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US stocks fell on Thursday for the third session in a row as Wall Street weighed an unexpected drop in jobless claims and a sharp upgrade in GDP growth, developments that complicate the outlook for rate cuts amid uncertainty about Federal Reserve policy.
The Dow Jones Industrial Average (^DJI) dropped 0.4%, and the S&P 500 (^GSPC) lost roughly 0.5%. The tech-heavy Nasdaq Composite (^IXIC) also around 0.5%. Big Tech stocks took hits, with Oracle (ORCL) adding to recent losses and Tesla (TSLA) off over 4%.
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 well above estimates for a 3.3% rate of growth.
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.
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Stocks fall for third session in a row as Oracle drops, Fed division casts doubt over future policy
Stocks retreated for a third day in a row on Thursday as Wall Street markets assessed division among Federal Reserve policymakers while better-than-expected economic data put expected rate cuts at risk.
The Dow Jones Industrial Average (^DJI) dropped 0.4% while the S&P 500 (^GSPC) fell 0.5%. The tech-heavy Nasdaq Composite (^IXIC) slid around 0.5%. Tech stocks declined as Oracle (ORCL) slid on the heels of an analyst Sell rating.
A better-than-expected GDP print released this morning, along with a drop in jobless claims, made the Federal Reserve’s policy decision for next month less predictable.
Investors will examine the Personal Consumption Expenditures index, the Fed’s preferred gauge of inflation, on Friday.
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Intel jumps nearly 10% as chipmaker seeks Apple investment
Intel (INTC) stock was up 10% on Thursday afternoon as investors cheered the chipmaker’s attempt to seek investments from iPhone maker Apple (AAPL) in order to work closer together, though Wall Street is wary of such a collaboration.
Bernstein analyst Stacy Rasgon said it’s unlikely a tie-up (beyond an investment) would materialize anytime soon.
Rasgon said it’s “unlikely” Apple would collaborate with Intel to co-design a chip for its computers or shift to producing its in-house chips in Intel’s factories rather than TSMC’s, writing “a foundry agreement with Intel seems very premature.”
Intel passed on an offer to make chips for Apple’s first iPhones in the early 2000s.
Apple moved ahead with its own Arm-based (ARM) chips for personal computers that are manufactured by Intel’s contract manufacturing rival, Taiwan-based TSMC (TSM).
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Goldman CEO on Trump’s call for semiannual earnings reports: ‘I didn’t know it was something I needed to think about’
Yahoo Finance’s David Hollerith reports:
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Gold, silver rise as rest of market slumps
Few corners of the market were in green territory on Thursday as stocks headed toward their third consecutive fall this week.
Among the outliers, gold (GC=F) rose slightly to hover above $3,770 per ounce. Silver (SI=F) also gained 2% to jump above $45 per ounce.
Gold is up more than 40% year to date, while silver is up 55% during the same period.
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Bitcoin falls below $110,000 as ‘cautious tone’ sweeps over market
Yahoo Finance’s Ines Ferré reports:
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Tesla stock drops after Europe sales collapse in August
Tesla stock (TSLA) fell 3% after the company’s EV sales declined in Europe for the eighth straight month.
Yahoo Finance’s Pras Subramanian reports that, according to the European Automobile Manufacturers’ Association (ACEA), Tesla EV registrations (a proxy for sales) in Europe fell to just 14,831 units in August, a 22.5% drop compared to a year ago. Meanwhile, total EV registrations in the region rose 26.8% in August.
Sales fell sharply in Sweden and Denmark, whereas Norway offered a lone bright spot, with sales up nearly 22%.
Tesla’s pains in Europe have grown as stiff competition from Chinese EV makers and the unpopularity of CEO Elon Musk have hurt the brand. A new survey from research firm Escalent found that car buyers in Europe were more likely to consider purchasing a vehicle from China than from the US, with the US’s tariffs and trade policies playing a role.
Despite a rough 2025, shares remain positive year to date, though Tesla’s 6% gain since the beginning of the year trails the S&P 500’s 12% return so far.
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Costco earnings on deck: Sales in focus as shoppers look for value
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:
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Lithium Americas stock surges for 2nd day
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.
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Fed rate divide deepens as policymakers disagree about more cuts
Yahoo Finance’s Jennifer Schonberger reports:
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CoreWeave strikes $6.5 billion deal with OpenAI to power next-gen AI models
Yahoo Finance’s Jake Conley reports:
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Intel needs ‘capability’ more than money: Analyst
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.
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Falling mortgage rates haven’t lifted home sales much yet
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Oracle extends losses as Redburn analyst initiates coverage with Sell rating
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.
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IBM stock rises as HSBC touts its quantum computers for forecasting
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.
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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.
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Starbucks announces plans to cut another 900 jobs and close more stores as its turnaround struggles continue
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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.
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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.
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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:
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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.
