Wall Street closed lower on Thursday as renewed concerns about regional banks and intensifying U.S.-China trade tensions weighed on investor sentiment, pulling major indexes off recent record highs.
Shares of Zions Bancorporation tumbled after the lender revealed unexpected losses on two California loans, heightening unease about hidden credit risks among regional banks still contending with elevated interest rates. Western Alliance also slumped after disclosing it had filed a fraud lawsuit against one of its borrowers, adding to the sector’s woes.
The sell-off came as investors already faced rising uncertainty over trade policy. U.S. President Donald Trump threatened to impose 100% tariffs on Chinese imports starting November 1, alongside new measures targeting Beijing’s export restrictions on rare earth minerals.
“With the added uncertainty of U.S. and China trade and increased rhetoric and what that could mean for the economy and for the markets, I think that’s adding to market instability,” said Tom Hainlin, investment strategist at U.S. Bank Wealth Management in Minneapolis.
While TSMC, the world’s top chip manufacturer, issued a bullish forecast on AI spending, heavyweight tech stocks Palantir, Tesla, and Meta Platforms all slipped, curbing optimism in the sector.
Salesforce surged after projecting revenue above $60 billion by 2030, beating Wall Street estimates and offering a bright spot amid broader weakness.
Despite Thursday’s drop, the S&P 500 remains up 12% so far in 2025, buoyed by optimism over artificial intelligence and expectations of Federal Reserve rate cuts. However, with the index now valued at 23 times expected earnings — its highest multiple in five years — analysts say investor caution is warranted.
Robust earnings from major banks earlier in the week had underscored U.S. economic resilience, though official macroeconomic data remain delayed due to the ongoing government shutdown. Analysts expect S&P 500 earnings to rise 9.2% in Q3, up from 8.8% two weeks ago, according to LSEG I/B/E/S data.
Still, weakness in the insurance sector added pressure. The S&P 500 insurance index fell after Travelers Companies posted disappointing quarterly revenue, while Marsh & McLennan also dropped following a report of flat margins and slowing growth.
According to preliminary figures, the S&P 500 lost 42.10 points, or 0.63%, to close at 6,628.96; the Nasdaq Composite declined 105.77 points, or 0.47%, to 22,564.31; and the Dow Jones Industrial Average dropped 298.48 points, or 0.65%, to 45,954.83.
The Philadelphia Fed Business Index for October also disappointed, falling 12.8 points versus expectations of an 8.5-point gain. Meanwhile, Federal Reserve Governor Christopher Waller said he supports another rate cut in October, citing mixed signals in the job market.
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Kazakh President Kassym-Jomart Tokayev’s first official visit to Japan marks a notable moment in relations between the two countries, reflecting a shared interest in deepening cooperation.
The United States has suspended the Diversity Visa Lottery programme, commonly known as the Green Card lottery, after a deadly shooting at Brown University.
The European Union is facing mounting political pressure over its ability to keep Russian sovereign assets frozen, as internal divisions, leadership changes and war fatigue reshape decision-making across the bloc.
Ukraine has welcomed the European Union’s decision to provide €90 billion in support over the next two years, calling it a vital lifeline even as the bloc failed to reach agreement on using frozen Russian assets to finance the aid.
European Union foreign policy chief Kaja Kallas has warned that attempts to reach a peace agreement in Ukraine are being undermined by Russia’s continued refusal to engage meaningfully in negotiations.
Petroleum products are being transported by rail from Azerbaijan to Armenia for the first time in decades. The move is hailed as a tangible breakthrough in efforts to normalise relations between the long-time rivals.
U.S. President Donald Trump delivered a wide-ranging address from the White House in which he sought to highlight what he described as his administration’s achievements while laying the groundwork for his plans for the year ahead and beyond, on Wednesday (18 December).
Chinese Foreign Minister Wang Yi has held a phone conversation with his Venezuelan counterpart Yvan Gil at the latter’s request.
Warner Bros Discovery’s board rejected Paramount Skydance’s $108.4 billion hostile bid on Wednesday (17 December), citing insufficient financing guarantees.
Ford Motor Company said on Monday it will take a $19.5 billion writedown and scrap several electric vehicle (EV) models, marking a major retreat from its battery-powered ambitions amid declining EV demand and changes under the Trump administration.
Iran has rolled out changes to how fuel is priced at the pump. The move is aimed at managing demand without triggering public anger.
U.S. stock markets closed lower at the end of the week, as investors continued to rotate out of technology shares, putting pressure on major indices.
The U.S. Federal Reserve’s Federal Open Market Committee (FOMC) cut its benchmark interest rate by 25 basis points to a range of 3.50% to 3.75% following its two-day policy meeting, according to an official statement issued on Wednesday, 10 December.
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