The S&P 500 shed 0.41% to end the session at 7,200.75 points

The U.S. stock market closed lower on Monday, with the S&P 500 pulling back from record highs, after a ​South Korean ship was hit in the Strait of Hormuz and Tehran demonstrated its grip on ‌Middle East oil, dampening optimism about strong first-quarter earnings reports.

The S&P 500 shed 0.41% to end the session at 7,200.75 points.

The Nasdaq slipped 0.19% to 25,067.80 points, while the Dow Jones Industrial Average slid 1.13% to 48,941.90 points.

Energy stocks rose after reports of the latest confrontations. An explosion reported aboard a South Korean merchant ship appeared likely to persuade commercial shippers the strait was still unsafe after U.S. president said the country’s navy would open it.

Tehran forced a U.S. warship to ​turn back after it attempted to enter the strait, while the United Arab Emirates reported a fire at an oil ​installation following a reported Iranian attack.

The renewed nervousness about the Middle East war comes after the S&P 500 ⁠and Nasdaq hit record highs last Friday amid a stronger-than-expected quarterly earnings season.

With the market at all-time highs, there’s not a lot of ​room for error, and it feels like the kind of big asymmetric risk is still to the downside, even if it’s maybe not the ​most probable outcome that we get back into a hot war, said Ross Mayfield, an investment strategist at Baird Private Wealth Management.

S&P 500 companies are expected to post aggregate earnings growth of 28% year/year for the first quarter, double the expectation of 14% at the start of April, according to LSEG. Wall Street’s ​AI heavyweights account for much of that optimism.

Berkshire Hathaway reported on Saturday that it was a net seller of stocks for the 14th consecutive ​quarter. Investors closely watch the conglomerate, often viewed as a bellwether of the U.S. economy, for its insight into valuations and broader market conditions.

Shares of GameStop dropped 10% ⁠and eBay rose nearly 5% after the video game retailer unveiled a proposal to buy the online marketplace for around $56 billion in a cash-and-stock deal. GameStop’s stock market value is nearly $11 billion.