STORY: U.S. stocks closed lower on Thursday as strong weekly jobless claims and comments from a U.S. Federal Reserve official - who said the central bank was "going to keep raising rates for a while" - bolstered concerns about the Fed potentially tilting the economy into a recession in its effort to fight inflation.

The Dow fell point-three percent, the S&P 500 dropped point-eight percent, and the Nasdaq lost point-six percent.

Paul Kim is co-founder and CEO of Simplify ETFs.

"The Fed is what drives the liquidity in the market, and that's all that matters. Fundamentals and sentiment are already horrendous. The only thing that really will drive markets in the medium term is where the Fed hikes to, and when they finally pause and pivot. And they want three things, right, they want lower CPI, higher unemployment and tighter financial conditions. We're not seeing the first two. CPI is not lower unemployment.

"You have a lot of anecdotes on hiring freezes and things like that, but you're not seeing any pressure coming out of the market or inflation from that side. All we are seeing are tighter financial conditions, primarily things like interest rates and mortgage rates and then slowly things like equity pricing and valuation. So that's what you're seeing. But there's a lot more pain to come unless the Fed eases off."

That pain is already evident in the housing market. A report out Thursday showed existing home sales for September fell for the 8th straight month. Year-over-year, they're down 24%.

Stocks initially rose early in Thursday’s session, boosted by a flurry of solid corporate earnings.

Shares of IBM gained after the IT services company beat quarterly earnings estimates and said it expects to exceed full-year revenue growth targets.

Shares of AT&T surged after posting upbeat third-quarter results and lifted its annual profit forecast, thanks to Americans opting for pricier wireless plans.

But shares of Tesla slumped after the electric-car company flagged persistent logistics challenges, and said it expected to miss its vehicle delivery target this year.