NEW YORK (AP) — Wall Street is falling on Thursday and heading toward a rare three-day losing streak.
The S&P 500 sank 0.7% in early trading. That was deeper than its dips from the prior two days, and the main measure of Wall Street’s health is on track for its longest losing streak in more than a month.
The Dow Jones Industrial Average was down 107 points, or 0.2%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1% lower. All three indexes are still near their records set at the start of the week.
Stocks felt pressure from several 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 several more through the end of next year. That was critical for Wall Street, which has sent U.S. stocks to records on a blistering run since April in large part because of expectations for many cuts. Easier rates can boost the economy and make investors more willing to pay high prices for stocks, bonds and other investments.
But a stronger-than-expected economy could remove some of the Fed’s urgency, particularly when cuts to rates carry the risk of worsening inflation that’s already stubbornly high. If the Fed doesn’t cut rates as many times as investors expect, it would empower criticism that’s already built saying the U.S. stock market has become too expensive after prices rose so much, so quickly.
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. The two-year Treasury yield, which more closely tracks expectations for the Fed, climbed more sharply.
One of Thursday’s better-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.
The second report said the U.S. economy grew at a stronger pace during the spring than earlier thought, while the 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 19.1% for the largest loss in the S&P 500 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.
The heaviest weights on the market were Big Tech stocks. They’ve been the market’s biggest superstars in recent years and have carried Wall Street to record after record. But they’re also facing some of the harshest criticism that the frenzy around artificial-intelligence technology has sent their prices too high.
Nvidia fell 1.8%, Broadcom lost 2.9% and Alphabet sank 2.2%.
Starbucks was swinging between modest gains and losses after the coffee chain announced a $1 billion plan to restructure, including the closure of stores and the cutting of 900 nonretail jobs. It was most recently down 0.7%.
In stock markets abroad, indexes fell in Europe following a more muted finish in Asia.
Germany’s DAX lost 1%, and France’s CAC 0 fell 0.7% for two of the bigger moves.
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AP Writers Matt Ott and Teresa Cerojano contributed.
