NEW YORK - US stocks fell on Thursday, extending losses for a third straight session as investors weighed stronger-than-expected economic data against uncertainty over Federal Reserve policy.
The Dow Jones Industrial Average dropped 173.96 points, or 0.38 percent, to 45,947.32. The S&P 500 lost 33.25 points, or 0.5 percent, to 6,604.72. The Nasdaq Composite Index declined 113.16 points, or 0.5 percent, to 22,384.7.
Nine of the 11 primary S&P 500 sectors ended lower, with health care and consumer discretionary leading the laggards by falling 1.67 percent and 1.47 percent, respectively. Energy and technology outperformed, rising 0.87 percent and 0.03 percent.
Economic data showed initial jobless claims in the United States fell to 218,000 last week, down from 232,000 the prior week, signaling resilience in the labor market. Meanwhile, US second-quarter GDP was revised sharply higher to an annualized pace of 3.8 percent, compared with a 0.6 percent contraction in the first quarter and market expectations of 3.3 percent.
The strong readings reduce the likelihood of further rate cuts this year, with Fed officials divided on the policy outlook after the Fed's rate cut earlier this month.
UBS now expects the S&P 500 will reach 6,800 by June 2026 in its base case, while possibly hitting 7,500 in its bull case, as lower interest rates and the strength of artificial intelligence continue to power stocks.
"Any doubt over the Fed's future easing path could stoke volatility," Ulrike Hoffmann-Burchardi from UBS wrote on Thursday. "But we continue to believe that positive market fundamentals will likely drive equities higher in the coming months."
Meanwhile, in corporate moves, shares of Oracle and Tesla both extended losses, with Tesla sliding over 4 percent. Costco is set to report quarterly results after the bell, with analysts anticipating solid sales growth as value-conscious consumers hunt for bargains.
Investors now await Friday's release of the personal consumption expenditures price index, the Fed's preferred inflation gauge, for further clues on the interest rate path.
