In Thursday's trading, Macy's M.N fell 4.7%. The struggling department-store operator raised its annual forecasts, but not by enough to impress investors.
American Eagle Outfitters AEO.N dropped 14% to its lowest since October as the apparel maker reiterated its annual comparable sales forecast amid choppy discretionary spending.
Declining stocks outnumbered rising ones within the S&P 500 .AD.SPX by a 2.0-to-one ratio.
The S&P 500 posted eight new highs and 28 new lows; the Nasdaq recorded 44 new highs and 215 new lows.
Major indexes and sector moves
The S&P 500 declined 0.58% to end the session at 7,591.75 points.
The Nasdaq declined 0.65% to 26,081.73 points, while the Dow Jones Industrial Average declined 0.60% to 52,064.10 points.
The S&P 500 has lost 2% in the past four sessions, its deepest four-day loss since June.
Nine of the 11 S&P 500 sector indexes declined, led lower by materials .SPLRCM, down 1.45%, followed by a 0.91% loss in information technology .SPLRCT.
Volume on U.S. exchanges was relatively heavy, with 15.1 billion shares traded, compared to an average of 14.9 billion shares over the previous 20 sessions.
Traders now see a 70% chance the Federal Reserve will raise interest rates by at least 25 basis points next week, up from about 64% before Thursday's report, the CME FedWatch tool showed.
Following recent declines, the S&P 500 is down nearly 3% from its record high close on August 13, and it remains up 11% in 2026.
The S&P 500's recent decline, coupled with a strong earnings outlook, has the benchmark trading at 19 times expected earnings, its cheapest since April 2025, when U.S. President Donald Trump's "Liberation Day" tariff announcements threw global markets into a tailspin.
Treasury yields hit multi-year highs
Yields on 10-year Treasury notes rose to their highest in nearly three years, while 30-year Treasury yields hit their highest in more than 19 years and 2-year Treasury yields reached their highest in more than two years.
"Yields are going up at the short end of the curve because the Fed is probably going to hike in the next couple months. Yields are going up at the long end of the curve because of debt and deficit issues, and sticky inflation," said Ross Mayfield, an investment strategy analyst at Baird in Louisville, Kentucky.
"Higher yields are a negative for the equity market. They lower valuations and they make it more expensive to operate a business, and more expensive for consumers to exist in the world."
Data on Thursday showed the U.S. producer price index (PPI) increased in line with expectations in August on a monthly basis amid a rebound in the cost of energy products. Investors will pay close attention to Friday's August consumer price data.
Stocks end lower as yields and inflation worries rise
U.S. stocks ended down on Thursday after producer price data for August and surging oil prices stoked worries the Federal Reserve will hike interest rates next week, while climbing Treasury yields made stocks less attractive.
Heavyweight chipmakers lost ground, with Nvidia NVDA.O down 2.3% and Micron Technology MU.O losing 4.7%, both weighing on the S&P 500. Apple AAPL.O rallied 3.6% a day after launching a $1,999 iPhone.
With supply routes through both the Strait of Hormuz and the Red Sea disrupted by the U.S.-Israeli war on Iran, Brent crude LCOc1 jumped 6% to $107 a barrel, adding to inflation worries and fueling expectations the Fed will raise interest rates at its policy meeting on Wednesday.
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