The S&P 500 pulled back from record highs on Thursday as investors weighed renewed tensions between the U.S. and Iran, though Polymarket traders continued to bet on another positive start for equities heading into Friday's session.

The benchmark index closed down 0.38% at 7,337.11, after touching a fresh intraday high earlier in the day. Despite the decline, the May 8 Polymarket contract showed an 87% probability of the S&P 500 opening higher on Friday.

Iran Tensions Return To Focus

Oil prices rose after the U.S. and Iran exchanged fire in the waterway, with both sides accusing the other of initiating the attack. U.S. Central Command said American forces intercepted "unprovoked Iranian attacks" while escorting Navy destroyers through the strait.

President Donald Trumplater said on Truth Social that there was "no damage done to the three Destroyers, but great damage done to the Iranian attackers," while describing the military response as "just a love tap" and insisting the ceasefire remained in effect.

Earnings And Jobs Data In Focus

Still, S&P 500 futures are up 0.41% in early trading, even as geopolitical tensions flared again in the Strait of Hormuz.

Markets are also looking ahead to the April jobs report due Friday morning. Economists polled by Dow Jones expect payroll growth of 55,000 to 65,000 and an unemployment rate of 4.3%.