Stock market live updates: Dow drops 400 points, tech rally loses steam, oil prices fall

This is CNBC's markets live blog that will be updated throughout the day. 

The U.S. market continued its volatile week on Thursday as the tech sector gave up some of its rebound from the previous session. The major market indexes began the day in positive territory, but slides for major stocks like Apple dragged them into the red. Here's what's happened. 

Thursday's session by the numbers

  • S&P 500 closed down 1.76% for its fourth negative day in five
  • S&P is down 2.56% week to date
  • Eleven out of 11 sectors were negative Thursday led by energy down 3.68% for its seventh negative day in eight
  • Nasdaq Composite closed down 1.99% for its fourth negative day in five
  • Nasdaq is down 3.48% week to date
  • Dow closed down 1.45% for its fourth negative day in five
  • Dow is down 2.13% week to date
  • Russell 2000 small caps closed down 1.23% for their fourth negative day in five. — Gina Francolla

Nasdaq leads market down

The market slump deepened in the final hour of trading as the major indexes fell at least 1% on Thursday. The Nasdaq Composite was the worth performer, falling about 2%. The Dow lost 400 points while the S&P 500 lost 1.8%. The indexes did finish off of their session lows, with the Dow down nearly 500 points at one point. — Jesse Pound

Ray Dalio says the world is underinvested in China

Don't count Ray Dalio among the There Is No Alternative investing crowd. The billionaire Bridgewater hedge fund manager provided another choice for investors caught up in the TINA mentality that states the U.S. is really the only place to put money these days. "The world's market allocation in investing is very overweight in the U.S. and very underweight in China," Dalio said during an Economic Club of New York event Thursday. "I think for various fundamental reasons that's going to change and capital market flows will move in ways that are beneficial to China." While Dalio was otherwise evasive about his investing strategy these days, he also said technology 
"assets have become rather expensive." In the political sphere, Dalio made a pitch for bipartisanship, saying, "The biggest risk is how we treat each other." — Jeff Cox

Tesla turns negative, reversing nearly 9% gain

Shares of Tesla turned negative during the final hour of trading, reversing earlier gains that saw the stock rise nearly 9%. The reversal continues the frenetic trading in Tesla recently, which saw the stock drop 21% on Tuesday, before jumping nearly 11% on Wednesday. Shares were last down about 1.2%. - Pippa Stevens

Oil dips on inventory concerns

Oil dipped on Thursday, building on recent weakness as demand concerns and rising inventory pressured prices. West Texas Intermediate crude, the U.S. oil benchmark, fell 1.97%, or 75 cents, to settle at $37.30. Brent crude, the global benchmark, shed 1.79% to settle at $40.06. On Wednesday, the U.S. Energy Information Administration said that inventory for the prior week rose by 2 million barrels. Analysts polled by FactSet had been expecting a 1.1 million barrel draw. - Pippa Stevens 

Final hour of trading: Dow drops nearly 300 points as tech struggles resume

The major averages were down sharply with less than an hour left in the trading session as tech resumed its sharp drop. The Dow was down about 300 points, or 1.1.%. The S&P 500 slid 1.4% and the Nasdaq Composite dropped 1.7%. —Fred Imbert

Tech drags market to session lows

The main indexes fell to session lows as major tech stocks continued to struggle on Thursday. Shares of Apple, Amazon and Microsoft were in negative territory, while Tesla's gain was whittled to less than 1% for the day. The Dow fell more than 350 points, while the S&P 500 and Nasdaq lost 1.7% and 1.9%, respectively. Small caps were outperforming, with the Russell 2000 hovering near the flat line. — Jesse Pound 

Rising medical costs could drive up Fed's inflation measure

There was an unexpected jump in the cost of medical expenditures in August, and that is likely to show up in the Fed's preferred inflation gauge reported later this month.

The Fed recently changed the way it views inflation, and it will now look for an average target range around 2%, meaning inflation will be allowed to run hotter than its previous 2% target. The Fed's preferred measure of inflation is the PCE deflator, up 1.3% year over year in July.

The producer price index, reported Thursday, rose by 0.3% in August, 0.1% ahead of estimates. The medical care categories, that also show up in the PCE inflation report, rose significantly.

Goldman Sachs economists said the medical care categories in PCE likely rose by an estimated 0.53% in August over July. 

