Dow tumbles more than 300 points to notch third day of losses amid fears of higher rates, government shutdown

Stocks ended Thursday's session lower.

The Dow lost 1.1%. The S&P 500 and Nasdaq Composite slid 1.6% and 1.8%.

All three are also on pace to end the week down.

— Alex Harring

Nvidia isn't the high-flier it was earlier this year.

Since peaking at an all-time high on August 24, the maker of the leading computer chip used in artificial intelligence applications has tumbled 18.4%.

Thursday alone, Nvidia fell as much as 2.9%, leaving its week-to-date loss at 6.5% and decline so far in September at 16.9%. For the entire year, Nvidia is still ahead 181%, but at the August peak it was higher by 244%.

Amazon is the hardest hit of the Magnificent 7 stocks on Thursday, sliding 4.2%.

— Scott Schnipper

Five9 is well-positioned to grow its market share in the software space as companies prioritize customer satisfaction, according to Deutsche Bank. The firm upgraded Five9, which provides cloud software services to customer contact centers, to buy from hold.

"Simply put, we believe momentum from recent bookings strength (amidst a favorable backdrop for cloud contact center spend) is likely to re-accelerate revenue growth, with current valuation that is roughly half of year ago levels (and lags [small- and mid]-cap software peers relative to growth)," analyst Matt Niknam said.

To read more about the upgrade, click here.

— Hakyung Kim

Investors followed news that House Republican leaders sent the chamber into recess on Thursday, raising concerns that federal lawmakers won't pass a bill to avert a government shutdown. Market participants are concerned that a shutdown would hurt fourth-quarter GDP.

— Alex Harring, Christina Wilkie

The three major indexes remain on pace for weekly losses as of Thursday afternoon. Here's where the three stand on the week:

• The Dow has lost 1.3%.
• The S&P 500 has lost 2.5%.
• The Nasdaq Composite has lost 3.3%.

— Alex Harring

Stocks continued trading down entering the final hour.

The Dow shed 0.6%, while the S&P 500 and Nasdaq Composite slipped about 1.1% and 1.3%, respectively, shortly before 3 p.m. ET.

None of the three major indexes have traded up at any point in the session.

— Alex Harring

Seaport Research Partners upgraded Enphase Energy shares to buy from neutral in a Thursday note.

"We think as ENPH benefits from ongoing share repurchases; continued robust growth in Europe's residential solar market as it both thrives in existing countries and enters new ones; and, by mid- to late-2Q24, a clear emergent recovery in U.S. residential solar installations, the stock will experience multiple re-expansion," analyst Tom Curran wrote in a Thursday note. 

Enphase shares have tumbled more than 53% in 2023 amid a difficult year for the residential solar energy market in the U.S. The sector has faced weak demand. California, which is the largest market for U.S. residential solar installers, also instituted a policy change that reduced a subsidy for solar panel owners for sending excess power into the grid — further impacting demand. 

However, Curran thinks the U.S. residential market could show an "incipient recovery" by the end of the second quarter next year. 

More on the upgrade can be found here.

— Hakyung Kim

Popular artificial intelligence names are seeing dwindling interest from retail investors, according to Vanda Research.

"As we extensively analyzed in earlier reports, the combination of waning retail demand and cautious risk sentiment among institutional investors may pose a substantial risk to the AI sector, potentially heralding a pronounced reversal in the weeks ahead," wrote senior vice president Marco Iachini.

Some of the names experiencing diminishing investors interesting include Microsoft, Nvidia, IonQ and C3.ai.

— Samantha Subin

Only six companies in the 30-stock Dow were positive as of midday Thursday.

The index was last trading 0.4% lower, with Cisco Systems leading the losses. Cisco lost more than 4% after acquiring software company Splunk in a $28 billion deal.

Visa and Salesforce were the second and third largest decliners. Both stocks fell 1.6%.

— Hakyung Kim

Organon is an undervalued global play and leader in women's specialty health, according to Barclays. 

The company, with a portfolio of around 60 treatments and products focused on women's health, was spun off from Merck in 2021. The stock has suffered ever since, sliding 8% in 2022 and 33% so far in 2023, although it does pay a 5.9% dividend.

Barclays analyst Balaji Prasad initiated coverage on Organon with an overweight rating, citing long-term value from Organon's expanding Biosimilars segment. 

"Though the company is weighed by declining legacy brands, we believe that its differentiated Women's Health franchise combined with growing Biosimilars franchise, coupled with undemanding valuations and a dividend yield of 6% justifies an [overweight] stance," Prasad said in a Thursday note. 

CNBC Pro subscribers can read more about his call here.

— Hakyung Kim

Check out the companies making headlines in midday trading.

