US stocks fall: Dow, S&P 500, Nasdaq drop on jobless claims dip; investors watch fed, Starbucks job cuts, Carmax earnings

US stocks fell on Thursday as investors reacted to an unexpected drop in jobless claims, making it harder to guess what the Federal Reserve will do with interest rates amid disagreements among its members. Dow Jones dropped 0.3%, S&P 500 fell 0.6%, and Nasdaq sank 0.9% after two straight days of losses on Wednesday.

Stock rally slows down because investors are debating if AI enthusiasm is making tech stocks too expensive. Optimism from the Federal Reserve’s plan to lower interest rates is fading because some policymakers do not agree on cutting rates again this year, as per Yahoo Finance report.

US jobless claims drop, GDP surges

218,000 Americans filed for unemployment in the week ending Sept. 20, down from 232,000 previously; continuing claims also slightly fell to 1.92 million, as per the US Department of Labor. US GDP growth rebounds: Q2 GDP rose at an annual rate of 3.8%, recovering from a 0.6% drop in Q1, higher than the estimated 3.3%.
Investors are also waiting for other economic data, including personal consumption and existing home sales, which will help show how the economy is doing. On Friday, the Personal Consumption Expenditures index for August will be released. It is the Fed’s preferred inflation measure and may influence future rate decisions.

Costco, Starbucks, and CarMax updates

Investors look forward to Costco’s quarterly earnings report, anticipating higher sales as shoppers hunt for deals amid economic uncertainty.

Starbucks announced plans to cut 900 corporate jobs and close unprofitable stores as part of its turnaround plan. Employees will be notified on Sept. 26 and will get severance and support packages, as per the report by Yahoo Finance. Starbucks CEO Brian Niccol said savings from job cuts will be invested back into stores, including adding customer service employees, new coffeehouse designs, and innovations. Corporate employees at Starbucks must now work in the office four days a week starting Sept. 30, as part of cost management and company restructuring. CarMax Q2 earnings miss, shares dropped 12% premarket after reporting $0.64 EPS versus $1.03 expected and revenue of $6.59B vs $7.05B estimates; CEO Bill Nash called Q2 “challenging”, as per the report by Yahoo Finance.

White House plans permanent job cuts

The White House instructed federal agencies to plan permanent job cuts if a government shutdown happens next week, targeting programs without legally required funding. OMB Director Russ Vought said agencies must identify programs where funding lapses on Oct. 1, and draft plans to permanently cut jobs if Congress does not approve spending, as per the report by Politico.

This is different from past shutdowns when workers were only temporarily sent home and came back once money was available. President Trump canceled a meeting with Democrats about healthcare subsidies, making a shutdown more likely and causing market uncertainty.

Trump targets TikTok deal amid market buzz

President Trump plans to sign an agreement to separate TikTok’s US operations from China-based ByteDance. The deal will depend on China’s approval, closing a deal worth tens of billions, and addressing technical and congressional hurdles, as reported by Yahoo Finance.

Experts say it is unclear how smoothly the TikTok spin-off will happen because of technical and political challenges, and China must give final approval. Intel shares rose over 3% in premarket trading after Bloomberg reported that Intel is in talks with Apple for an investment, continuing gains from the prior day, as stated by Bloomberg report.

Some analysts say the stock market may be in a new normal where prices are very high, reflecting investor excitement but also risk, similar to past periods like the dot-com era. Despite concerns about frothy stock prices and overconfidence, many investors remain bullish, creating tension between risk warnings and ongoing market optimism, as per the report by Yahoo Finance.

FAQs

Q1. Why did US stocks fall on September 25, 2025?

US stocks fell because jobless claims dropped unexpectedly, raising uncertainty about Federal Reserve interest rate cuts.

Q2. What companies reported news affecting the US stock market recently?

Starbucks announced 900 job cuts and store closures, CarMax missed Q2 earnings, and Intel gained after talks with Apple, impacting stock prices.