Wall Street ended lower Monday, with the S&P 500 retreating from record highs, after a South Korean ship was hit by an explosion in the Strait of Hormuz and Tehran demonstrated its grip on Middle East oil, dampening optimism about strong first-quarter earnings reports.

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 Donald Trump said the U.S. Navy would open it.

Tehran said it 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 an Iranian drone attack.

The renewed nervousness about the Middle East conflict 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 I/B/E/S.

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 tumbled and eBay rose after the video game retailer unveiled a proposal to buy the online marketplace for about $56 ⁠billion in ⁠a cash-and-stock deal. GameStop's stock market value is about $11 billion.

According to preliminary data, the S&P 500 lost 28.37 points, or 0.39%, to end at 7,201.75 points, ‌while the Nasdaq Composite lost 43.78 points, or 0.17%, to 25,070.67. The Dow Jones Industrial Average fell 549.79 points, or 1.12%, to 48,946.86.

Delivery firms FedEx and United Parcel Service fell after Amazon.com said it was rolling out "Amazon Supply Chain Services," opening up ‌its logistics ​network for other businesses to use.

Palantir climbed ‌ahead of the data analytics and defense software company's quarterly report after the bell.

The declines in FedEx and UPS dragged the Dow Jones Transportation Average index to its lowest level in nearly a ​month. Cruise operator Norwegian dropped after slashing its annual forecast due to higher fuel costs related to the Middle East conflict.