• Cisco Systems, Splunk — Shares of Cisco fell 4.2% on Thursday after the company said it is acquiring cybersecurity software company Splunk for $157 per share in a cash deal worth about $28 billion. Splunk's stock price popped 21.2% on news of the deal.
• Broadcom – Shares of Broadcom moved lower by almost 2%. The action follows a report by The Information that Google is holding internal discussions about dropping the artificial-intelligence chip supplier in favor of its own internally-developed chips as soon as 2027.
• Fox Corp, News Corp — Shares of Fox and News Corp gained 3% and 2%, respectively, on news Thursday that Rupert Murdoch is stepping down as chairman of both companies. 

Read here for the full list.

— Pia Singh

The U.S. dollar is rising along with Treasury yields after Wednesday's Federal Reserve policy statement.

The dollar index hit its highest level since March 9 on Thursday morning, and its 50-day moving average surpassed the 200-day moving average — a so-called "golden cross."

Read more about this technical indicator and what it means for the global economy on CNBC Pro.

— Jesse Pound

All 11 S&P 500 sectors traded lower on Thursday, helping to push the broad index down about 1%.

Consumer discretionary led the sectors lower with a loss of more than 2%, dragged on by 4% drops in PulteGroup and D.R. Horton. Real estate was the second worst performing sector at 1.8% down, followed by materials with a 1.5% loss.

Utilities stocks were able to pare losses the most, with the index down just 0.2%.

— Alex Harring

Jefferies believes Petrobras' pre-salt oil portfolio offshore Brazil gives it one of the strongest asset bases among global energy names. The firm initiated coverage on Petrobras with a buy rating.

"Its new strategic/financial envelope has removed uncertainties, turning PBR into a ... upstream volume growth story. The market underappreciates PBR's high margin pre-salt assets & cash returns ability in an US$80/bbl oil world," analyst Alejandro Anibal Demichelis wrote in a Thursday note. 

Demichelis cited "stronger governance than the market assumes." Petrobras was notably centered in Operation "Lava Jato," or "Car Wash" in Brazil beginning in 2014. The company was found to have been in a multimillion dollar kickback scheme with prominent politicians and corporations in return for contracts.

Jefferies' call comes as crude prices have gained recently. This month, West Texas Intermediate futures are up more than 6%.

The full story on the call can be found here.

— Hakyung Kim

Retail traders bought $755 million worth of securities on Wednesday as the market digested the latest Federal Reserve update, according to Vanda Research, showing less appetite than usual to snap up shares amid a sell-off.

The $755 million calculated by Vanda is a net figure, meaning it shows the amount purchased after subtracting for sold stocks. Vanda's Marco Iachini said more buying from everyday investors could take place on Thursday given the proximity of the speech from Federal Reserve Chair Jerome Powell to the market's close a day earlier.

"It becomes evident that yesterday's net buying activity fell significantly short of anticipated levels, registering at nearly half of the amount forecasted by a basic linear regression model," Iachini, the firm's senior vice president, said Thursday.

Stocks slid in Wednesday's session, with losses intensifying during and following Powell's remarks.

— Alex Harring

Third quarter trends for ride sharing companies have been strong so far and could lead to better than expected results for Uber and Lyft, according to JPMorgan.

"In aggregate, 3Q QTD trends through August continue to be positive, with growth accelerating or stable across most markets relative to 2Q levels, and we think it bodes well for both Uber & Lyft, in addition to int'l share gains for Uber amid rationalization of competition," analyst Doug Anmuth said in a note to clients.

JPMorgan has an overweight rating on Uber, and a neutral rating on Lyft and DoorDash.

— Jesse Pound

Gold mining stocks slid alongside the precious metal Thursday morning.

The VanEck Gold Miners ETF (GDX) dropped nearly 3% just after 10 a.m. Eastern time, and it's on pace for its worst day since Aug. 2 when it lost 3.14%.

Week to date, the fund is off nearly 3%, dragged down by Equinox Gold, which is off 16.7%, and First Majestic Silver, down 10.7%.

Gold futures dropped more than 1% on Thursday morning, as the dollar and Treasury yields surged. The action follows a day after the Federal Reserve indicated interest rates would remain higher for longer.

— Darla Mercado, Gina Francolla

Nutanix jumped 2% in Thursday's session after Bank of America upgraded shares to buy from neutral and called the company a multi-lever growth story.

"We see fundamentals improving over the next few years including ACV billings, revenue, and operating margin. We see renewals driving a higher portion of ACV billings growth post F24, which can lead to more stable revenues, and expect operating leverage through lower cost of renewals," analyst Wamsi Mohan said in a Thursday note.

Nutanix, which offers cloud services and software solutions, recently announced a new software-defined platform called "GPT-In-A-Box." The product is designed to simplify adoption of generative AI while allowing companies to maintain control over their data.

