US stocks eased further from recent record highs on Thursday as energy shares dropped along with oil prices and investors continued to digest comments by Federal Reserve chairman Jerome Powell. The energy index was down the most among the major S&P sectors, falling 1.71 per cent and extending its recent slide. US oil prices slid more than 2 per cent on fears of oversupply.

Powell’s comments on Wednesday that a decline in inflation this year could be due to transitory factors dampened some investors’ hopes that the US central bank could move later this year to cut interest rates, market watchers said. Traders lowered their bets on a rate cut this year following Powell’s comments, and stocks fell, but many investors said the Fed’s stance makes sense.

The S&P 500’s recent run to record highs also may be giving investors reasons to pause. The index has rallied more than 16 per cent this year and is entering a period of the year traditionally known as being difficult for equities over the next six months.

On the day, the Dow Jones Industrial Average fell 122.35 points, or 0.46 per cent, to 26,307.79, the S&P 500 lost 6.21 points, or 0.21 per cent, to 2,917.52, and the Nasdaq Composite dropped 12.87 points, or 0.16 per cent, to 8,036.77.

With the first-quarter earnings season winding down, investors are looking for fresh catalysts such as US-China trade developments and economic data. Markets also are waiting for a reading of the Labor Department’s non-farm payrolls data on Friday that is expected to show fewer job additions last month compared with March