Next up for inflation watchers is Friday's August consumer price index at 8:30 a.m. ET, expected to rise by 0.3%.  "We will have a better idea of August PCE inflation after the release of CPI tomorrow but core PCE year-on-year is still likely to remain well-below the 2%-target into 2021," note Citigroup economists. --Patti Domm 

Senate fails to pass Republican coronavirus stimulus plan

Senate Democrats blocked a targeted pandemic relief plan proposed by Republicans, claiming it's insufficient to mitigate the pandemic's damage. The Senate's vote in favor of the bill was short of the 60 needed on a procedural step to move toward passage. The measure did not include a second $1,200 direct payment to individuals. It also lacked new relief for cash-strapped state and local governments or money for rental and mortgage assistance and food aid — all priorities for Democrats. Earlier Thursday, Senate Minority Leader Chuck Schumer, D-N.Y., called the GOP plan "beyond insufficient" and "completely inadequate." — Yun Li, Jacob Pramuk

Markets at midday: Stocks fall as tech struggles to continue rebound

The major averages were down in midday trading as tech shares struggled to follow through on their sharp gains from the previous session. The Dow traded 114 points lower, or 0.4%, after being up more than 200 points earlier in the day. The S&P 500 was down 0.4%. The Nasdaq Composite dipped 0.1%. —Fred Imbert

Starboard Value SPAC opens at $10, in line with IPO pricing

Jeffrey Smith's special purpose acquisition company Starboard Value Acquisition Corp opened at $10 per share in its market debut on Thursday after pricing the initial public offering at $10 a share. The stock, which trades under the ticker SVACU on the Nasdaq, edged slightly higher and last traded at $10.03 a share. The SPAC offering had been upsized to $360 million from $300 million.

Starboard Value said in a statement it will seek a target company in a slew of different industries including technology, healthcare, consumer, industrials, hospitality and entertainment. — Yun Li

Stocks slip into the red

The major average gave up their earlier gains as shares of technology stocks lost steam. The Dow Jones Industrial Average was last down 70 points. The Nasdaq Composite traded around the flatline. — Maggie Fitzgerald 

Stocks cut gains, Apple goes in the red

The technology stock rally lost steam about an hour into the trading session with the major averages giving up a big chunk of their earlier  gains. Shares of Apple, which rose nearly 2% earlier in the day, turned negative. The Dow Jones Industrial Average was last up 35 points. — Maggie Fitzgerald 

Online retail surges on Thursday morning

E-commerce stocks were some of the biggest winners in early trading on Thursday. The Online Retail ETF (IBUY) has risen 2.7%, on pace for its best day since Sept. 1 when it gained 3.19%. The ETF is up 3% so far this week. 

The ETF was led Thursday by Overstock, Spotify, Peloton and Wayfair. Overstock jumped 15% on Thursday, while Peloton was on pace for its best week since May. — Jesse Pound, Gina Francolla

Navistar jumps after Traton raises acquisition price

Shares of truck maker Navistar International jumped more than 18% on Thursday after Volkswagen subsidiary Traton raised its takeover offer from $35 per share to $43 per share. Traton, which owns 16.8% of Navistar, first approached the company in January. - Pippa Stevens

Stocks open in the green, tech rebound charges on

The major averages opened in positive territory on Thursday, with major technology companies leading the way after its recent sell-off. The Dow Jones Industrial Average popped 118 points after the opening bell. The S&P 500 ticked 0.45% higher. The Nasdaq Composite rose 0.86%, helped by a 4% jump in Tesla and a 1.7% rise in Apple's stock. — Maggie Fitzgerald 

Here are Thursday’s biggest analyst calls of the day: Penn National Gaming, Spotify, Bed Bath & Beyond, RH & more

  • Goldman Sachs upgraded Sanderson Farms to buy from neutral.
  • Jefferies downgraded Churchill Downs to hold from buy.
  • Telsey upgraded RH to outperform from market perform.
  • Credit Suisse upgraded Spotify to outperform from neutral.
  • Rosenblatt initiated Penn National Gaming as buy.
  • Wedbush added Bed Bath & Beyond to the best ideas list.
  • DA Davidson initiated Ulta as buy.
  • MKM initiated Exxon as buy.

