US stocks fell Thursday as Wall Street assessed an unexpected decline in jobless claims, complicating the calculus for interest rate cuts amid uncertainty about Federal Reserve unity on policy.
The Dow Jones Industrial Average (^DJI) dipped about 0.3%, and the S&P 500 (^GSPC) lost 0.6%. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) fell 0.9%. The declines come after the major gauges closed lower for a second day Wednesday.
Markets are putting the brakes on stocks’ recent record-breaking rally amid debate over whether AI fervor is stretching valuations too much.
At the same time, the uplift from the Federal Reserve’s switch to lowering rates is fading, as signs of division among policymakers dent hopes for another two cuts this year.
In a positive sign for the labor market, jobless claims data released Thursday showed that the number of Americans filing for unemployment dropped to 218,000 for the week ending Sept. 20 from 232,000 previously. Continuing claims also fell slightly to 1.92 million.
Meanwhile, US second quarter GDP rose to an annualized pace of 3.8%, rebounding from a 0.6% decline in Q1 and above estimates for a 3.3% rate of growth. Thursday’s docket also brings readings on personal consumption and existing home sales, among other economic data.
That sets the stage for Friday’s release of the Personal Consumption Expenditures index, the Fed’s preferred gauge of inflation. The PCE print for August is expected to show an easing in price pressures, which could make a case for a shift in rate policy.
In corporates, Costco (COST) is expected to report its quarterly results after the bell on Thursday. Investors expect to see a jump in sales as shoppers pursue deals amid economic uncertainty.
LIVE 13 updates
-
US stocks fall at the open
US stocks fell at the open on Thursday, extending declines after two consecutive days of losses.
The Dow Jones Industrial Average (^DJI) dropped about 0.3%, and the S&P 500 (^GSPC) lost 0.6%. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) sank 0.9%.
The declines come as fresh data from the US Department of Labor showed jobless claims unexpectedly falling last week, complicating the narrative of a weakening labor market that has been fueling the case for further interest rate cuts from the Federal Reserve.
-
Starbucks announces plans to cut another 900 jobs and close more stores as its turnaround struggles continue
-
US economy rebounds in Q2 at 3.8% annualized rate
Data from the Bureau of Economic Analysis on Thursday showed the US economy grew at its fastest pace since 2023 in the second quarter.
Real gross domestic product (GDP) increased at an annual rate of 3.8%, a dramatic rebound from the 0.6% drop in the first quarter and above estimates for 3.3% growth.
The effects of the Trump administration’s trade policies have skewed GDP readings somewhat. For instance, the first quarter decline primarily reflected a surge in imports, which are subtracted from GDP, the Commerce Department said.
-
US jobless claims unexpectedly dip
Jobless claims in the US unexpectedly fell to 218,000 in the week that ended Sept. 20 from 232,000 the previous week, according to data from the Department of Labor released Thursday morning.
The 218,000 initial unemployment insurance claims were also lower than the 221,000 claims in the same week last year.
Economists tracked by Bloomberg had expected jobless claims to rise to 233,000 last week amid widening cracks in the labor market. Those cracks have featured heavily in discussions over the Fed’s path to interest rate easing, as officials on the central bank’s board of governors have expressed dissenting opinions over such rate cuts moving forward.
-
Stock market frothiness might just be a new normal
Historic parallels suggest Wall Street stocks are teetering on the edge, but the S&P 500 (^GSPC) trades like it’s the new risk-free rate, Yahoo Finance’s Hamza Shaban reports.
He writes in the takeaway from today’s Morning Brief:
Read more here.
-
CarMax stock slides after Q2 earnings miss
Shares of CarMax (KMX) fell 12% in premarket after the used-car dealership chain’s quarterly results came in significantly short of Wall Street estimates.
The company’s CEO, Bill Nash, described the second quarter as “challenging” in a statement alongside the second quarter report.
CarMax posted Q2 earnings per share of $0.64, compared with the $1.03 expected by analysts. Revenue also missed the mark, coming in at $6.59 billion versus the $7.05 billion estimated in a Zack’s survey and $7.01 billion in the year-ago quarter.
-
White House amps up shutdown stakes with threats of mass firings
The White House budget office directed federal agencies to devise plans to permanently reduce their workforces if the government shuts down next week, raising the stakes of an outcome that looks increasingly likely by the day.
Politico reports that the White House memo targets “employees who work for programs that are not legally required to continue.”
More:
The shutdown, set for 12:01 a.m. next Wednesday, represents an increasingly present threat to markets. President Trump this week scrapped a planned meeting with Democrats, who are seeking an extension of healthcare subsidies under the Affordable Care Act to be included in a spending bill.
Reuters has a good explainer on how shutdowns affect markets.
-
‘Security from what?’: The unanswered questions about how Trump’s TikTok deal will work
Three milestones in the months ahead will determine how smoothly China might be able to spin off TikTok — amid questions about Oracle’s (ORCL) role as security provider.
Yahoo Finance’s Ben Werschkul reports:
Read more here.
-
Intel stock pops on report it’s looking to Apple for investment
Shares in Intel (INTC) are up over 3% in premarket trading, set to build on the prior day’s jump, after Bloomberg reported the US chipmaker is in discussions with Apple (AAPL) for an injection of funds.
Bloomberg reports:
Read more here.
-
Good morning. Here’s what’s happening today.
-
Premarket trending tickers: Intel, Hertz and Qualcomm
Here’s a look at some of the top stocks trending in premarket trading:
Intel (INTC) stock rose more than 3% in premarket trading on Thursday following news it had approached Apple (AAPL) about securing investment. Nvidia (NVDA) announced this month it will invest $5 billion in Intel.
Hertz (HTZ) shares jumped 4% before the bell after announcing it will raise capital by selling $250 million exchangeable senior notes.
Qualcomm (QCOM) stock fell 1% in premarket trading on Thursday. The group announced a series of new chips for PCs and phones the day prior.
-
Call of the morning: Redburn drops a Sell on Oracle
As a former analyst, I love gutsy calls on stocks. My vibe was often to go against the grain where it made sense. Sometimes it worked, sometimes it didn’t — it was fun either way.
I have to give Redburn’s Alex Haissl a shout-out this morning for dropping a Sell rating on one of the hottest stocks of the year, Oracle (ORCL). Haissl makes a compelling case to take profits in Oracle, in a new 59-page report shared with me.
Here’s his overall thesis:
Haissl slapped Oracle with a $175 price target, assuming 42% downside from current levels.
-
China tech stocks rise with record win streak in view
Chinese tech stocks extended their rally on Thursday as investors stayed enthusiastic for the country’s AI developers.
Bloomberg reports:
Read more here.
