The Dow Jones industrial average fell around 25 points after briefly dropping more than 100 points, with Home Depot contributing the most losses. Helping the index cut losses were shares of Caterpillar, which rose 0.6 percent after Bank of America upgraded the stock to buy from neutral.
The Nasdaq composite pulled back about 0.2 percent.
Investors kept an eye on retailers Thursday as they braced for the release of April retail sales. Economists polled by Reuters expect an increase of 0.6 percent.
"The latest trend in retailing is not a surprise to investors this year," said Jack Ablin, chief investment officer at BMO Private Bank, in a Thursday note. "Consumers, increasingly comfortable with buying a wider selection of goods online, have opted for price and convenience of the Internet."
Social media company Snap also reported quarterly results, marking the first time doing so since going public. Snapchat's parent company reported sales of $150 million, with Reuters estimating a loss of 20 cents a share. The disappointing results sent the stock reeling 21.5 percent.
The major equity indexes had traded in a narrow range while holding near record levels recently. The S&P and Nasdaq posted all-time closing highs on Wednesday.
"The SPX has met resistance at its March high, a breakout above which would yield an impressive long-term measured move projection of approximately 2640," Katie Stockton, chief technical strategist at BTIG, said in a note to clients Thursday. "The consolidation phase is allowing the market to absorb short-term overbought conditions without a significant loss of momentum."
Wall Street has been eagerly waiting for the Trump administration to move forward with tax reform. Equities rallied sharply after President Donald Trump's election on hopes it would bring lower corporate taxes.
"There's a pervasive lack of selling," said Bruce Bittles, chief investment strategist at Baird. Nobody wants to pay the capital gains [taxes] if they think they're going to be lower later in the year."
"There isn't a lot of buying pressure either since valuations are so stretched," Bittles said.
In economic news, the producer price index rose 0.5 percent in April, more than the expected increase of 0.2 percent. Initial jobless claims, meanwhile, totaled 236,000, below the expected 245,000.
Treasury yields perked up after the data releases but quickly gave up their slight gains. The benchmark 10-year note yield slipped to 2.40 percent and the short-term two-year note yield traded near 1.343 percent.