Wall Street closed lower on Thursday, with signs of weakness in regional banks spooking investors already on edge over U.S.-China trade tensions.
Shares of regional banks and investment bank Jefferies tumbled on Thursday as fears mounted around some bad loans lurking on Wall Street.
Zions dropped more than 13%, while Jefferies Financial Group Inc. fell 11%. The SPDR S&P Regional Banking ETF lost more than 6%
The bankruptcies of two auto industry-related companies this year have raised concerns about loose lending practices, especially in the opaque private credit market. That’s left both the banking industry and investors concerned about whether instances of loans gone wrong indicate a burgeoning crisis.
The latest signs of trouble came when Zions said Wednesday evening it faced a sizable charge because of bad loans to a couple of borrowers. Despite expecting this was an isolated incident, the bank said that it will encourage its counsel to have an independent review.
Western Alliance then alleged Thursday a borrower had committed fraud. That rattled investors despite the company saying it could reaffirm its guidance and 2025 outlook.
Market Snapshot
The S&P 500 declined 0.63% to end the session at 6,629.07 points. The Nasdaq declined 0.47% to 22,562.54 points, while the Dow Jones Industrial Average declined 0.65% to 45,952.24 points.
Market Movers
Taiwan Semiconductor Manufacturing fell 1.6%, reversing premarket gains, after third-quarter profit beat analysts' estimates. Revenue surged 30% from a year earlier to 989.92 billion New Taiwanese dollars, boosted by strong demand for its AI semiconductors, which it manufactures for chip makers like Nvidia.
Advanced Micro Devices fell 1.7%. The stock has risen nearly 94% in 2025, according to Dow Jones Market Data. HSBC analyst Frank Lee raised his price target on AMD to $310 from $185 and reaffirmed his Buy rating, saying that the " OpenAI deal implies massive AI revenue upside potential, which is still underestimated by consensus," he wrote.
AMD rival NVIDIA, the leading maker of artificial-intelligence chips, rose 1.1%. Semiconductor peer Micron Technology gained 5.5%, following a flood of supportive commentary from analysts on Thursday.
Still, heavyweight AI-related stocks dipped, with Palantir Technologies Inc. and Meta Platforms, Inc. both off 0.8%, and Tesla Motors losing 1.5% .
Salesforce gained 4% after the software vendor announced financial targets for the coming five years. Salesforce told investors at the company's annual Dreamforce conference that it expects revenue of more than $60 billion in 2030. It also guided for an organic year-over-year revenue growth rate above 10% in 2026 through 2030.
Hewlett Packard Enterprise dropped 10% after surprising Wall Street with weaker-than-expected guidance for 2026. During an analyst meeting at the New York Stock Exchange on Wednesday, the server and cloud company said it expects fiscal 2026 adjusted earnings of between $2.20 and $2.40 a share, with revenue growing between 5% and 10%. Analysts surveyed by FactSet had expected 2026 adjusted earnings of $2.43 a share with revenue growth of 17%.
Kenvue Inc fell 13%. A lawsuit filed in the U.K. on Tuesday represents more than 3,000 people who allege Johnson & Johnson, which spun off Kenvue in 2023, knowingly sold baby powder that was contaminated with asbestos. The lawsuit targets both Johnson & Johnson and Kenvue UK Ltd., a subsidiary. "We are cautious about the financial implications for Kenvue, " Citi Research analysts wrote on Thursday.
United Airlines declined 5.6%. The carrier beat third-quarter adjusted earnings expectations and offered a better-than-expected outlook, but revenue of $15.2 billion, higher than last year, was slightly lower than analysts' calls for $15.3 billion.
Market News
Gold Hits Another Record with Bank Worries in Focus Alongside Trade, Rate Cuts
Gold and silver soared again to new all-time highs Thursday, sparked by concerns about credit quality in the economy, in addition to U.S.-China trade frictions and growing expectations for further interest rate cuts by the Federal Reserve.
Broader markets were hit as two major regional banks disclosed problems with loans involving allegations of fraud, adding to concerns about wider credit-related losses in the system, following the bankruptcies of two auto industry-related companies, which have helped boost demand for safe-havens such as gold and silver.
"When you see one cockroach, there are probably more," JPMorgan Chase CEO Jamie Dimon said on the bank’s earnings conference call earlier this week, referring to the collapse of First Brands and Tricolor Holdings.
Oracle Expects Cloud Sales of $166 Billion by 2030 as Business Expands
Oracle said on Thursday it expects cloud infrastructure revenue to grow to $166 billion in fiscal 2030, which would make up nearly 75% of its total sales by then.
Chief Executive Officer Clay Magouyrk gave the cloud infrastructure prediction during a meeting with financial analysts, where he said new bookings were coming in from a range of customers, not just OpenAI.
