US indices retreat from their record highs on profit taking and cautions sentiment

Wall Street came under pressure on Wednesday, with the S&P 500 falling 0.7%, the Nasdaq declining 0.8%, and the Dow Jones Industrial Average dropping more than 600 points. Rising oil prices and Treasury yields weighed on sentiment after tensions between the U.S. and Iran intensified.

U.S. stock futures moved lower early Thursday after the S&P 500 ended its nine week winning streak, as investors reacted to escalating geopolitical tensions in the Middle East and a sharp rise in oil prices. S&P 500 futures fell 0.4%, Nasdaq 100 futures lost 0.5%, while Dow futures traded little changed.

Technology stocks also faced pressure after Broadcom fell sharply in after hours trading. Investors are now awaiting key economic data including productivity figures, unit labor costs, and weekly jobless claims, which could provide further clues about the health of the U.S. economy.

Asia-Pacific markets traded lower on Thursday, following losses on Wall Street as escalating tensions between the United States and Iran continued to support higher oil prices and raise concerns about inflation and global economic growth.

Japan led the regional decline, with the Nikkei 225 falling 1.7% after reaching a record high in the previous session, while the Topix lost 1%.

Oil prices edged lower on Thursday as signs of diplomatic progress in the Middle East improved market sentiment. Brent crude slipped to around $97 per barrel, while WTI crude fell to about $95 per barrel after both benchmarks had gained roughly 2% the previous day. The earlier rally was driven by escalating hostilities, including Iranian attacks on Kuwait and U.S. military strikes near the Strait of Hormuz.

Gold prices held above a one week low on Thursday but struggled to build upward momentum. A modest pullback in the U.S. dollar provided some support. However, gains in gold remained limited as negotiations between the United States and Iran continue to face significant obstacles.

At the same time, higher oil prices are fueling concerns that inflation could remain elevated, reinforcing expectations that the Federal Reserve may keep interest rates higher for longer.