US stocks fell amid back and forth trading Thursday as investors processed corporate headlines.
The S&P 500 fell 1.1%, the Dow Jones Industrial Average dropped 170 points to fall 0.6%, and the Nasdaq dropped 1.5%.
The moves come after the modest rebound Wednesday, which followed the worst day for the market since June of 2020.
Investor attention turned to “buy now, pay later” companies, as the US Consumer Financial Protection Bureau (CFPB) announced it is going to begin regulating the sector due to concerns their financial products harm consumers. Affirm (AFRM) shares, a leader in the space, dropped 1.4%.
Meanwhile, shares of Adobe fell 17% after it announced that it was acquiring design startup Figma for $20 billion so as to expand its line of hybrid-work-friendly platforms.
Among economic data investors were examining, for a fifth straight week, initial jobless claims fell, hitting their lowest reading since May. First time unemployment insurance filings came in at 213,000 for the week ending Sept. 10th, down from 222,000 the week prior. Economists had predicted there would be 227,000, according to Bloomberg consensus estimates.
Commerce Department data showed consumer spending remained up in August, despite continued inflationary pressures. Retail sales were up unexpectedly by 0.3% in August, following a downward revision of 0.4% in July.
In bonds, the 10-year Treasury note climbed over 3.45% as the 2-year Treasury went past 3.8%, striking a 15-year high after the shock inflation data for August earlier in the week.
August’s Consumer Price Index came in at a hotter than expected 8.3% year over year, causing a selloff as investors confronted the likelihood of more aggressive Fed policy action over the course of the rest of the year.
On Wednesday Bank of America economists said in a note, that the Federal Reserve would likely warn investors that the risks of a hard landing for the economy are rising at their next policy meeting next week.
BofA strategists led by Michael Gapen wrote, “This will likely come through projections that show less growth, higher unemployment, and a more restrictive policy rate stance. While the Fed is still likely to view a soft landing as a modal outcome, the window appears to be narrowing.”
The CME Fedwatch Tool showed investors pricing in a nearly 30% chance the Federal Reserve would decide upon a full 100 basis point interest rate hike at the next FOMC meeting, due to indication that inflationary pressures are growing increasingly entrenched.
Ethereum completed its highly anticipated “Merge” upgrade on Thursday, shifting the token to a more energy efficient method of mining. Ethereum (ETH-USD) was trading just below $1,600 Thursday morning, as bitcoin (BTC-USD) held above $21,000.
Oil prices moved downward meanwhile as energy continued to prove volatile. West Texas Intermediate was down 3.6% to 85.27 per barrel, wiping out Wednesday’s gain, as Brent crude futures fell 3.4% at $90.95 per barrel.
