Stock market today: Dow, S&P 500, Nasdaq fall amid sharp GDP expansion, jobless claims dip

Costco (COST) is set to report its fourth quarter earnings results after market close on Thursday as it navigates a choppy consumer landscape, tariff-related pressure, and competition from peers like Walmart’s (WMT) Sam’s Club.

Yahoo Finance’s Brooke DiPalma reports:

Read more here.

Lithium Americas (LAC) surged another 20% in trading on Thursday, one day after the stock nearly doubled in value.

The gains come as the Trump administration is apparently seeking a stake for the US in the operator of what is set to be the largest lithium mine in the country.

As Yahoo Finance’s Jake Conley detailed yesterday:

Yahoo Finance’s Jennifer Schonberger reports:

Read the full story here.

Yahoo Finance’s Jake Conley reports:

Read more here.

Intel (INTC) is reportedly in talks with Apple (AAPL) to have the iPhone maker invest in the company and for the two companies to work more closely together. But Bernstein analyst Stacy Rasgon said it’s unlikely a collaboration (beyond an investment) would materialize anytime soon.

He noted that Apple moved from Intel’s chips years ago to make its own Arm-based (ARM) chips for personal computers (PCs) that are manufactured by Intel’s contract manufacturing rival, Taiwan-based TSMC (TSM).

Intel also famously passed on an offer to make chips for Apple’s first iPhones in the early 2000s.

Rasgon said it’s “unlikely” Apple would collaborate with Intel to co-design a chip for PCs or shift to producing its in-house PC chips in Intel’s factories rather than TSMC’s, writing “a foundry agreement with Intel seems very premature.”

Intel designs computing chips and leads the market for CPUs (central processing units) for data centers and PCs, but its market share has eroded in recent years as AMD (AMD) and Arm have gained ground.

Intel has always produced chips for itself, but its internal manufacturing business began to fall behind technologically over the past decade. In 2021, the company opened that business to outside customers, launching Intel Foundry Services, in a bid to breathe new life into its factories.

That hasn’t worked so far: Intel Foundry Services’ losses ballooned to $13 billion in its 2024 fiscal year from $7 billion in 2023, and those losses helped send Intel’s stock plunging 60% last year.

Last week, Nvidia (NVDA) announced it would take a $5 billion stake in Intel, following the US government’s $9 billion investment in the struggling company in August.

“Hence what Intel really needs is CAPABILITY, which would allow them to attract customers that would allow them to fill the capacity that the money might help them build,” Rasgon wrote. “But their capability issue have nothing to do with money; they will have to figure that out on their own.

Oracle (ORCL) shares fell more than 4% Thursday as Alex Haissl, an analyst with investing firm Rothschild & Co Redburn, initiated coverage of the stock with a Sell rating.

Haissl said Oracle’s recent five-year revenue guidance for its cloud business (OCI) that sent the stock soaring is a risk, writing that “the market is already pricing in a risky blue-sky scenario that is unlikely to materialise,” per Bloomberg. He set a $175 price target on the stock, while shares traded around $297 on Thursday.

The decline in Oracle shares follows a nearly 2% dip from the previous trading session as the software giant sold $18 billion US investment-grade bonds.

Oracle’s bond sale came as the rising AI cloud firm rushes to build AI infrastructure for its clients, which range from OpenAI (OPAI.PVT) and Meta (META) to Elon Musk’s xAI (XAAI.PVT). As of this summer, Oracle was leading a record data center leasing pipeline in the US as tech giants go all in on AI infrastructure, according to TD Cowen analysts.

Earlier this week, Oracle was named as an investor to take part in the US-China TikTok deal, and the company also named two new co-CEOs in an executive leadership shake-up.

IBM (IBM) shares rose over 3% Thursday as its customer HSBC (HSBC) said it has improved its ability to predict market behavior when using IBM’s quantum computers.

The London-based bank said it has integrated IBM’s Quantum Heron — its latest quantum chip — with classical and AI computers.

“By using quantum computers to model the European market at different points in time, and feed better data to its AI workflow, HSBC saw a 34 percent reduction in the errors made by its algorithm,” a spokesperson for IBM told Yahoo Finance.

HSBC claims this is the first empirical evidence of quantum computers delivering measurable value for a real-world financial services problem.

“This is a ground-breaking world-first in bond trading,” HSBC ‘s head of quantum technologies, Philip Intallura, said in a statement. “It means we now have a tangible example of how today’s quantum computers could solve a real-world business problem at scale.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.