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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Russia launched a large-scale overnight attack on Ukraine’s energy system early on Saturday (7 January), hitting power generation and distribution facilities with more than 400 drones and around 40 missiles, Ukrainian officials have said.
Storm Leonardo hit Spain and Portugal on Tuesday, forcing more than 11,000 people from their homes, as a man in Portugal died after his car was swept away by floodwaters and a second body was found in Malaga.
Start your day informed with AnewZ Morning Brief: here are the top news stories for the 7th of February, covering the latest developments you need to know.
U.S. and Ukrainian negotiators have discussed an ambitious goal of reaching a peace agreement between Russia and Ukraine by March, though the timeline is widely viewed as unrealistic due to deep disagreements over territory, according to multiple sources familiar with the talks.
Winter weather has brought air travel in the German capital to a complete halt, stranding thousands of passengers as severe icing conditions make runways and aircraft unsafe for operation and force authorities to shut down one of Europe’s key transport hubs.
Storm Leonardo hit Spain and Portugal on Tuesday, forcing more than 11,000 people from their homes, as a man in Portugal died after his car was swept away by floodwaters and a second body was found in Malaga.
An attacker opened fire at the gates of a Shiite Muslim mosque in Islamabad on Friday before detonating a suicide bomb that killed at least 31 people in the deadliest assault of its kind in the capital in more than a decade.
Ukraine and Russia carried out a rare exchange of 314 prisoners on Thursday as U.S.-brokered talks in Abu Dhabi closed with a pledge to resume negotiations soon, offering one of the clearest signs of diplomatic movement in months.
The United States and Iran are set to hold nuclear talks in Oman on Friday after Tehran requested a change of venue and a strictly bilateral, nuclear-focused format, a move that is fuelling questions about Iran’s negotiating strategy.
Uzbekistan is preparing to introduce Islamic banking after the Senate approved legislation creating a legal framework for Sharia-compliant financial services, a move authorities say could broaden financial access and attract new investment into the country’s economy.
Wall Street ended sharply lower on Tuesday as investors worried about artificial intelligence (AI) creating more competition for software makers, keeping them on edge ahead of quarterly reports from Alphabet and Amazon later this week.
U.S. stock markets finished mixed on Wednesday (28 January) as investors reacted calmly after the Federal Reserve left interest rates unchanged, a decision that had been widely expected and largely priced in.
The S&P 500 edged to a record closing high on Tuesday, marking its fifth consecutive day of gains, as strong advances in technology stocks offset a sharp selloff in healthcare shares and a mixed batch of corporate earnings.
Chevron is in talks with Iraq’s oil ministry over potential changes to the commercial framework governing the West Qurna 2 oilfield, one of the world’s largest producing assets, after Baghdad nationalised the field earlier this month following U.S. sanctions imposed on Russia’s Lukoil.
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