S&P 500, Nasdaq close lower for a second day as investors weigh outlook for higher interest rates

December West Texas Intermediate crude oil contracts briefly touched $81.40 a barrel Thursday, the lowest since Oct. 3. WTI is now down 8.2% week-to-date and on pace for its largest weekly decline since Aug. 5, when it lost 9.7%.

December RBOB gasoline contracts fell 2.1% to $2.4547 a gallon after touching a session low of $2.4357 Thursday, the lowest since Oct. 3, and bringing the week-to-date loss to 5.9%.

The AAA national average for a gallon of gasoline at the retail level fell to $3.725, down almost 8 cents from a week ago ($3.803) and 16 cents lower than a month ago ($3.888). Gas is 31c or 9.1% higher than a year ago ($3.413), a little more than the year-over-year consumer price index inflation rate since then.

— Scott Schnipper, Gina Francolla

The Dow Jones Industrial Average closed near the flat line on Thursday despite falling as much as 314 points in the session. The S&P 500 fell 0.31%. The Nasdaq Composite declined 0.35%.

— Sarah Min

This software stock is positioned to become one of the best free cash flow growth stories in the industry, according to Morgan Stanley.

"With current unit economics capable of supporting >40% operating margins as growth slows, the combination of strong execution to a large (and growing) TAM with significant room for margin expansion should yield one of the best FCF growth stories in software," analyst Keith Weiss wrote in a note to clients Thursday.

CNBC Pro subscribers can read more on this software stock here.

— Samantha Subin

St. Louis Federal Reserve President Bullard's comments on Thursday reinforce the view that a Fed pivot is not coming anytime soon, according to Wolfe Research's Chris Senyek. Bullard suggested that the central bank should hike the fed funds rate to a minimum of 5% to 5.25%, and maybe as high as 7%.

Senyek said a fed funds rate as high as 6% is his base case.

"In our view, recent FedSpeak strongly supports our view that the Fed may hike as high as 6%. We believe that our intermediate-term bearish base case remains fully intact!" Senyek wrote in a Thursday note.

— Sarah Min, Michael Bloom

Information technology was the top outperformer in the S&P 500 during early afternoon trading, with the sector up 0.6%. Shares of Cisco Systems rose more than 4% after reporting a beat in its most recent earnings report, and issuing upbeat guidance. Other tech stocks such as Apple were up 1.7%.

Semiconductor stocks bolstered the sector, with shares of Advanced Micro Devices up 2%. NXP Semiconductors NV was about 1.8% higher, ON Semiconductor rose 1.7%, and Lam Research climbed 1.6%.

— Sarah Min

These are the stocks making the biggest moves midday:

Norwegian Cruise Line – Shares of the cruise stock shed 6% following a double downgrade to an underperform rating from Credit Suisse, who said shares are trading at a premium and investors can find better value in its peers.

Macy's – Shares of Macy's rallied 14% after the department store reported profit and revenue that beat Wall Street's expectations and raised its earnings forecast for the year. However, it left its revenue guidance unchanged. 

BJ's Wholesale – Shares dropped 6% despite the company reporting beats on the top and bottom lines while upping its full-year forecast for per-share earnings. BJ's also beat expectations for comparable store sales.

See the full list here.

— Alex Harring

Oaktree Capital's co-founder Howard Marks said a lot of distressed firms will emerge amid higher rates and a recession, presenting one of the best buying opportunities since the 2008 financial crisis.

"This is going to be a buyer's market and a lender's market. We're going to have much better opportunities," he told Bloomberg News. "We'll be looking among the ruins for great bargains."

— Yun Li

The iShares US Home Construction ETF (ITB) is down as much as 3.8% Thursday, bringing the week-to-date loss to about 5.5% — on pace for the worst week in two months.

The week-to-date laggards are led by LL Flooring (LL), down 13.8%, JELD-WEN (JELD), lower by 13,7%, Cavco Industries (CVCO), off 11.8%, Mohawk Industries (MHK), down 10.8%, and Skyline Champion (SKY) , lower by 10.7% this week.

The sell-off comes despite the rate on 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) dropping to 6.9% this week, from 7.14%, and mortgage application volume rising 2.7% last week compared with the previous week, according to the Mortgage Bankers Association.

— Scott Schnipper, Gina Francolla, Diana Olick

Stocks hit session highs in midday trading, with the Dow Jones Industrial Average eking out a 7 point gain, or 0.02%. The S&P 500 was down 0.44% at its session high, while the Nasdaq Composite dipped 0.3%.

