Tech Weighs Heavily on Wall Street
Wall Street moved sharply lower on Thursday after Alphabet shares dropped more than 4%, pulling major indexes into the red and unsettling markets beyond equities. The S&P 500 fell 1.2%, marking its sixth loss in seven sessions since reaching a record high. The Dow Jones Industrial Average slid 606 points, while the Nasdaq Composite dropped 1.5%.
Alphabet was the biggest drag despite posting quarterly profits that beat expectations. Investors focused instead on the company’s warning that capital spending could nearly double this year to about $180 billion (€152bn), far exceeding analyst forecasts. The surprise spending outlook overshadowed strong earnings and weighed on broader tech sentiment.
Job Market Signals Add to Unease
Pressure also built in bond markets as Treasury yields fell following fresh signs of strain in the US labour market. Weekly unemployment claims rose more than expected, raising concerns that layoffs may be accelerating. While some economists cautioned the increase could be statistical noise, other data pointed to a more troubling trend.
US employers announced more than 108,000 planned job cuts last month, the highest January total since 2009, according to Challenger, Gray & Christmas. Separately, government figures showed job openings fell in December to their lowest level in over five years. The weakening data fuelled expectations that the Federal Reserve could cut interest rates to support growth, pushing the 10-year Treasury yield down to 4.21%.
Commodities and Crypto Reverse Course
The market turbulence spilled into commodities and digital assets, where prices swung sharply lower. Silver plunged 13.3%, extending its recent volatility, while gold dropped 2.3% to $4,838.80 (€4,087.50) per ounce after weeks of dramatic gains. Bitcoin also slid, falling below $68,000 (€57,432) after reaching a record above $124,000 (€104,730) in October.
The declines hit crypto-related stocks hard, with Coinbase falling 8.3% and Strategy tumbling nearly 12%. Elsewhere, Qualcomm sank 7.2% on a weaker-than-expected outlook despite strong earnings, while Estée Lauder plunged 21.2% after warning that tariffs could erase about $100 million (€84.5mn) in profits.
Not all sectors suffered. Broadcom rose 3.7% on optimism around sustained AI investment, while McKesson surged 16.8% after delivering better-than-expected results and raising its full-year profit forecast. Overseas markets also retreated, with losses across Europe and Asia, including a sharp pullback in South Korea’s Kospi after it slipped from a record high.
