US stocks fell on Thursday as losses in Oracle and Nvidia combined with a rise in Treasury yields to weigh on sentiment.
The S&P 500 declined 0.8%, while the Nasdaq Composite dropped 1.2%.
The Dow Jones Industrial Average lost 171 points, or 0.4%. Oracle and Nvidia extended recent declines, sliding nearly 6% and about 2% in early trading.
Both stocks were on course for a third consecutive daily loss amid renewed doubts over the durability of the artificial intelligence trade.
Oracle, which had been a major driver of the latest market rally, has now fallen more than 10% from its recent peak.
The latest drop was fueled in part by a new sell rating from Rothschild Redburn, which projected a 40% pullback and argued that investors are “materially overestimating” the impact of the company’s AI deals on its cloud business.
Higher bond yields added pressure, prompting investors to pare back exposure to technology shares.
The 10-year Treasury yield climbed toward 4.19% after unemployment claims data came in stronger than expected.
Investors are also bracing for Friday’s release of the personal consumption expenditures price index and keeping an eye on the risk of a potential government shutdown.
Jobless claims fall
Initial applications for US unemployment benefits fell to their lowest level in more than two months, highlighting companies’ reluctance to cut jobs even as broader economic conditions show signs of strain.
The Labor Department reported on Thursday that claims declined by 14,000 to 218,000 in the week ending September 20, the lowest since mid-July.
The figure was well below both the Bloomberg survey forecast of 233,000 and the Dow Jones consensus of 235,000.
The prior week’s total was revised up slightly to 232,000, underscoring the volatility in weekly readings.
Still, the broader trend looks resilient, with the four-week moving average easing to 237,500.
US GDP revised upwards
The US economy’s rebound in the second quarter was stronger than previously reported, and signs suggest momentum carried into the third quarter, highlighting the resilience of the world’s largest economy.
The Commerce Department said Thursday that gross domestic product rose at the rate of 3.8% from April through June, the third and final estimate.
This revised figure exceeds both the 3.3% second estimate and the initial 3% reading.
The revised figures come a week after the Federal Reserve lowered borrowing costs for the first time this year, citing a notable slowdown in the labour market.
Policymakers have indicated that further cuts are possible, though they stressed decisions will hinge on incoming economic data.
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