Earlier in the session, the Dow was down as much as 314 points, or 0.94%. The S&P 500 dropped to a low of 1.32%, while the Nasdaq fell as much as 1.59%.

— Sarah Min

The average interest rate on a fixed-rate 30-year mortgage dipped to 6.61%, according to Freddie Mac. That's a decline of 47 basis points from the prior week, when the rate was 7.08%.

Recent economic data suggests that inflation may have reached a peak, according to Freddie Mac. Indeed, the consumer price index gained 0.4% in October, or 7.7% from a year ago, coming in below estimates and suggesting that inflation is starting to slow.

Further, the Federal Reserve's rate-hiking campaign has thrown cold water on the residential real estate market. Housing starts declined 4.2% on a monthly basis in October, compared to Dow Jones' expectation for a fall of 2%.

Even as housing demand cools in the near term, the cost of financing a home purchase has gone up significantly over the past year. A year ago, the average rate on a fixed-rate 30-year mortgage was 3.1%, Freddie Mac found.

-Darla Mercado

Liberty Media Chairman John Malone told CNBC he's doubtful that adding commercials to long-form streaming content would pay off for media companies in the long term.

"I'm a little skeptical as to how many people do save a few bucks or are going to be willing to tolerate ads in what I would call long-form entertainment programming," Malone said in a recorded interview with CNBC's David Faber that aired Thursday.

Netflix launched its first less-expensive plan with commercials after years of rejecting the concept. Meanwhile, Disney+ is set to roll out its ad tier in December. Other popular streamers including Hulu and HBO Max already have its ad-supported plans in place.

Netflix shares fell nearly 5% Thursday, while Disney is down 2.5%.

— Yun Li

A range of mixed signals are leading some on Wall Street to conclude the Federal Reserve will manage a soft landing for the economy. However, Bank of America does not agree with this sentiment.

"We don't share this ambivalence. Absent a surprisingly fast drop in underlying inflation we think the Fed will very likely push the economy into a recession that is likely a bit bigger than what other recession forecasters assume," according to a Thursday note from Ethan Harris, global economist at Bank of America.

The latest raft of economic data indicate a stronger consumer and labor market, while other releases point to "faster than expected" weakness in the housing sector. According to Harris, the divergent data is contributing to "on-going hopes that the economy will avoid a recession" as lags from Fed monetary policy tightening will be "longer and more variable than normal."

"We suspect that this high-probability bad outcome is not fully priced into risk assets," Harris wrote.

— Sarah Min, Michael Bloom

Health care is outperforming other S&P 500 sectors as investors continue moving into defensive sectors with steady earnings.

Though all sectors traded down Thursday, health care was performing the best, shedding just 0.5%. It's up 9% so far this quarter, a reprieve from the overall drop its seen of 6.4% since the start of 2022.

Biotechnology company CytomX Therapeutics surged 26.4% on news of a research collaboration with Regeneron, which was down about 0.9%.

Bigger names also saw gains.

Merck, known for its focus on animal care and pharmaceuticals, is up 2%. UnitedHealth followed in tow, gaining 1.9%.

— Alex Harring

Oil prices fell Thursday for a second day.

Brent crude futures lost $2.01, or 2%. The price sat at $90.85 a barrel.

U.S. West Texas Intermediate (WTI) crude futures fell $2.93 to $82.66 a barrel, which is a drop of 3.4%.

On Wednesday, brent and WTI fell 1.1% and 1.5%, respectively, on the news of Russian oil shipments through the Druzhba pipeline to Hungary restarting.

— Alex Harring

Keeping inflation under control is the best way to ensure a strong economy for everyone, Federal Reserve Governor Philip Jefferson said Thursday.

"Low inflation is key to achieving a long and sustained expansion — an economy that works for all," the central bank official said during an event in Minneapolis. "Pursuing our dual mandate is the best way for the Federal Reserve to promote widely shared prosperity."

Jefferson did not provide any direct comments on where he sees policy heading as the Fed looks to achieve both full employment and stable prices.

His comments from following a flurry of speeches from his colleagues, who universally say the Fed will need to raise interest rates more to bring down inflation still running around its highest levels since the early 1980s.

—Jeff Cox

The Global X Lithium & Battery Tech ETF slumped 2.4% on Thursday, putting the fund on pace for its worst week since Feb. 26, 2021, when it shed 11.05%.

Week to date, the ETF is down 8.3%, dragged down by shares of Albermarle, Livent and Lucid, which have fallen at least 13% since the beginning of the week.

— Samantha Subin, Gina Francolla

Defensive stocks such as health care and consumer staples outperformed on Thursday as Fed leaders signaled greater rate hikes ahead. Health care was down just 0.46%, while consumer staples was off 0.52%.

