Tech Sell-Off Weighs on Indexes
Wall Street fell sharply on Thursday after Alphabet, Google’s parent company, dropped more than 4%, dragging major indexes lower. The S&P 500 fell 1.2%, marking its sixth decline in seven sessions, while the Dow Jones lost 606 points and the Nasdaq slipped 1.5%.
Despite reporting stronger quarterly profits than analysts anticipated, Alphabet’s warning that its spending on equipment and other investments could double to roughly $180 billion this year unsettled investors. The unexpected surge in projected spending exceeded forecasts of $119 billion, raising concerns about broader tech sector costs.
Job Market Woes Hit Bonds
The stock market slide was compounded by signs of weakness in the US labor market. Weekly unemployment claims rose more than expected, and employers announced 108,435 planned layoffs in January — the highest monthly total since October and the worst January figure since 2009. Job postings also fell to a five-year low in December.
Treasury yields reacted sharply, with the 10-year yield dropping to 4.21%. Economists warn that persistent labor market weakness could push the Federal Reserve toward interest rate cuts to support the economy, even as inflation pressures continue.
Commodities and Crypto Experience Volatility
Commodities and digital assets also felt the impact. Silver plunged 13.3% in a wild swing, and gold fell 2.3% to $4,838.80 per ounce after months of dramatic price movements. Bitcoin dropped below $68,000 from its October high of over $124,000, pulling down stocks of crypto-linked companies like Coinbase and Strategy.
Some stocks managed gains amid the turbulence. Chipmaker Broadcom rose 3.7%, and healthcare firm McKesson jumped 16.8% after strong earnings reports. Overseas, European and Asian markets also struggled: London’s FTSE 100 fell 0.9%, Germany’s DAX lost 0.9%, and South Korea’s Kospi tumbled 3.9%, with Samsung Electronics sliding 6% after a recent surge.
