Wall Street stumbles again for a 3rd straight loss
[September 26, 2025] By
STAN CHOE
NEW YORK (AP) — Wall Street stumbled to a third straight loss on
Thursday as U.S. stocks gave back more of their big gains for the year
so far.
The S&P 500 fell 0.5% and marked its longest losing streak in more than
a month. The Dow Jones Industrial Average dropped 173 points, or 0.4%,
and the Nasdaq composite sank 0.5%. All three indexes are still near
their records set at the start of the week, though.
Stocks felt pressure from reports showing the U.S. economy may be
stronger than economists thought. While that’s encouraging news for
workers and for people looking for jobs, it could make the Federal
Reserve less likely to cut interest rates several times in the coming
months.
The Fed just delivered its first cut of the year last week, and
officials had penciled in more through the end of next year. That was
critical for Wall Street after U.S. stocks shot to records since April
in large part because of expectations for rate cuts. Easier rates can
boost the economy and make investors more willing to pay high prices for
stocks and other investments.
But a stronger-than-expected economy could remove some of the Fed’s
urgency, particularly because cuts to rates carry the risk of worsening
inflation that’s already stubbornly high. If the Fed doesn’t cut rates
as often as investors expect, it would empower criticism that the U.S.
stock market is too expensive after rising so much, so quickly.
“Buckle up,” warned Jonathan Krinsky, chief market technician at
financial services firm BTIG.
Stocks look to be in their most vulnerable position since their April
lows given how much complacency has built up and how the rubber band has
recently been “as stretched as it gets in some parts of the market,”
Krinsky wrote in a research report.
Wall Street’s ultimate hope is that the U.S. economy stays in a delicate
balance where it’s slow enough to convince the Fed to cut rates but
doesn't become so weak that it leads to a recession.
Treasury yields ticked higher in the bond market as traders pared bets
for the number of upcoming cuts to rates by the Fed. The yield on the
10-year Treasury rose to 4.17% from 4.16% late Wednesday.
One of Thursday’s stronger-than-expected economic reports said that
fewer U.S. workers filed for unemployment benefits last week. That could
be a signal that the pace of layoffs is slowing.
Another report said the U.S. economy grew at a faster pace during the
spring than earlier thought, while a third said orders blew past
economists’ expectations last month for U.S. manufactured goods with a
relatively long life span.
On Wall Street, CarMax tumbled 20.1% after the seller of used autos
reported a weaker profit for the latest quarter than analysts expected.
It sold fewer vehicles during the quarter than it had a year earlier. It
also was hurt because it increased its expectations for losses from
loans made in earlier years.
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Traders Edward Curran, left, and Robert Charmak work on the floor of
the New York Stock Exchange, Wednesday, Sept. 17, 2025. (AP
Photo/Richard Drew)
Jabil fell 6.7% even though it reported a stronger profit for the latest
quarter than analysts expected, thanks in part to demand coming because
of artificial intelligence. It also gave forecasts for upcoming revenue
and profit that topped analysts’ expectations.
Such moves typically send a stock’s price higher, but Jabil came into
the day with an already huge gain of 56.6% for the year so far. That was
more than quadruple the S&P 500’s rise over the same time.
Another AI winner, Oracle, gave back 5.6%. Earlier this month, it surged
to its best day since 1992 after announcing several big contracts signed
because of AI.
Starbucks slipped 0.5% after the coffee chain announced a $1 billion
plan to restructure, including the closure of stores and the cutting of
900 nonretail jobs.
On the winning side of Wall Street was IBM. It rose 5.2% after HSBC
announced a promising trial with IBM of quantum computing in hopes of
improving bond trading. The bank said they delivered an improvement of
up to 34% in predicting how likely a trade would be filled at a quoted
price.
Companies are racing to develop quantum computing in order to solve
complex problems beyond the reach of classical computers.
KB Home swung between gains and losses after the homebuilder reported a
stronger profit for the latest quarter than analysts expected. CEO
Jeffrey Mezger said he was encouraged to see mortgage rates ease through
the quarter, which could encourage more potential customers to buy
homes.
Mortgage rates have been sinking on expectations for coming cuts to
rates by the Fed. KB Home’s stock finished the day with a dip of 0.6%.
All told, the S&P 500 fell 33.25 points to 6,604.72. The Dow Jones
Industrial Average dropped 173.96 to 45,947.32, and the Nasdaq composite
sank 113.16 to 22,384.70.
In stock markets abroad, indexes dipped in Europe following modest moves
across much of Asia.
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AP Writers Matt Ott and Teresa Cerojano contributed.
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