Fears of renewed trade tensions with China push major indices lower.
Wall Street's major indexes fell as a rally in technology stocks faltered, adding to losses sparked by fears of renewed trade tensions.
After a mixed day in European stock markets, losses on Wall Street were widespread on Thursday, with the energy sector the only one of 11 industrial sectors to advance in the S&P 500.
The Dow, which had set records for the past three days, led the major indexes down 1.3 percent.
“It doesn't take much of an excuse for markets to take gains when they've performed so well,” said Art Hogan, chief market strategist at B Riley Wealth.
Market watchers have been fixated for days on the “overbought” status of tech stocks following massive gains in artificial intelligence stocks so far in 2024.
The VIX volatility index rose about 10 percent, in a move some linked to mounting political pressure on U.S. President Joe Biden to drop out of the 2024 campaign.
Spartan Capital's Peter Cardillo said speculation about Biden “could create some near-term election anxiety” after more investors expected a Donald Trump victory following the June presidential debate.
Major European stock markets closed the day mixed, with London getting a boost from the previous day's rise in oil prices.
Oil prices had risen 2 percent on Wednesday following signs of strengthening crude demand in top consumer the United States, although the market stabilized on Thursday.
The dollar strengthened after losses caused by growing expectations that the U.S. Federal Reserve would cut interest rates at least once this year.
As expected, the European Central Bank (ECB) kept its key interest rates steady on Thursday as it awaits firm signs that consumer price increases are stable before cutting borrowing costs again.
The bank kept its key deposit rate at 3.75 percent after the first cut in June ended an unprecedented run of hikes to tame runaway inflation.
But ECB chief Christine Lagarde said there was no predetermined rate path and a decision at the September meeting was “completely open” and would depend on data.
Tech companies took a hit on Wednesday after a report said US President Joe Biden would target companies supplying China with key semiconductor technology.
Biden is reportedly considering imposing strict restrictions on companies such as Tokyo Electron and Dutch firm ASML if they continue to allow Beijing access to their chip technology.
Sentiment was also hurt by Trump's comments that Taiwan, a crucial chip supplier (home to TSMC and other major producers), should pay the US for helping the island defend itself militarily against China.
