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U.S. stocks ended lower for the third straight session on Thursday, dragged down by Oracle, while fresh economic data raised doubts over future rate cuts by the Federal Reserve. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 0.4% or 173.96 points, to end at 45,947.32 points.
The S&P 500 fell 0.5%, or 33.25 points, to close at 6,604.72 points. Healthcare, consumer discretionary, materials and utility stocks were the worst performers.
The Health Care Select Sector SPDR (XLV) lost 1.7%. The Consumer Discretionary Select Sector SPDR (XLY) fell 1.4%. The Materials Select Sector SPDR (XLY) gave up 1.3%, while the Utilities Select Sector SPDR (XLU) declined 1%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq declined 0.5%, or 113.16, to finish at 22,384.70.
The fear gauge, CBOE Volatility Index (VIX), was up 3.64% to 16.74. Decliners outnumbered advancers on the NYSE by a 3.11-to-1 ratio. On the Nasdaq, a 3-to-1 ratio favored declining issues. A total of 19.58 billion shares were traded on Thursday, higher than the last 20-session average of 17.99 billion.
On the Nasdaq, there were 1,166 new highs and 3,502 new lows. On the NYSE, there were 110 new highs and 109 new lows.
Concerns Over Future of AI Hit Tech Stocks
Concerns have been growing over the monetization of the massive investments by hyperscalers in artificial intelligence companies. Tech stocks, especially those focused on AI, have been largely responsible for the broader market rally over the past couple of years.
The bull run has continued into this year, with hyperscalers ramping up data center builds to meet the surging demand for cloud services. However, companies that heavily integrate AI into their end products have turned into multi-baggers over the past three years, with share prices soaring more than 250% during this stretch.
Investors are now concerned about the record-high valuations of these AI companies after some recent developments, which have been denting their sentiment. Shares of Oracle Corp. ((ORCL - Free Report) ) declined 5.6% on Thursday, for the third straight session.
The Federal Reserve cut interest rates by 25 basis points last week on concerns over a shrinking labor market. The central bank also hinted at two more rate cuts of a quarter-basis-point each this year.
However, the Federal Reserve maintained its hawkish stance and said that the central bank should balance inflation concerns amid a shrinking labor market before deciding on the next rate cut.
On Thursday, Chicago Fed President Austan Goolsbee said that he, too, believes that the central bank should not rush before the next rate cut, as inflation remains a concern.
This came as fresh data showed that jobless claims declined 14,000 to 218,000 for the week ended Sept. 20.
Markets are now pricing in an 83.3% chance of a 25 basis-point rate cut in October, down from 92% on Wednesday, according to the CME FedWatch tool.
Economic Data
The Labor Department reported that jobless claims totaled 218,000 for the week ending Sept. 20, a decrease of 14,000 from the previous week. The four-week moving average was 237,500, a decrease of 2,750 from the previous week’s revised average of 240,250.
Continuing claims came in at 1,926,000, a decrease of 2,000 from the previous week’s revised level of 1,928,000. The 4-week moving average was 1,930,000, a decrease of 4,500 from the previous week's revised average of 1,934,500.
The National Association of Realtors said that existing home sales came in at 4 million units on a seasonally adjusted basis in August, declining 0.2% month over month. However, it increased 1.8% on a year-over-year basis.
The third and final estimate showed that U.S. GDP grew 3.8% in the second quarter of 2025, after declining 0.5% in the previous quarter and surpassing expectations of a rise of 3.3%.
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Stock Market News for Sep 26, 2025
U.S. stocks ended lower for the third straight session on Thursday, dragged down by Oracle, while fresh economic data raised doubts over future rate cuts by the Federal Reserve. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 0.4% or 173.96 points, to end at 45,947.32 points.
The S&P 500 fell 0.5%, or 33.25 points, to close at 6,604.72 points. Healthcare, consumer discretionary, materials and utility stocks were the worst performers.
The Health Care Select Sector SPDR (XLV) lost 1.7%. The Consumer Discretionary Select Sector SPDR (XLY) fell 1.4%. The Materials Select Sector SPDR (XLY) gave up 1.3%, while the Utilities Select Sector SPDR (XLU) declined 1%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq declined 0.5%, or 113.16, to finish at 22,384.70.
The fear gauge, CBOE Volatility Index (VIX), was up 3.64% to 16.74. Decliners outnumbered advancers on the NYSE by a 3.11-to-1 ratio. On the Nasdaq, a 3-to-1 ratio favored declining issues. A total of 19.58 billion shares were traded on Thursday, higher than the last 20-session average of 17.99 billion.
On the Nasdaq, there were 1,166 new highs and 3,502 new lows. On the NYSE, there were 110 new highs and 109 new lows.
Concerns Over Future of AI Hit Tech Stocks
Concerns have been growing over the monetization of the massive investments by hyperscalers in artificial intelligence companies. Tech stocks, especially those focused on AI, have been largely responsible for the broader market rally over the past couple of years.
The bull run has continued into this year, with hyperscalers ramping up data center builds to meet the surging demand for cloud services. However, companies that heavily integrate AI into their end products have turned into multi-baggers over the past three years, with share prices soaring more than 250% during this stretch.
Investors are now concerned about the record-high valuations of these AI companies after some recent developments, which have been denting their sentiment. Shares of Oracle Corp. ((ORCL - Free Report) ) declined 5.6% on Thursday, for the third straight session.
The company has now lost more than 16% from its recent high. Also, shares of Tesla, Inc. ((TSLA - Free Report) ) declined 4.4%. Oracle has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Concerns Grow Over Future Rate Cuts
The Federal Reserve cut interest rates by 25 basis points last week on concerns over a shrinking labor market. The central bank also hinted at two more rate cuts of a quarter-basis-point each this year.
However, the Federal Reserve maintained its hawkish stance and said that the central bank should balance inflation concerns amid a shrinking labor market before deciding on the next rate cut.
On Thursday, Chicago Fed President Austan Goolsbee said that he, too, believes that the central bank should not rush before the next rate cut, as inflation remains a concern.
This came as fresh data showed that jobless claims declined 14,000 to 218,000 for the week ended Sept. 20.
Markets are now pricing in an 83.3% chance of a 25 basis-point rate cut in October, down from 92% on Wednesday, according to the CME FedWatch tool.
Economic Data
The Labor Department reported that jobless claims totaled 218,000 for the week ending Sept. 20, a decrease of 14,000 from the previous week. The four-week moving average was 237,500, a decrease of 2,750 from the previous week’s revised average of 240,250.
Continuing claims came in at 1,926,000, a decrease of 2,000 from the previous week’s revised level of 1,928,000. The 4-week moving average was 1,930,000, a decrease of 4,500 from the previous week's revised average of 1,934,500.
The National Association of Realtors said that existing home sales came in at 4 million units on a seasonally adjusted basis in August, declining 0.2% month over month. However, it increased 1.8% on a year-over-year basis.
The third and final estimate showed that U.S. GDP grew 3.8% in the second quarter of 2025, after declining 0.5% in the previous quarter and surpassing expectations of a rise of 3.3%.