Health care stocks such as Centene and Merck were up 2.3% and 1.8%, respectively. Bristol-Myers Squibb climbed 1.7%.

Consumer staples stocks such as Conagra Brands, Tyson Foods and Kroger led gains in the sector. They were up 1.4%, 1.4% and 1.2%, respectively.

— Sarah Min

Shares of Whirlpool dipped nearly 1% in premarket trading Thursday after Goldman Sachs reinstated coverage at neutral. The Wall Street firm said it expects demand for appliances to moderate through 2023 as consumer spending normalizes and higher rates lead to reductions in home price appreciation and turnover.

"Our view reflects the weakening housing backdrop, combined with normalizing supply chains and promotional activity, which we believe will weigh on volumes and earnings through 2023," Goldman analysts said in a note.

Goldman added that there could be a pause in buybacks as cash flows are redirected to paying down debt related to the deal, which will leave the stock range bound.

— Yun Li

Two better-than-expected inflation reports aren't enough for Chris Senyek of Wolfe Research to change his tune about stocks.

October consumer price index and producer price index reports came in weaker than expected, potentially signaling that inflation is past its peak. That could prompt the Federal Reserve to halt rate hikes sooner than expected, which would give equities a boost.

Senyek isn't buying it.

"Despite the recent better than expected CPI and PPI data, we remain bearish on equities and expect the Fed ultimately to raise interest rates higher than consensus expects as inflation remains persistently high and employment stays stronger for longer," Senyek wrote in a Wednesday note.

He added that if he's right, valuations will remain under pressure and earnings expectations will continue to fall, further weighing on equities.

"In this environment, our current favorite screens include Double Beats & Positive Price Action, Consistent Dividend Increasers, and High Total Yield," he said.

—Carmen Reinicke

The Dow Jones Industrial Average opened more than 300 points lower on Thursday. The S&P 500 slipped 1.1%, while the Nasdaq Composite dipped 1.4%.

Those moves come as interest rates jumped as Federal Reserve officials signaled interest rate hikes to slow inflation are far from over.

— Sarah Min

The four-week moving average for initial jobless claims hit its highest level since Sept. 10. Meanwhile, continuing claims reached its highest point since March.

Initial jobless claims was 222,000 for the week ending Nov. 12, a drop of 4,000 from the prior week's adjusted 226,000 claims.

Continuing jobless claims reached 1.507 million for the week of Nov. 5, up from the prior week's revised 1.494 million claims. It's the highest level since Mar. 26 when continuing claims were 1.529 million

— Sarah Min, Gina Francolla

Housing starts slid in October, according to the U.S. Census Bureau.

Housing starts in October dipped 4.2% from the prior month to a seasonally adjusted annual rate of 1.425 million. Still, that came in better than the 1.41 million units expected, according to Dow Jones consensus estimates.

Meanwhile, housing permits dipped 2.4% to a seasonally adjusted annual rate of 1,526,000 in October. It was better than 1.5 million units expected, according to the Dow Jones.   

— Sarah Min

St. Louis Federal Reserve President James Bullard said more tightening may be needed for the central bank to tame inflation.

He said Thursday that inflation remains unacceptably high, noting that policy isn't "sufficiently restrictive" at current levels. The Fed has raised rates from zero to a range of 4%-4.25% this year, as U.S. inflation soars to levels not seen in decades.

"Thus far, the change in the monetary policy stance appears to have had only limited effects on observed inflation, but market pricing suggests disinflation is expected in 2023," Bullard said.

— Fred Imbert

Recent quarterly results from Nvidia suggest that the chip company's gaming business is nearing a bottom.

Nvidia reported a mixed quarter after the bell on Wednesday, reporting a 51% decline year over year in its gaming segment's sales as demand has slowed since a pandemic-era boom.

Bank of America's Bank of America's Vivek Arya said in a note to clients that the current period should serve as an "inflection quarter" for the chip stock.

CNBC Pro subscribers can read more on why Arya and other analysts are calling a bottom on Nvidia's gaming business here.

— Samantha Subin

Credit Suisse double-downgraded shares of Norwegian Cruise Line to an underperform rating Thursday, saying shares are trading at a sharp premium to peers given the risk ahead.

"NCLH is a quality organization, and we are constructive long term, however, the stock has outperformed materially YTD and on a relative basis we see risk to estimates and valuation vs peers," wrote Benjamin Chaiken in a note to clients.

Shares fell 5% before the bell following the downgrade.

CNBC Pro subscribers can check out the full story here.