To read more about the call, click here.

— Hakyung Kim

The three major indexes opened Thursday's session lower.

The Dow slipped 0.4% shortly after the opening bell. The S&P 500 lost 0.6%, while the Nasdaq Composite dropped 1.1%.

— Alex Harring

With just Thursday and Friday left in the trading week, the three major indexes are on track for losses. Here's where they stand week to date:

• The Dow has dropped 0.5%.
• The S&P 500 has slid 1.1%.
• The Nasdaq Composite has shed 1.7%.

— Alex Harring

Initial jobless claims tumbled last week to their lowest level since late January, in a sign that the labor market is still unusually tight.

First-time filings for the week ended Sept. 16 totaled a seasonally adjusted 201,000, well below the Dow Jones estimate for 225,000 and a decline of 20,000 from the previous period, the Labor Department reported Thursday.

Continuing claims totaled 1.662 million, a drop of 21,000 and below the FactSet estimate for 1.692 million.

In other economic news, the Philadelphia Federal Reserve's manufacturing index for September came in at -13.5, representing the percentage difference between firms reporting expansion versus contraction. The Dow Jones estimate was for a zero reading; the September number was a sharp decline from the previous reading of 12.

It was the 14th negative number in the last 16 months and came amid declines in new orders, unfilled orders and delivery times.

—Jeff Cox

Here are the stocks making notable moves before the opening bell.

• Darden Restaurants — The Olive Garden parent slipped 2.6% despite beating expectations of analysts polled by LSEG on both lines for its fiscal first quarter and reiterating its outlook for the 2024 fiscal year. Darden's fine-dining restaurants saw same-store sales shrink 2.8%.
• FedEx — Shares gained more than 5% after fiscal first quarter earnings results that topped expectations. FedEx reported adjusted earnings of $4.55 per share, greater than the $3.71 forecasted by analysts polled by LSEG. Its revenue of $21.7 billion was slightly below expectations of $21.74 billion.
• KB Home — The homebuilder stock fell more than 3% despite KB Home beating expectations in its third-quarter report. The company generated $1.80 per share on $1.59 billion of revenue. Analysts surveyed by LSEG were looking for $1.43 per share on $1.48 billion of revenue. The company did say it expected its housing gross margin to shrink in the fourth quarter.

Read the full list here.

— Sarah Min

Broadcom shares slumped more than 6% in premarket trading on a report that Alphabet is considering dropping Broadcom as a supplier for its AI-related chips known as tensor processing units.

According to the report from The Information, citing a person familiar with the matter, Alphabet is also weighing using Marvell Technology for certain chips.

Marvell shares rose 3.7% before the bell.

— Samantha Subin

Cisco Systems fell 5% in premarket trading Thursday after the IT company announced it will acquire Splunk, a cybersecurity company, for $157 per share. Shares of Splunk lost more than 1%.

The deal is worth about $28 billion. By combining the companies they can help organizations with threat prediction and prevention in an increasingly AI-powered world, they said in the announcement.

— Tanaya Macheel

Darden Restaurants slid more than 1% in premarket trading after the Olive Garden parent said fine-dining sales fell more than expected.

The company, which is also now the owner of Ruth's Chris Steak House, said its upscale offerings struggled against comparable sales level. Still, Darden was able to beat expectations of analysts polled by LSEG on both lines for the first quarter while also reaffirming its full-year outlook.

The stock has climbed just over 8% this year.

— Alex Harring, Amelia Lucas

The Bank of England decided not to hike rates again on Thursday, breaking a streak of hikes at 14 consecutive meetings. The central bank's policy rate will remain at 5.25%.

"There are increasing signs of some impact of tighter monetary policy on the labour market and on momentum in the real economy more generally," the Bank said in a statement.

The vote was close, with four the nine-member policy committee voting to raise rates.

— Jesse Pound

Tech shares have led the losses this week as investors rethought buying growth-oriented stocks in a higher-for-longer interest rate environment.

Tesla and Nvidia were both around 2% lower in premarket trading Thursday. Alphabet and Meta Platforms slid about 1.5%.

— Alex Harring

Shares of Broadcom dropped more than 5% after The Information reported the Google discussed dropping the chipmaker as an AI semiconductor supplier by 2027. The report, which cited a person familiar with the matter, said Google would design its chips in this scenario.

The report also noted that Google has been moving to replace interface networking chips from Broadcom with those made by Marvell Technology. Shares of Marvell climbed 3.4%, while Alphabet slipped 1.2%.

Marvell, Google and Broadcom did not immediately respond to CNBC's request for comment.

— Fred Imbert

Fundstrat technical strategist Mark Newton advised clients keep an eye on the 4,400 level on the S&P 500 following Wednesday's post-Fed downturn.

