Stocks fell Thursday as market participants weighed concerns over higher-for-longer interest rates and the potential for a U.S. government shutdown. The Dow Jones Industrial Average dropped more than 370 points, while the S&P 500 Index and Nasdaq Composite lost about 1.6% and 1.8%, respectively.

Here's how the market settled on Thursday:

S&P 500 Index (SPY  ): -1.64% or -72.20 points to 4,330.00

Dow Jones Industrial Average (DIA  ): -1.08% or -370.46 points to 34,070.42

Nasdaq Composite Index (QQQ  ): -1.82% or -245.14 points to 13,223.99

Thursday's moves come as House Republicans entered a recess on Thursday, raising fears that the U.S. government may fail to pass a spending bill to fund Congress in the coming days. Wall Street is concerned that a government shutdown may impact fourth-quarter GDP. Traders are also continuing to digest the Fed's latest monetary policy decision, which left rates unchanged for now, but signaled that another rate hike is coming in 2023 and interest rates are expected to remain higher for longer than previously expected in 2024.

In economic news, initial jobless claims fell to their lowest level since late January last week, offering another sign that the labor market is remaining resilient amid high interest rates and inflationary pressures. First-time unemployment filings for the week ended Sept. 16 totaled a seasonally adjusted 201,000, the Labor Department reported Thursday, totaling 20,000 less than the prior week's print. Continuing claims also fell by 21,000 to a total of 1.662 million, which was also below expectations.

On the earnings front, FedEx (FDX  ) shares rose after the shipping giant reported strong fiscal first quarter results. The company said it was successful at cutting costs last quarter and gaining customers from rivals like UPS (UPS  ) -- FedEx said its Ground unit picked up about 400,000 more packages per day after UPS customs shifted to alternative carriers ahead of the Aug. 1 contract expiration for unionized workers.

Darden Restaurants (DRI  ) reported fine-dining sales fell more-than-expected in its first quarter. However, its earnings and revenue results topped analysts' expectations. "Overall, we think the consumer continues to be resilient, but they seem to be a little bit more selective," said CEO Rick Cardenas on a conference call with analysts on Thursday.

Elsewhere, Broadcom (AVGO  ) shares fell Thursday after The Information reported that Google (GOOGL  ) was in talks to end its partnership with the chipmaker by 2027 in favor of designing its own AI chips. The report, which cited a person familiar with the matter, also said Google has been shifting to replace interface networking chips from Broadcom with semiconductors produced by Marvell Technology (MRVL  ).

Shares of Cisco Systems (CSCO  ) fell after the company announced Thursday it is acquiring cybersecurity software company Splunk (SPLK  ) in a cash deal worth about $28 billion.

"Our combined capabilities will drive the next generation of AI-enabled security and observability," said Cisco CEO Chuck Robbins in a statement. "From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient."

Fox (FOXA  ) and News Corp (NWSA  ) shares rose on news Thursday that Rupert Murdoch is stepping down from his position as chairman of both media companies. Murdoch's son Lachlan Murdoch will become sole Chair of News Corp. and will continue as CEO and Executive Chair of Fox Corp.

"Our companies are in robust health, as am I," Rupert Murdoch said in a note to employees, quoted by CNBC. "We have every reason to be optimistic about the coming years - I certainly am, and plan to be here to participate in them. But the battle for the freedom of speech and, ultimately, the freedom of thought, has never been more intense."

For Friday, market participants will react to Fedspeak and preliminary services and manufacturing PMI readings for September as Wall Street heads towards a losing week.