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

Alex Harring
Pia Singh

Stocks fell Thursday as Treasury yields popped to multiyear highs and investors grew worried that lawmakers would be unable to prevent a shutdown.

The Dow Jones Industrial Average dropped 370.46 points, or 1.08%, to close at 34,070.42. The S&P 500 slid 1.64% to 4,330. The Nasdaq Composite retreated 1.82% to 13,223.98.

It was the third straight day of losses for the three indexes and the worst session since March for the S&P 500. The Dow and S&P 500 were on track to end the week down more than 1% and 2%, respectively, while the Nasdaq was poised to fall more than 3%.

The U.S. 10-year Treasury yield hit a high of 4.494%. Earlier in the day, the rate reached its highest level since 2007, with the latest catalyst being weekly jobless claims data showing a still strong labor market that could encourage the Fed to stay in hiking mode. Weekly jobless claims decreased by 20,000 to 201,000 for the week ending Sept. 16, much lower than the 225,000 claims expected by economists polled by Dow Jones. It was the lowest volume of new unemployment claims since January.

The 2-year yield touched a high of 5.202%, reaching levels seen not since 2006 in the session.

"That's kind of a warning sign for markets right now," said Adam Turnquist, chief technical strategist at LPL Financial, of recent yield moves. He added that yields are "certainly weighing on risk appetite at this point."

Losses intensified following news that House Republican leaders sent the chamber into recess on Thursday, bolstering fears 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.

The moves come a day after the Federal Reserve announced it would leave interest rates unchanged, but forecasted another rate hike before the end of the year. The central bank also indicated fewer rate cuts next year, essentially saying it would need to keep rates higher for longer because stubborn inflation.

Fed Chair Jerome Powell commented after the decision that a soft landing for the economy was still possible, but not his baseline scenario. 

"We're seeing a bit of a clash between, I think, what expectations are and how things are actually going," said Shelby McFaddin, investment analyst at Motley Fool Wealth Management. "When you're an investor ... it doesn't seem ideal because it seems to indicate a prolonged higher interest rate environment."

Tech shares have led the losses this week as investors rethink buying growth-oriented stocks if interest rates remain high. Tesla, Alphabet and Nvidia all lost more than 2%.

FedEx bucked the negative trend, gaining 4.5% a day after the delivery company posted adjusted earnings of $4.55 per share in its fiscal first quarter, while analysts called for $3.73 per share, per LSEG.

Thu, Sep 21 2023 4:04 PM EDT

Stocks end lower

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

Thu, Sep 21 2023 3:35 PM EDT

Nvidia slides 2.9%, extending month-to-date loss to almost 17%

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

Thu, Sep 21 2023 3:35 PM EDT

Deutsche Bank upgrades Five9 to buy

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

Thu, Sep 21 2023 3:29 PM EDT

House Republican leaders send chamber into recess, bolstering shutdown fears

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

Thu, Sep 21 2023 3:22 PM EDT

Thursday's slides help place indexes on pace for weekly loses

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

— Alex Harring

Thu, Sep 21 2023 2:59 PM EDT

Stocks remain lower entering final hour

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

Thu, Sep 21 2023 2:39 PM EDT

Enphase Energy on pace for multiple re-expansion, according to research firm

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

Thu, Sep 21 2023 2:09 PM EDT

Vanda Research reports declining interest in AI sector

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

Thu, Sep 21 2023 1:40 PM EDT

Cisco, Visa leading Dow losses

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

Thu, Sep 21 2023 1:12 PM EDT

Barclays initiates overweight rating on Organon

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

Thu, Sep 21 2023 1:11 PM EDT

Stocks posting the biggest midday moves

Check out the companies making headlines in midday trading.

  • Cisco SystemsSplunk — 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

Thu, Sep 21 2023 12:50 PM EDT

Dollar index climbs, makes 'golden cross'

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."

See Chart...
The dollar index has gained since the Federal Reserve's policy statement on Wednesday afternoon.

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

— Jesse Pound

Thu, Sep 21 2023 12:13 PM EDT

All 11 S&P 500 sectors trade down

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

Thu, Sep 21 2023 11:48 AM EDT

Jefferies initiates buy rating on Petrobras

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

Thu, Sep 21 2023 11:28 AM EDT

Retail traders bought less than expected on Fed day but could pick up shares Thursday

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

Thu, Sep 21 2023 10:50 AM EDT

Third-quarter mobility trends are positive for Uber, JPMorgan says

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

Thu, Sep 21 2023 10:22 AM EDT

VanEck Gold Miners ETF heads for worst day in more than a month

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

Thu, Sep 21 2023 9:57 AM EDT

Nutanix rises as Bank of America turns bullish

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.

See Chart...
Nutanix stock

— Hakyung Kim

Thu, Sep 21 2023 9:31 AM EDT

Stocks open lower

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

Thu, Sep 21 2023 9:13 AM EDT

Stocks head for losing week

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:

— Alex Harring

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