MARKET SNAPSHOT

U.S. stocks fell for a third straight day following Monday's record close. Treasury yields rose in the wake of stronger-than-expected U.S. indicators and ahead of August PCE inflation. Oil prices were mixed as oil markets continued to weigh oversupply concerns against attacks on Russian energy assets. Gold prices eked out a gain, despite the dollar strengthening.

MARKET WRAPS

EQUITIES

The major U.S. stock indexes dropped for a third-straight session after a fresh batch of government data and corporate news offered mixed signals on the outlook for the economy.

Despite weak hiring that has led the Federal Reserve to slash interest rates, there are few signs of recession. The final estimate of second-quarter GDP growth came in stronger than expected, at 3.8%, compared with a prior estimate of 3.3%. Weekly jobless claims showed a drop in the number of Americans who newly filed for unemployment benefits. And monthly durable goods orders bounced back, driven by a surge in aircraft orders.

Outside of AI, the auto industry is flashing some warning lights on the real economy. Carmakers' profits have been getting squeezed by tariffs, a subprime auto lender recently collapsed, and some car retailers are warning that consumers are pulling back.

"Every day in the market feels like a bit of a tug of war," said Justin Bergner, portfolio manager at Gabelli Funds. "On one side, there's positive data around AI, while on the other, concerns about inflation and jobs."

The S&P 500 and Nasdaq both dropped 0.5%. The Dow Jones Industrial Average declined 0.4%.

On Friday, traders will get the latest look at the personal-consumption expenditures price index, the Fed's preferred gauge of inflation. Economists expect the reading to come in at around 2.9% year-over-year, above the central bank's inflation target. Any upside surprise is likely to disappoint investors, who are betting the Fed will keep easing monetary policy with interest rate cuts.

Earlier Thursday, Chinese stocks saw a mixed performance, with the Shanghai Composite Index remaining flat and the Shenzhen Composite Index posting a 0.15% gain. The ChiNext Price Index rose 1.6%. In Hong Kong, the Hang Seng Index closed 0.1% lower.

Japan's Nikkei Stock Average added 0.3%, amid strength in metal stocks.

Stocks in Australia rose, as the S&P/ASX 200 increased 0.1%.

New Zealand's S&P/NZX 50 edged lower, with stocks slipping 0.2%.

COMMODITIES

Crude futures recovered early losses and ended the session mixed with continued concerns over Russian supplies keeping sellers cautious.

"There's no doubt that right now that the Russian hits on their oil infrastructure by Ukraine means that that really is Ground Zero," Phil Flynn of the Price Futures Group said.

With Europe planning tougher sanctions on Russian oil and gas, it "could create a situation where we could start to see significant change in market psychology and a potential breakout to the upside."

West Texas Intermediate slipped 1 cent to $64.98 a barrel, and Brent settled up 0.2% at $69.42.

Gold futures settled slightly higher on strong physical metal flow.

Gold ETFs have seen inflows totaling $10.5 billion in September, said Citi Research. Year-to-date, the flow to ETFs is roughly $50 billion.

"ETF has outshined all other gold demand sectors this year and is the single most important contributor to the gold price rally in our view," said Kenny Hu of Citi Research.

Front-month gold futures gained 0.1% to $3,736.90 a troy ounce, for the third-highest finish on record and the fourth positive session in the past five.

TODAY'S TOP HEADLINES

Economy Had a Strong Spring, Latest Revision Shows

The latest government economic revision shows the U.S. economy was growing at a much stronger clip this spring than previously realized, powered by consumer spending.

Business investment in software and the equipment powering artificial intelligence also helped. Spending on intellectual property like research and development and software rose at a revised 15% annual rate, the most since 1999, which economists touted as a positive sign for future productivity growth.

Americans spent more than initially estimated in the second quarter on services such as restaurants, health care, insurance and transportation. Services spending drives the lion's share of U.S. economic output.

Durable-Goods Orders Bounce Back on Surge in Aircraft Demand

Demand for U.S. durable goods recovered after two months of declines, driven by a surge in orders for military and civilian aircraft.

Total orders for durable goods-which include transportation equipment as well as goods like computers and metal products-rose 2.9% on month in August, having fallen back over the previous two months, data from the Commerce Department showed Thursday.

Military aircraft and parts saw a massive 50% surge in orders, while orders for nondefense aircraft also increased sharply. Stripping out these areas and other transportation equipment, orders were up just 0.4% on month, the figures showed.

U.S. Jobless Claims Fell Last Week

The number of Americans who newly filed for unemployment benefits dropped last week, the Labor Department said Thursday, a reassuring sign amid growing unease about the job market.

In the week through Sept. 20, jobless claims filings declined to 218,000 from 232,000 the week before. Economists polled by The Wall Street Journal were forecasting 235,000 claims.

Continuing claims, a gauge of the size of the total unemployed population, came in at 1.93 million in the week through Sept. 13, down slightly from a week earlier. The continuing-claims data lag the initial-claims data by a week.

Costco Sales Rise but Same-Store Growth Misses Estimates

Costco Wholesale had higher sales and profit in the fiscal fourth quarter, though its same-store sales growth missed Wall Street estimates.

The wholesale retailer on Thursday posted a profit of $2.61 billion, or $5.87 a share, in the fiscal fourth quarter, compared with $2.35 billion, or $5.29 a share, a year earlier.

Revenue rose 8% to $86.16 billion. Analysts surveyed by FactSet forecast revenue of $86.01 billion.

Amazon Reaches $2.5 Billion Settlement Over Allegations It Misled Prime Users

Amazon has reached a $2.5 billion settlement with the Federal Trade Commission, just days into a civil trial examining whether the company duped customers into signing up for its signature Prime service and created a confusing process to cancel.

The e-commerce giant will pay a $1 billion civil penalty, the largest in FTC history, and create a $1.5 billion fund to pay back to consumers, according to court documents. It will also be required on its Prime interface to include a simple way to cancel.

Amazon agreed to settle the case without admitting or denying the FTC's allegations that it misled customers in violation of federal consumer protection laws. The company said Thursday that the resolution allows it to move forward and focus on its business.