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Stock Market Today: Dow slumps as rising Treasury yields rattle markets -- The Dow slumped Thursday, pressured by rising Treasury yields as investors continued to digest the prospect of a higher-for-longer Federal Reserve interest rate regime following data showing the labor market remains tight.

The Dow Jones Industrial Average fell 1.1%, 370 points, Nasdaq fell 1.8%, and the S&P 500 fell 1.6%,

Fresh signs of tight labor market push Treasury yields higher

Treasury yields continued to advance after fewer than expected weekly initial jobless claims flagged ongoing strength in the labor market and the potential for a pick up inflation.

Initial jobless claims fell to 201,000 in the week ended Sept. 16 from 221,000 in the prior week, marking lowest level of claims since January.

A still-strong labor market added to fears that the Fed may have to do more to quell inflation - just a day after the Fed delivered a "hawkish pause" - sending the 10-year yield to highest level since 2006.

Big tech continues as rising Treasury yields bring pain, again

Big tech added to losses from a day earlier as ongoing climb in Treasury yields on expectations for the Fed to keep rates higher for longer continued to weigh.

“I would argue that the recent tech rally has been driven by the idea of the Fed not being as hawkish as they have stated, but with Fed Chairman Jerome Powell doubling down [on Wednesday] to give the Fed more room, and taking two rate cuts next year off the table, these are all in the same vein to put pressure on the sector,”Johan Grahn, Head of ETF Strategy at Allianz (ETR:ALVG) told's Yasin Ebrahim an interview on Thursday.

“I would be cautious today on the tech sector,” Grahn added. Inc (NASDAQ:AMZN), down more than 4%, led the decline, following by Alphabet Inc Class A (NASDAQ:GOOGL) and Meta Platforms Inc (NASDAQ:META).

Broadcom slip fuels dip in chip stocks

As well as rising yields, a Broadcom (NASDAQ:AVGO)-led decline in semiconductor stocks also pressured tech as Alphabet (NASDAQ:GOOGL)'s Google is reportedly mulling whether to ditch Broadcom as its artificial intelligence chip supplier for its own in-house chips by 2027.

Broadcom price hikes for its AI chips are believed to have sparked the internal discussions at Google, The Information reported. Google said in a statement that it was still "productively engaged" with Broadcom for the long term.

"We are productively engaged with Broadcom and multiple other suppliers for the long term. Our work to meet our internal and external Cloud needs benefit from our collaboration with Broadcom; they have been an excellent partner and we see no change in our engagement," a Google spokesperson said in an emailed statement to on Thursday.

Complaints around Broadcom pricing are “certainly not new,” according to Wedbush, but the chipmaker has been able to retain customers “even after purported rifts (AAPL being one example of this dynamic).”

Cisco in $28 billion deal to acquire Splunk

Cisco Systems Inc (NASDAQ:CSCO) fell nearly 4% as investors weren’t impress by the company’s $28 billion deal to acquire cybersecurity software company Splunk Inc (NASDAQ:SPLK).

The deal is expected to help Cisco diversify its revenue stream at a time when its core business of selling networking equipment is facing challenges from ongoing demand for cloud-native offerings.

Potential scrutiny of the deal from regulators, and the price of the deal – the largest in Cisco’s history, topping the $6.9 billion to cable television and telecom equipment maker Scientific Atlanta in 2006 – has led some to question the value of the acquisition.

FedEx shines as investors cheer earnings beat, margin improvement

FedEx (NYSE:FDX) ended the day up more than 4% as its mixed first-quarter report was overlooked after analysts cheered the company’s better-than-expected Q1 earnings and progress on its cost-cutting efforts that are expected to lead to a continued improvement in margins.

“In our view, the upside 1Q EPS provides more visibility to FDX's cost reduction and margin improvement story and we continue to believe upside potential is attractive,” UBS said in a note.

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