The Nasdaq Composite fell for a fourth session Thursday as concerns resurfaced over the Federal Reserve's interest rate policy path, and whether policymakers will enact another hike this year.
The tech-heavy Nasdaq sold off 0.89% to end at 13,748.83, while the S&P 500 slipped 0.32% to finish at 4,451.14. The Dow Jones Industrial Average added 57.54 points, or 0.17%, to settle at 34,500.73.
"People were hoping the Fed would be on hold for the rest of the year, but it's possible that we got one or two more rate hikes to come," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. "All things being equal, that's a little bit of a negative for the stock market, which was expecting the Fed to potentially be done for the year."
Apple shares dropped 2.9% on a Bloomberg News report that China is looking to broaden a ban on the use of iPhones in state-owned companies and agencies. Technology and semiconductor stocks lagged, with Nvidia and Advanced Micro Devices falling 1.7% and 2.5% each. Seagate Technology shed nearly 11%, while Skyworks Solutions, Qualcomm and Qorvo edged down at least 7%.
A series of economic data points Thursday — including fewer-than-expected jobless claims — contributed to fears that the still-strong labor market may make the Federal Reserve think twice about relaxing its tight monetary policy stance. Weekly jobless claims came in at 216,000, versus the 230,000 expected by Dow Jones, while second-quarter labor costs rose more than anticipated.
Combined with the recent uptick in energy prices, a strong jobs market will boost the need for the Fed to act and potentially approve more hikes, Zaccarelli said.
While 93% of traders pricing in a rate pause at September's Federal Open Market Committee meeting, future hikes aren't off the table. Expectations for an additional increase in November have risen to roughly 43%, according to the CME Fed Watch tool.
Traders also combed through the latest corporate earnings reports. C3.ai slid 12.2% on weak guidance, while ChargePoint plunged 10.9% after missing revenue estimates.