Dow Jones retreats from near-record levels, futures drag on oil rebound, Iran developments

Benchmark indices on Wall Street ended lower on Thursday, May 7, after opening significantly higher but later went on to give up gains as uncertainties over the US-Iran peace deal sent oil prices rebounding from lower levels yet again.

The Dow Jones, which crossed the 50,000 mark intraday and came within 400 points of its record high, fell over 550 points from the day's high to end with losses of 300 points. The S&P 500 and Nasdaq, which made intraday record highs of their own earlier in the session, also reversed course and ended the day below the flatline.

Equities reversed course after oil prices rebounded on reports of the US and Iran exchanging fire again in the Persian Gulf, with each side blaming the other for initiating the aggression. While the US Central Command says no US assets were harmed, Iran's military via its state media said that it fired at US ships in retaliation, causing significant damage.

Brent crude closed above the mark of $100 having slipped below those levels early Thursday, while the US crude is trading with gains of over 2.5% in Asian trading on Friday.

When US President Donald Trump was asked by ABC News about the recent firing, he responded by saying that it was just a "love tap" and that the ceasefire still remains in place. There are also reports by the Wall Street Journal that Project Freedom, an initiative by the US to escort stranded ships safely through the Strait of Hormuz, could resume again after Saudi Arabia and Kuwait lifted their restrictions on the US using their airbases.

The reported "48-hour deadline" for Iran to respond to the US proposal to end the war ends today. Iran's foreign ministry spokesperson said that the US plan is "still being reviewed", with another official saying that the Strait will not open on "unrealistic proposals" by the US.

The big trigger for the day, apart from the Iran developments will be the jobs report for April, which will be released later this evening. Experts forecast an increase of 62,000 in the month gone by, with the private payrolls already having increased by 1,09,000 as per ADP data released earlier this week.