05:09 PM EDT, 10/16/2025 (MT Newswires) -- US equities fell Thursday as concerns about some bad loans weighed on regional bank stocks, adding to unease on Wall Street as trade tensions between Washington and China dragged on.

The Dow Jones Industrial Average ended 0.7% lower at 45,952.2, while the S&P 500 lost 0.6% to 6,629.1. The Nasdaq Composite dropped 0.5% to 22,562.5. Barring technology, all sectors were in the red, led by financials' 2.8% fall.

Zions Bancorporation (ZION) shares tumbled 13% after the bank disclosed a $50 million charge-off, which will be reflected in its third-quarter results. The charge stems from a review that uncovered "apparent misrepresentations and contractual defaults" regarding two commercial and industrial loans, according to a regulatory filing from Wednesday.

Western Alliance Bancorp ( WAL ) said Thursday it initiated a lawsuit against Cantor Group V in August for alleged fraud related to a note finance revolving credit facility. The stock slumped nearly 11%.

The broader regional banking index closed down.

Jefferies Financial Group ( JEF ) fell about 11%. The company said Sunday it will be able to absorb any losses or expenses related to its indirect exposure to auto-parts maker First Brands Group, which recently filed for bankruptcy.

J.B. Hunt Transport Services (JBHT) was the best performer on the S&P 500, up 22%. The transportation and logistics company late Wednesday logged an unexpected year-over-year increase in its third-quarter earnings, while revenue came in above market estimates.

On the trade front, China's recent decision to expand its rare earths export controls is a legitimate move and is meant to prevent rare earths' illegal outflow and misuse, the Global Times reported Thursday, citing Chinese Ministry of Commerce spokesperson He Yongqian.

The spokesperson reportedly accused the US of "deliberately creating unnecessary misunderstanding and panic" around the move and added that China had informed Washington and other countries about the decision before making the announcement.

He Yongqian indicated that China was open to trade negotiations with the US, the Global Times reported.

When asked by a reporter on Wednesday whether the US and China are heading for a prolonged trade war if they can't reach a deal, President Donald Trump replied, "Well, you're in one now," according to Bloomberg News.

US Treasury yields were lower, with the two-year rate losing 8.6 basis points to 3.42% and the 10-year rate falling 5.6 basis points to 3.98%.

The Federal Reserve should cut interest rates by 25 basis points later this month, Governor Christopher Waller said Thursday, while his colleague, Stephen Miran, pushed for a more aggressive easing stance.

Macro data are giving "conflicting" signals, with economic activity seeing solid growth and labor marking softening, Waller said in remarks prepared for a speech in New York.

"Something's gotta give -- either economic growth softens to match a soft labor market, or the labor market rebounds to match stronger economic growth," he said. "Since we don't know which way the data will break on this conflict, we need to move with care when adjusting the policy rate to ensure we don't make a mistake that will be costly to correct."

Separately, recently appointed Fed governor Miran told Fox Business that he would favor a half-percentage-point rate cut at the October meeting, though he said the Federal Open Market Committee will likely vote for another 25-basis-point cut.

"Amid a government shutdown and a lack of updated data, Fed officials are unable to draw much of a conclusion about much of anything and therefore should arguably remain on hold, waiting for additional information before potentially further compounding a policy error with a second-round rate cut if unwarranted by the evolution of inflation and hiring conditions," Stifel Chief Economist Lindsey Piegza said Thursday.

West Texas Intermediate crude oil was down 1.2% at $57.55 a barrel in Thursday late-afternoon trade.

US President Donald Trump claimed Wednesday that Indian Prime Minister Narendra Modi had assured him that New Delhi would halt oil purchases from Russia. However, an Indian government spokesman said Thursday he was "not aware of any conversation between the two leaders" that took place on Wednesday, BBC News reported.

In economic news, US homebuilder confidence rose more than expected this month to the highest level since April, despite persistent macroeconomic uncertainty, according to National Association of Home Builders and Wells Fargo data.

"While recent declines for mortgage rates are an encouraging sign for affordability conditions, the market remains challenging," NAHB Chairman Buddy Hughes said.

A US federal government shutdown that has entered its third week delayed a range of economic reports Thursday, including on jobless claims and producer prices.

The Senate was once again unable to advance Republicans' stopgap funding bill, CNN reported Thursday. The split in the chamber appears to be increasing over demands tied to health care, according to the report.

Gold was up 2.8% at $4,317.20 per troy ounce, while silver gained 3.5% to $53.17 per ounce.