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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Four people were killed, including a child, in Ukrainian strikes on the Russian port city of Novorossiysk overnight, according to the governor of the Krasnodar region. Ukraine's drone forces commander, Robert Brovdi, said Russian military ships were destroyed in the attacks.
A TV channel was struck during a live broadcast on Tuesday, Ukrainian President Volodymyr Zelenskyy said, as Russian strikes on Kyiv killed at least three people, the city's Mayor Vitali Klitschko said. Meanwhile, drones hit civilian infrastructure in Russia's southwestern Saratov region.
U.S. Central Command (CENTCOM) said its forces destroyed five Iranian crude oil carriers after the Islamic Revolutionary Guard Corps (IRGC) allegedly launched two ballistic missile attacks against a U.S. Navy warship over the past two days.
Wildfires have broken out in Türkiye’s Antalya province, forcing hundreds of people to evacuate as strong winds fuelled the flames.
Indonesia has reopened Jakarta's main airport and four others after volcanic ash from Mount Anak Krakatau forced widespread flight cancellations, though fresh eruptions have kept authorities on alert.
Volkswagen’s supervisory board has approved a major overhaul aimed at cutting 100,000 jobs by 2030 as the German carmaker battles weaker sales, falling profits and intensifying global competition.
Chinese Premier Li Qiang has called on American companies to expand their presence in China and pledged that Beijing would address their "reasonable concerns," as China looks to stabilise trade ties with Washington ahead of President Xi Jinping's planned visit to the U.S. later this month
Apple is entering a new era as Tim Cook steps down as chief executive after 15 years at the helm, handing the technology giant's leadership to longtime executive John Ternus.
Volkswagen is heading towards a decisive showdown with labour representatives as Germany's largest carmaker weighs sweeping restructuring measures that could lead to factory closures and tens of thousands of job losses.
Online fast-fashion retailer Shein is seeking to raise up to $1.77 billion in a Hong Kong IPO after its valuation fell around 70 per cent from its private-market peak four years ago.
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