US stocks retreated from record levels Thursday as investors weighed the unresolved diplomatic standoff between Washington and Tehran against a fresh batch of corporate earnings reports. The S&P 500 slipped from its all-time high as caution replaced the optimism that had driven recent gains.

The stalemate between the US and Iran kept geopolitical risk elevated, pushing oil prices sharply higher. Crude jumped as markets factored in the possibility of supply disruptions should tensions escalate further. Energy costs have become a focal point for investors already concerned about sticky inflation and Federal Reserve policy.

Investors pored over quarterly results from major corporations, seeking clarity on how businesses are navigating the current environment. Higher energy prices could squeeze margins for companies across multiple sectors, adding another variable to an already complex earnings season. The market's pullback reflects a pause rather than a reversal, with investors waiting for clearer signals on both the geopolitical and corporate fronts.