US stock indices fell on Thursday as investors questioned whether the Treasury’s plan to ease borrowing costs would deliver anything more than a short-lived benefit, while a jump in energy prices intensified inflation concerns. The S&P 500 declined 0.9%, the Nasdaq slipped 0.7%, and the Dow dropped 704 points.
Treasury yields climbed across the curve amid worries that measures to support notes and bonds could ultimately exacerbate inflation pressures, given abundant dollar liquidity. Borrowing costs were further pushed higher by rising fuel and gas prices after President Trump said the US had entered an “economic war” with Iran, signaling prolonged disruptions to tanker traffic through the Persian Gulf.
Financial stocks were broadly weaker, with JPMorgan down 1.6% and Morgan Stanley off 3.2%. Major AI hyperscalers also mostly retreated after muted financial results from OpenAI, which failed to match the growth pace of rival Anthropic. Walmart tumbled 9.1%—its steepest one-day drop in four years—after its second-quarter sales came in below expectations.