Pro Subscribers can read more here. - Michael Bloom

Shares of Penn National Gaming jump 5% in premarket trading after big call from Rosenblatt

Shares of Penn National Gaming rose more than 5% in premarket trading on Thursday after Rosenblatt initiated coverage of the gambling company with a buy rating and a $80 per share price target, the highest target on Wall Street. The Wall Street firm sees Penn National's partnership with Barstool Sports as an opportunity to grab market share. Rosenblatt's target price implies a near-40% rally for the gambling company's stock from its closing price of $58.15 on Wednesday. "With a unique, content focused strategy, we believe PENN has the opportunity to gain significant share in the online sports betting market at above peer margins driven by their Barstool partnership and physical footprint," Rosenblatt Securities consumer technology analyst Bernie McTernan told clients. "As sports betting moves from niche to mainstream, we believe Barstool can take advantage of this greenfield opportunity to be the dominant sports betting media company in the US." — Maggie Fitzgerald 

Producer prices rise more than expected in August

U.S. producer prices increased slightly more than expected in August, led by a rise in the cost of services. The Labor Department said on Thursday the producer price index rose 0.3% last month after surging 0.6% in July, compared with a Dow Jones estimate of a 0.2% gain. There was a 0.5% increase in services, while prices for goods edged up 0.1%.— Yun Li

Citi CEO Michael Corbat set to retire in February

Citigroup CEO Michael Corbat will retire in February 2021 after eight years at the helm of the major U.S. bank. Corbat — who has worked at Citi for 37 years — will also set down from Citi's board. Jane Fraser — Citi's President and CEO of Global Consumer Banking — will replace Corbat, becoming the first female CEO of a megabank. — Maggie Fitzgerald 

Coronavirus relief bill comes before the Senate

On Thursday the U.S. Senate will vote on a Republican bill seeking $300 billion for coronavirus aid. The bill is well below the $3 trillion in aid that Democrats have called for. Senate Majority Leader Mitch McConnell needs 60 votes. Failing that, it's unlikely that another aid package will be voted on ahead of November's elections. - Pippa Stevens

Jobless claims miss estimates, come in at 884,000

The number of people filing for unemployment benefits last week was higher than expected as the jobs market is slow to recover from the coronavirus pandemic. The Labor Department said 884,000 initial claims were filed the week ending Sept. 5. Economists polled by Dow Jones expected a print of 850,000. Continuing claims, which includes those receiving unemployment benefits for at least two straight weeks, rose by 93,000 to 13.385 million. —Fred Imbert, Jeff Cox

S&P 500 decline could double before pullback is over, CFRA says

The S&P 500's 7% pullback is the average for all 59 bull markets since World War II, but it could sink further to its 200-day moving average, about a 13.5% decline in total, according to CFRA's Sam Stovall.

The near 14% decline would be within the range of declines typically seen after post-bear market new highs. The 200-day is currently at 3,096, nearly 300 points from its Wednesday close of 3,398. The S&P had recovered 2% Wednesday.

"My guess is we end up falling a little bit further," said Stovall, chief investment strategist. But since there has been no change in interest rates,  a further drop would present a buying opportunity, he said. The 200-day moving average is often bull market support, and it is a technical level that basically is the average of the past 200 closing prices.

Before Wednesday's rebound, the tech sector had fallen the furthest, down 11%. In a further decline, Stovall said high flying growth groups could fall more than others. —Patti Domm

Bed Bath & Beyond shares pop after Wedbush says company has turned a 'positive corner'

Wedbush added Bed Bath & Beyond to its "best ideas" list, sending the stock up more than 5% in the premarket. Analyst Seth Basham said Bed Bath & Beyond continues to trade at "distressed levels despite the company turning the corner to positive comps in recent months and being on the cusp of a dramatic improvement in profitability."

"Clearly, many do not believe in this potential transformation," Basham said. "We beg to differ." The analyst noted he expects Bed Bath & Beyond to reach EBITDA of nearly $850 million by 2022 "using conservative estimates."

He also said that sustained comparable-store sales is critical to the company's outlook, but added that "while no retail transformation is linear, we expect this story to build with the company's F2Q earnings report on October 1, followed by a mid-late October analyst meeting roadmapping the forthcoming transformation and then stronger holiday sales."