"I suspect that SPX and QQQ might find it difficult to immediately break down under August lows, and any SPX weakness down under 4400 likely creates an attractive Risk-reward into end of quarter," Newton wrote.

"Bottom line, while there's no specific technical proof just yet that markets are bottoming, the next 2-3 days should provide some evidence of SPX trying to stabilize," he added. "This could materialize based on Technology having pulled back to technical support near August lows, along with cycles starting to turn back higher into October."

The S&P 500 closed Wednesday's session at 4,402.

— Fred Imbert

U.S. Treasury yields climbed on Thursday as investors digested the Federal Reserve's interest rate decision and forward guidance.

At 3:40 a.m. ET, the yield on the 10-year Treasury was up by around seven basis points to 4.4172% as it extended its 16-year high. It started trading at levels last seen in 2007 earlier this week. The 2-year Treasury was more than three basis points higher to 5.1588%, hovering around levels last reached in 2006.

— Sophie Kiderlin

European markets opened lower ahead of a raft of interest rate decisions from central banks in England, Turkey, Sweden, Switzerland and Norway.

The pan-European Stoxx 600 index was down 0.6% at the start of trading, with all sectors in the red. Mining stocks saw the biggest drop, down 1.6%, while travel and leisure was down 1.2%.

— Hannah Ward-Glenton

New Zealand's gross domestic product expanded 0.9% quarter-on-quarter in the three months ended June, more than the 0.5% growth expected by economists.

The figure also followed a revised 0.0% growth rate in the first quarter, which means the country was not in a technical recession. The previous reported figure was -0.1%.

On a year-on-year basis, GDP climbed 3.2%, higher than the previous quarter's 2.9% expansion and also higher than the 3.1% expected by the Reuters poll.

— Lim Hui Jie

Shares of K-pop agency Hybe slid over 4% in early trade even as the company reported that all members of boy group BTS have renewed their contracts with Bighit Music, a subsidiary of Hybe.

The share price drop is largely in line with the decline in the broader Kospi index, which fell 1.07% on Thursday.

The seven member boy group debuted in 2013, and all renewed their contracts in October 2018. While the label did not announce when the new contract will end, South Korean media cited a Hybe statement saying "all of BTS will be together after 2025."

— Lim Hui Jie

Treasurys are looking good — at least for now, says DoubleLine's founder and CEO Jeffrey Gundlach.

"I think Treasury bonds are attractive," he said earlier on CNBC's "Closing Bell." "I find them quite attractive at this moment — not for the long term, more for the short term." He pointed to the rising interest expense the government is facing on these bonds as yields rise, which can become a problem down the line.

Separately, Gundlach cheered the Federal Reserve's decision to keep rates steady in September.

"I think this is really one of the best Fed decisions that we've had in a while," he said. "They did upgrade the forecasts for next year, unemployment not as bad, economy a little stronger....We have a lot of indicators looking at softness."

Treasury yields rose on Wednesday after the Fed said it plans to declare another rate hike before the end of 2023, pushing yields on the 2-year Treasury and 10-year Treasury to multi-year highs.

— Pia Singh

Though the Federal Reserve skipped a rate hike in September, an increase is looming – and that could rock stocks as the year winds down, says Alex McGrath, chief investment officer for NorthEnd Private Wealth.

"Twelve of 19 governors at this point currently favor one more interest rate increase in the next two meetings before the end of the year," he said.

"Heading into the fourth quarter with rate expectations remaining elevated, we are more than likely in for a choppy end of the year as the markets digest an outlook less favorable for the growth assets that have driven the market for 2023," McGrath added.

— Darla Mercado

These are the stocks posting the biggest moves after the closing bell:

• FedEx — The stock gained over 5% after the bell on higher-than-expected fiscal first quarter earnings results. FedEx's adjusted earnings came in at $4.55 per share, versus the $3.71 forecasted by analysts, per LSEG. The firm's revenue of $21.7 billion came in slightly below analyst expectations of $21.74 billion.
• KB Home — Shares of the homebuilding company lost 2% in extended trading hours despite better-than-expected third quarter revenue and earnings results. KB Home reported earnings of $1.80 per share on revenue of $1.59 billion, better than the $1.43 per share on $1.47 billion in revenue expected by analysts polled by LSEG.
• Klaviyo — The marketing automation company edged down 1% after its stock market debut earlier in the day. Shares of Klaviyo opened at $36.75 on the New York Stock Exchange, higher than the company's offering price of $30 per share.

— Lisa Kailai Han

Futures were little changed on Wednesday evening. Here's how major indexes were trading after hours:

• Futures tied to the Dow Jones Industrial Average added 9 points, or 0.03%.
• S&P 500 futures dipped 0.02%.
• Nasdaq 100 futures edged lower by 0.04%.

— Pia Singh