling the business to Paramount. Discovery sank 1.6%.

In stock markets abroad, indexes fell across much of Europe and Asia. Hong Kong's Hang Seng fell 0.9%, and Japan's Nikkei 225 sank 0.7% for two of the bigger losses. South Korea's Kospi climbed 0.9% after the government reported better-than-expected economic growth for the start of the year, boosted by strong exports, particularly of computer chips used in the AI boom.

In the bond market, the yield on the 10-year Treasury erased an early dip and rose to 4.32% from 4.30% late Wednesday as oil prices accelerated.