The S&P 500 ended lower on Thursday, with Intel and other chip stocks retreating after a recent rally, while uncertainty around US-Iran peace talks weighed on the wider market.

US-listed shares of Arm Holdings tumbled as worries about the company's ability to secure sufficient supplies for its new AI chip overshadowed a strong earnings forecast.

Intel and Advanced Micro Devices both declined about 3 percent, giving back some of their gains from earlier this week.

US crude futures rose as much as 3 percent in early trading on Friday after renewed hostilities broke out between the US and Iran.

West Texas Intermediate oil prices were trading up 2.6 percent at US$97.26 a barrel, after initially gaining more than 3 percent.

The US military said it carried out retaliatory strikes on Iran on Thursday, targeting sites responsible for attacking US forces.

Iran's military accused the US of violating the ceasefire between the two countries, saying the US had targeted two ships in the Strait of Hormuz and attacked civilian areas.

The WTI contract had settled down 27 cents at US$94.81 per barrel in the previous trading session.

"You can have a string of days like this, and that's not going to take away from the fact that this has been a rip-roaring quarter of recovery, driven by fundamentals," said Mike Dickson, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

Nvidia and Microsoft both climbed almost 2 percent, underscoring investor confidence in Wall Street's heavyweight AI companies.

The S&P 500 declined 0.4 percent to end the session at 7,337 points. The Nasdaq declined 0.1 percent to 25,806, while the Dow Jones Industrial Average declined 0.6 percent to 49,596.

Volume on US exchanges was heavy, with 18.3 billion shares traded, compared to an average of 17.5 billion shares over the previous 20 sessions.

Data showed the number of Americans filing claims for unemployment benefits rose less than expected last week.

After a strong private payrolls report on Wednesday, investors are awaiting more comprehensive nonfarm payrolls data on Friday, with jobs seen increasing by 62,000 in April after rebounding 178,000 in March, according to a Reuters poll of economists. (Reuters)