— Samantha Subin

Shares of Kohl's dipped 4% in Thursday premarket trading after the retailer said it's dropping its full-year guidance.

The department store chain is dealing with a raft of challenges amid a difficult macro environment. It's also contending with the "unexpected" departure of its CEO Michelle Gass, who will leave in December to join Levi Strauss as its CEO in waiting.

— Sarah Min, Lillian Rizzo

Shares of Macy's jumped 8% in premarket trading Thursday after the department store chain reported earnings that surpassed expectations. Strong sales of luxury goods, and better positioning heading into a difficult holiday season, bolstered the retailer's third-quarter results.

Here's how Macy's performed, compared to Refinitiv estimates:

• Earnings per share: 52 cents adjusted vs. 19 cents expected
• Revenue: $5.23 billion vs. $5.2 billion expected

— Sarah Min, Melissa Repko

BMO analyst Kelly Bania downgraded Target to market perform a day after the retailer posted disappointing quarterly figures.

"While we continue to expect TGT's EBIT margin to rebound to 6%+ following depressed levels in 2022, we believe the stock is likely fairly priced and already reflects a rebound margin (we forecast nearly 90% earnings rebound next year), but we are less certain regarding the magnitude of sales to attach to this EBIT margin given TGT's market share gain trends," she wrote.

CNBC Pro subscribers can read more here.

— Sam Subin

European markets were modestly higher on Thursday morning as investors monitored the geopolitical situation in Europe and awaited a key fiscal policy statement in the U.K.

The pan-European Stoxx 600 was up 0.3% in early trade, with travel and leisure stocks climbing 1% to lead gains as most sectors nudged into positive territory.

- Elliot Smith

U.K. Finance Minister Jeremy Hunt will deliver his Autumn Statement on Thursday, and is expected to announce a slew of tax rises and spending cuts as he attempts to plug a substantial hole in the country's public finances.

Hunt will also be hoping to reassure the market of the country's fiscal credibility under new Prime Minister Rishi Sunak's government, after the chaos unleashed by former leader Liz Truss' disastrous "mini-budget" in late September.

Follow CNBC's live blog here.

- Elliot Smith

Russia's war on Ukraine is the "single most important negative factor" for the world economy this year — and most likely for 2023 as well, IMF chief Kristalina Georgieva told CNBC on Wednesday. 

Speaking on the sidelines of the Group of 20 meeting in Bali, Indonesia, Georgieva commented on the missile that struck Polish territory late Tuesday, which killed two civilians. 

While she applauded the G-20 members' draft declaration that condemned Russia's aggression against Ukraine, Georgieva said that the focus of the summit has been "very pressing problems" — such as global inflation, rising costs of living, food and energy security.

"I was listening very carefully to all the statements and it's encouraging that these are the issues we are focusing on — as we must," she said.

The IMF previously issued warnings on the fragmentation of the global economy due to the war, and slashed 2023 growth forecasts from an expected 3.2% in 2022 to 2.7%.

Read the full story here.

—Goh Chiew Tong

Fed speakers will talk at events across the country Thursday.

The list includes:

• Fed Chair Jerome Powell
• Atlanta Fed President Raphael Bostic
• St. Louis Fed President James Bullard
• Cleveland Fed President Loretta Mester
• Minneapolis Fed President Neel Kashkari
• Chicago Fed President Charles Evans
• San Francisco Fed President Mary Daly
• New York Fed President John Williams
• Fed Governor Philip Jefferson
• Fed Governor Michelle Bowman

Some events will not be live streamed or have question-and-answer portions. The event featuring Powell has explicitly said speakers will not address monetary policy.

— Alex Harring, Betsy Cline Spring

These are some of the stocks making moves in the post-market, propelled by earnings reports:

Cisco – Shares jumped 4.8% after the maker of computer networking equipment beat expectations for its first-quarter earnings per share and revenue, according to StreetAccount. It also issued second-quarter and full-year outlooks that showed those same indicators either matching or topping expectations. But Cisco said the non-GAAP gross and operating margins would likely come in below expectations for the next quarter.

Bath & Body Works – The company jumped 16.3% after third-quarter results doubled StreetAccount's per-share earnings estimate. It also beat on revenue. bath & Body Works issued fourth-quarter per-share earnings expectations that were about in-line with analysts polled by FactSet, but raised its full-year guidance.

See the full list here.

— Alex Harring

Stock futures opened up Wednesday evening.

Futures tied to the Dow were up 0.22%.

Meanwhile, Nasdaq 100 and S&P 500 futures each gained 0.3%, respectively.

— Alex Harring