US stock markets experienced a significant downturn on Thursday, with benchmark indices sliding lower as weakness in technology stocks, spearheaded by Alphabet, triggered a widespread selloff. Simultaneously, bitcoin and precious metals recorded sharp losses, amplifying the bearish sentiment across financial markets.
Major Indices and Technology Sector Under Pressure
The S&P 500 fell by 0.8%, heading toward its sixth loss in the seven days since reaching an all-time high. The Dow Jones Industrial Average declined by 326 points, or 0.7%, as of 9:35 a.m. Eastern time, while the Nasdaq composite dropped 0.8%, reflecting the tech-heavy index's vulnerability.
Alphabet, the parent company of Google, fell 5.4% despite reporting stronger-than-expected profit for the latest quarter. Investors instead focused on its aggressive artificial intelligence spending plans, which could see investments double this year to approximately $180 billion, far exceeding analysts' expectations of less than $119 billion, according to FactSet.
Labor Market Data Sparks Recession Concerns
In the bond market, Treasury yields fell after labor market data pointed to rising economic stress. A report showed that US unemployment benefit applications increased more than economists had anticipated last week, signaling a potential acceleration in layoffs. Another report revealed that layoffs announced by US-based employers surged to 108,435 last month, the highest monthly level since October and the worst January since 2009, according to Challenger, Gray & Christmas.
This weaker labor outlook raised expectations that the Federal Reserve may cut interest rates to support the economy, even at the risk of worsening inflation. Consequently, the yield on the 10-year Treasury fell to 4.23% from 4.29% late Wednesday.
Commodities and Cryptocurrency See Sharp Declines
Commodities markets witnessed sharper swings, with silver tumbling 12.1% amid continued volatility after last week's record-breaking rally stalled. Gold fell 1.9% to $4,855 per ounce after experiencing sharp fluctuations in recent sessions. The metal had neared $5,600 last week before dropping below $4,500 earlier this week.
Both gold and silver had surged earlier as investors sought safe-haven assets amid concerns over political instability, expensive equity valuations, and high global debt levels. However, analysts had warned that such extreme rallies could trigger corrections, which materialized on Thursday.
Bitcoin, often referred to as "digital gold," also fell, briefly slipping below $70,000. This marks a significant drop from its record above $124,000 in October, highlighting the volatility in the cryptocurrency market.
Individual Stock Movements and Global Impact
Among individual stocks, Qualcomm dropped 9.1% despite reporting better-than-expected profit and revenue. The company issued a weaker profit forecast due to an industrywide memory shortage affecting handset demand.
Outside the technology sector, Estee Lauder fell 16.9% despite beating earnings estimates, after warning that tariff-related pressures could reduce profit by about $100 million in its fiscal year.
Globally, stock markets were also weak. London's FTSE 100 fell 0.9% after the Bank of England kept interest rates unchanged. France's CAC 40 declined 0.6%, while Germany's DAX lost 1.1% after the European Central Bank also held rates steady.
In Asia, South Korea's Kospi fell 3.9%, dropping from its record high. Samsung Electronics declined 6%, two days after surging 11.4%, indicating regional market volatility.