Bed Bath & Beyond shares are down more than 33% year to date. Entering Thursday's session, the stock was also more than 35% below its 52-week high. —Fred Imbert, Michael Bloom

Spotify rises 4% following Credit Suisse's upgrade

Shares of Spotify gained more than 4% in premarket trading Thursday after Credit Suisse upgraded the music streaming service company to outperform from neutral. The bank is bullish on Spotify's subscriber growth and major labels participating in its "Marketplace" offering, which allows artists to promote their music to targeted audiences.— Yun Li

Starboard Value's upsized $360 million SPAC starts trading Thursday

Jeffrey Smith's Starboard Value's blank-check company has increased the size of its initial public offering to raise $360 million. The new special purpose acquisition company, or SPAC, is called Starboard Value Acquisition Corp, and it will offer 36 million shares, upsized from 30 million shares, at $10.00 per share. It will be listed on the Nasdaq and will trade under the ticker SVACU beginning on Thursday. 

Starboard's launch followed a slew of high-profile investors including billionaire hedge fund manager Bill Ackman and Oakland A's executive Billy Beane who chose this IPO alternative to finance a merger or acquisition and take the target firm public. Total funds raised via blank-check deals have exceeded traditional IPOs for two months straight, and there has been a record $33 billion raised via a total of 86 SPACs this year alone, a more than 260% jump from a year ago, according to Refinitiv. — Yun Li

Weekly jobless claim filings expected to continue decline

The pace of weekly unemployment claims was expected to decrease slightly as workers continue to head back to their jobs. Economists surveyed by Dow Jones estimate 850,000 new filings for unemployment insurance, a slight decline from last week's 881,000. Starting last week, the Labor Department changed the way it applies seasonal adjustments to the claims, so the numbers are not directly comparable to some of the eye-popping levels that were common earlier in the pandemic. — Jeff Cox

Traders bracing for some big market moves after the election

With the prospects for a protracted election battle on the rise, traders are hedging against potentially sharp market moves following the Nov. 3 contest.

Cboe Volatility Index (VIX) futures contracts set to expire after the election are holding at elevated levels. Normally these contracts trade at sharp discount to those expiring just before the election in part because it's usually clear who the winner is on election night. But this time, with so many votes being cast by mail because of the pandemic, it could take longer for those results to be determined. 

CNBC Pro subscribers can read more here. —Fred Imbert

RH soars 17% after big earnings beat

Shares of RH surged 17% in premarket trading on Thursday after the luxury furniture retailer reported quarterly earnings that easily topped expectations. RH posted an adjusted second-quarter profit of $4.90 per share, versus the consensus estimate of $3.41, according to Refinitiv. Its revenue also came in ahead of Street estimates. The parent of Restoration Hardware also provided an upbeat outlook, saying it now sees a path to 25% adjusted operating margins, up from a 20% projection previously.— Yun Li

Tesla jumps in premarket trading, building on Wednesday's pop

Shares of Tesla advanced more than 4% during premarket trading on Thursday, building on Wednesday's nearly 11% gain. Investors have rushed back into the electric vehicle auto maker after shares dropped 21% on Tuesday for the stock's worst day on record. Shares have been under pressure in recent sessions due a number of factors: the company's $5 billion stock offering, Tesla's largest outside shareholder trimming its position, and S&P Dow Jones Indices opting not to include the stock in the S&P 500. - Pippa Stevens 

Wall Street set for a lower open after a massive rally in the previous session

U.S. stock futures fell on Thursday as traders digested the previous session's sharp rally that curbed a massive three-day slide. Dow Jones Industrial Average futures were down 160 points, or 0.6%. S&P 500 futures dipped 0.5% and Nasdaq 100 futures were lower by 0.2%. On Wednesday, the major averages were all up at least 1.6% as the market rebounded from its worst three-day stretch in months. Tesla and technology shares were continuing their bounce in premarket trading.

Traders were also grappling with increasing uncertainty around a potential U.S. fiscal stimulus bill. 

"Hopes for a stimulus deal before the election (Nov 3rd) are fading, and if that's the case we should expect that to weigh on stocks in the coming weeks, especially if economic data starts to roll over," Tom Essaye, founder of The Sevens Report, said in a note. —Fred Imbert