* Indexes down: Dow 0.87%, S&P 500 0.45%, Nasdaq 0.41%

* FedEx ( FDX ), UPS dip after Amazon ( AMZN ) opens up its logistics

network

* Ebay ( EBAY ) rises after GameStop's ( GME ) buyout bid

(Updates with afternoon trading)

By Niket Nishant and Utkarsh Hathi

May 4 (Reuters) - Wall Street's main indexes declined on

Monday after conflicting reports about a U.S. warship near the

Strait of Hormuz led to heightened tensions in the Middle East,

dampening optimism from the previous week's earnings.

Tehran said it had forced a U.S. warship to turn back after

it attempted to enter the Strait of Hormuz. Iran's semi-official

Fars news agency said two missiles had hit the warship, but the

United States denied the report.

The United Arab Emirates also said it had intercepted three

missiles fired from Iran over its territorial waters, with a

fourth one crashing into the sea.

The turmoil was enough for investors to pause following a

strong earnings run last week, as they assessed the aggressive

rhetoric between Washington and Tehran and the risk of renewed

escalation.

The conflict, now in its third month, has continued to weigh

on the global economy as oil prices stay elevated. Brent crude

futures rose 5.4% on Monday and are trading above $114 a

barrel.

"The longer oil prices stay elevated above $100 a barrel,

the more the fiscal stimulus from the tax cuts passed in 2025

shifts from being a stimulus to acting as a shock absorber,"

said Brock Weimer, analyst, investment strategy, at Edward

Jones.

At 12:00 p.m. ET, the Dow Jones Industrial Average

fell 429.90 points, or 0.87%, to 49,069.37, the S&P 500

shed 32.63 points, or 0.45%, to 7,197.49, and the Nasdaq

Composite lost 101.96 points, or 0.41%, to 25,012.49.

"After a 10% gain in the S&P 500 in April, a period of

consolidation is reasonable to expect, and perhaps a slower pace

of gains over the next couple of weeks," Weimer said.

Ten of the 11 main S&P sectors were in the red. The CBOE

Volatility Index, Wall Street's "fear gauge", was up 1.44

points at 18.39.

Markets are also bracing for a historically weaker six-month

stretch for stocks starting in May. Since 1945 through April

2026, the S&P 500 has gained an average of about 2% from May to

October, according to data from Fidelity. That compares with an

average gain of about 7% from November through April.

"Seasonal patterns can offer useful historical perspective,

but they aren't always a reliable guide for what lies ahead,"

said Adam Turnquist, chief technical strategist at LPL

Financial.

"An easing of tensions in the Middle East and a pullback in

oil prices could provide ongoing support for equities,

especially if earnings remain resilient."

Meanwhile, Berkshire Hathaway ( BRK/A ) reported on Saturday

that it was a net seller of stocks for the 14th consecutive

quarter. The conglomerate, often viewed as a bellwether of the

U.S. economy, is closely watched for its insight into valuations

and broader market conditions.

Separately, shares of GameStop ( GME ) slipped 8.5% while

eBay ( EBAY ) rose 5.8% after the video game retailer unveiled a

proposal to buy eBay ( EBAY ) for about $56 billion in a

cash-and-stock deal.

Shares of logistics firms FedEx ( FDX ) and United Parcel

Service ( UPS ) fell nearly 10% each after Amazon.com ( AMZN )

said on Monday it was rolling out "Amazon Supply Chain

Services", opening up its logistics network for other businesses

to use.

The duo dragged the Dow Jones Transportation Average index

to 4.3%, its lowest level in nearly a month.

Cruise operator Norwegian dropped 8.5% after

slashing its annual forecast due to higher fuel costs.

Declining issues outnumbered advancers by a 1.98-to-1 ratio

on the NYSE and a 1.29-to-1 ratio on the Nasdaq.

The S&P 500 posted 26 new 52-week highs and 17 new

lows, while the Nasdaq Composite recorded 111 new

highs and 51 new lows.