(Updates with index/price moves and company/geopolitical news from the first paragraph.)
US equity indexes fell, with technology emerging as the worst-performing sector, amid concerns that surging crude oil prices would push the inflation rate higher as no end is in sight for the Iran war.
The Nasdaq Composite fell 1.3% to 27,185.7, the S&P 500 declined 0.6% to 7,756.2, and the Dow Jones Industrial Average slid 0.1% to 51,119.5 after midday Thursday. Energy and consumer staples led gainers.
Tankers are facing a higher risk of attacks and intimidation as they try to get critical shipments through the Strait of Hormuz after Iran issued new warnings that it would block routes that it has not authorized, sources told Reuters.
Tropical Storm Isaias continues to strengthen ahead of landfall on the northern Gulf Coast by this weekend, CNN reported. The storm rapidly intensified into the Atlantic season's first hurricane on Wednesday night, the news report added. Chevron (CVX) has begun shut-in procedures for production at four Gulf of America facilities and is evacuating workers as Isaias approaches, the company said.
Front-month US West Texas Intermediate crude oil contract advanced 3.8% to $91.67 per barrel, and global benchmark Brent jumped 4.3% to $104.51 per barrel.
US initial jobless claims fell sequentially to 197,000 in the week ended Oct. 3 from an upwardly revised 199,000, compared with expectations for 200,000 in a Bloomberg-compiled survey. The four-week moving average fell to 198,000 from 200,500 in the previous week, marking a fifth straight weekly decline.
The Treasury's auction to borrow $22 billion through 30-year bonds hit a high yield of 5.618% on Thursday, up from the 5.308% high in the previous auction, reflecting an increase in borrowing costs. The bid-to-cover ratio, which measures demand, declined to 2.54 from 2.61 in the previous auction.
Treasury yields traded mixed after midday, with the two-year down less than one basis point to 4.76%. The 10-year rate dropped 3.8 basis points to 5.24%, and the 30-year yield slumped 5.1 basis points to 5.61%. Both the 10- and 30-year yields traded higher earlier in the session, close to their highest levels since 2002.
The CME FedWatch tool showed that the probability of the Federal Reserve leaving its target rate unchanged in October was 81% on Thursday afternoon, following the release of September's meeting minutes on Wednesday. However, the market sees a 70% likelihood that the Fed will raise its target rate by 25 basis points in December and assigns a 45% probability of another move higher of the same magnitude in March to bring inflation back to its 2% target.
Microsoft (MSFT) and Adobe (ADBE) are being suspended from the Permanent Labor Certification Program due to "multiple active federal investigations," US Secretary of Labor Keith Sonderling said Thursday at a press conference. Cognizant Technology Solutions (CTSH), Infosys (INFY), Wipro (WIT), Tata, HCL and Capgemini have also been suspended from the program.
Sonderling said the Labor Department won't accept or process new applications under the program for a host of companies, including Cognizant Technology Solutions (CTSH), Infosys (INFY), Capgemini, Wipro (WIT), and HCL Infosystems.
Starbucks (SBUX) has explored a takeover of Chipotle Mexican Grill (CMG) and has worked with advisers in recent months on a potential takeover proposal, The Financial Times reported Thursday, citing people familiar with the matter. Chipotle's shares jumped 7.3%, leading gainers on the S&P 500.
Skydance (SKYD) completed its Warner Bros. takeover with roughly $17 billion in investment from Chairman David Ellison and his family, Bloomberg reported Thursday, citing public filings. Skydance shares rose 5.2%, among the S&P 500's top gainers.
PepsiCo (PEP) lowered its full-year earnings growth outlook amid projected margin pressures in its North American business, after fiscal Q3 results topped market expectations.