All three Wall Street major indexes ended lower on Thursday and posted their worst quarters in at least 12 months, following a tumultuous month and period wracked by concerns over COVID-19, inflation fears and budget wrangling in Washington. The U.S. Senate and House approved a stopgap spending bill to keep the government running late in the session, but after a brief market uptick, stocks resumed their decline, dragging even the Nasdaq into the red after trending higher most of the day. “The market’s been resilient, but the risk tied up in the policy headlines over the debt ceiling, the chaos around these spending bills is weighing on the markets a bit as the quarter comes to a head,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “In a larger context it’s been pretty mild. We’re coming on the heels of seven ‘up’ months and volatility’s been fairly muted despite the headline risks, not to mention COVID-19 and tapering,” Mayfield added. “The market had to take a pause, and a pause is necessary and probably to be expected.” All three major U.S. stock indexes had their worst quarterly performance since the opening months of 2020, when the COVID-19 pandemic brought the global economy to its knees. The S&P and Nasdaq posted modest gains over the July-to-September period, while the Dow suffered a quarterly loss. For the month, all three indexes gave their worst quarterly performance in 12 months or more. The tug-of-war between growth and value persisted throughout the month and quarter. “It’s no surprise as we’ve seen yields tick higher you’ve seen the outperformance of value,” Mayfield said. “We expect yields to tick higher to the end of the year and cyclical and value performance to accompany that.” On the economic front, initial jobless claims unexpectedly edged higher for the third straight week. Market participants now look to consumer spending, inflation and factory activity data expected on Friday for signs of economic health and clues regarding the U.S. Federal Reserve’s shifting timeline for tapering its asset purchases and hiking key interest rates. Fed Chairman Jerome Powell, along with Treasury Secretary Janet Yellen, testified before the U.S. House Committee on Financial Services, even as wrangling continued on Capitol Hill over funding the government in the face of a looming deadline and the threat of potential shutdowns and credit default. Unofficially, the Dow Jones Industrial Average fell 556.48 points, or 1.62%, to 33,834.24, the S&P 500 lost 53.22 points, or 1.22%, to 4,306.24 and the Nasdaq Composite dropped 68.14 points, or 0.47%, to 14,444.30.