US stocks fell on Thursday as stronger-than-expected economic data cast doubt over the pace of future Federal Reserve rate cuts. The Dow Jones Industrial Average slipped 0.4%, the S&P 500 dropped 0.7% and the Nasdaq Composite slid by the same amount, with Tesla losing around 4% and Oracle extending recent declines.
The pullback marked a third straight day of weakness for Wall Street, following a run of record highs earlier in the month. Analysts say enthusiasm around artificial intelligence has fuelled stretched valuations in Big Tech, while the Fed’s shift to easier policy is no longer offering the same tailwind amid uncertainty over whether policymakers will deliver more than one additional cut this year.
Thursday’s jobless claims figures offered a bright spot for the labour market. Initial claims fell to 218,000 in the week ending 20 September, down from 232,000 the week before. Continuing claims also edged lower, to 1.92 million. The numbers suggested ongoing resilience in employment despite a broader slowdown.
Elsewhere, US second-quarter GDP was revised sharply higher, showing annualised growth of 3.8%. That compared with a 0.6% contraction in the first quarter and comfortably exceeded expectations for a 3.3% expansion. The stronger data complicates the Fed’s task, with investors now eyeing Friday’s release of the Personal Consumption Expenditures index, the central bank’s preferred inflation gauge. Any further cooling in consumer prices could reinforce the case for cuts, while another hot reading would likely stall momentum.
Corporate news was thinner, though Costco was set to report earnings after the close. The retailer is expected to post a sales boost as cost-conscious shoppers seek out discounts against an uncertain economic backdrop.
