Wall Street Declines for Third Straight Session/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks slid Thursday, with the S&P 500 marking its third consecutive decline amid concerns the Federal Reserve may slow interest rate cuts due to stronger-than-expected economic data. Treasury yields climbed as investors adjusted expectations. Big Tech stocks and CarMax led the market lower.
Wall Street Market Update Quick Looks
- Three-Day Dip: S&P 500 falls 0.7% in early Thursday trading.
- Indexes Down: Dow dips 107 points; Nasdaq drops 1%.
- Fed Caution: Strong economic data may slow interest rate cuts.
- Treasury Yields: 10-year yield climbs to 4.17%.
- Unemployment Data: Jobless claims fall, showing labor market strength.
- GDP Revised: Spring growth stronger than first reported.
- Durable Goods: Orders exceeded economist expectations last month.
- CarMax Tumbles: Stock down 19.1% on weak Q2 earnings.
- Tech Stocks Slide: Nvidia, Alphabet, Broadcom all fall sharply.
- Starbucks Restructuring: $1B plan includes job cuts and store closures.
Deep Look: Wall Street Slips for Third Straight Day as Economic Strength Clouds Rate Cut Outlook
NEW YORK — Wall Street extended its downward slide on Thursday as major indexes fell for a third consecutive session, rattled by signs that the U.S. economy may be running hotter than expected — a development that could derail the Federal Reserve’s interest rate cutting plans.
The S&P 500 dropped 0.7% in early trading, marking its steepest decline so far this week and positioning the index for its longest losing streak in over a month. The Dow Jones Industrial Average slipped by 107 points (0.2%), and the Nasdaq composite fell 1%, reflecting deeper losses among technology stocks.
All three indexes remain near their all-time highs set earlier in the week, but momentum has quickly shifted as strong economic indicators challenge expectations for multiple Fed rate cuts.
Stronger Economy, Fewer Rate Cuts?
Markets have been buoyed in recent months by the belief that the Fed would aggressively cut interest rates following its first reduction of the year last week. Investors had priced in several additional cuts through the end of 2026.
But new economic data released Thursday suggested the Fed may not move as quickly — or as often — as hoped.
- Weekly jobless claims fell, signaling fewer layoffs.
- GDP growth for Q2 was revised upward, showing the U.S. economy grew faster in spring than initially believed.
- Durable goods orders surged last month, far exceeding forecasts.
These signs of resilience in the labor market and consumer demand are good news for the broader economy, but they complicate the Fed’s effort to ease monetary policy without reigniting inflation.
“A stronger economy gives the Fed less urgency to cut rates,” analysts noted, “and that makes the market nervous about how much more upside is left.”
Bond Yields Edge Up
The bond market quickly responded to the economic data, with investors pulling back expectations for future rate cuts. The 10-year Treasury yield ticked up to 4.17%, from 4.16% late Wednesday, while the 2-year yield — which more closely reflects Fed policy expectations — climbed even more sharply.
Rising yields often pressure stock prices, especially in tech, where future profits are more sensitive to borrowing costs.
Big Tech Leads the Drop
High-flying technology stocks, which have powered much of the market’s gains this year, were among Thursday’s biggest decliners:
- Nvidia dropped 1.8%,
- Broadcom lost 2.9%,
- Alphabet (Google’s parent company) sank 2.2%.
These losses follow growing concerns that AI-fueled optimism may have overheated valuations in the tech sector. The shift away from high-growth tech names intensified as investors reassessed risks tied to elevated interest rates.
CarMax Sinks on Earnings Miss
Outside of tech, CarMax posted the day’s worst performance in the S&P 500, plunging 19.1% after reporting quarterly earnings that missed analysts’ expectations.
The used car retailer said it sold fewer vehicles compared to a year ago and increased its projected losses from older loans — compounding concerns about consumer credit health and auto market demand.
Starbucks Unveils $1 Billion Restructuring Plan
Starbucks was also in focus after announcing a $1 billion transformation plan, which includes cutting 900 non-retail jobs and closing underperforming locations. The coffee chain’s stock seesawed between small gains and losses and was last down 0.7%.
Global Markets Mixed
Overseas, European stocks also retreated:
- Germany’s DAX declined 1%
- France’s CAC 40 fell 0.7%
Asian markets ended the day with more modest moves as traders weighed Wall Street’s shifts and incoming global economic data.
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