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Nasdaq drops 2.6% as Big Tech sells off and oil jumps above $100
Brent crude crossed $100 and WTI rose after Iran-backed Houthis said they attacked tankers in the Red Sea, a move that also pushed the 10-year Treasury to its highest level in a year and a half.
US stocks fell broadly on Thursday, with the Nasdaq Composite dropping 2.6% to break below 25,000 for the first time since May, as investors reacted to an updated AI spending outlook from Big Tech and prices for oil surged. The Dow Jones Industrial Average fell 1.1%, while the S&P 500 declined 1.4%, extending declines that began the prior day around earnings activity. Yahoo Finance reports that losses were led by Alphabet and Tesla after the two companies reported results following Wednesday’s close. While Alphabet posted a strong quarter on fundamentals, its raised capex outlook prompted concerns among investors about AI spending returns. Tesla Chief Executive Elon Musk also pointed to 2026 as a “massive capex year,” emphasizing investments tied to Optimus robots, robotaxis, and data centers. The market also reacted to a worsening Middle East situation, with oil climbing on what the report describes as expanded attacks. Brent crude futures crossed $100 before pulling back, and West Texas Intermediate rose after Iran-backed Houthis said they attacked tankers in the Red Sea, raising inflation worries and contributing to a bond sell-off. According to the report, the 10-year Treasury yield moved to its highest level in a year and a half, which further pushed back against expectations that the Federal Reserve would hike rates this year. On the data front, initial jobless claims unexpectedly fell to 187,000 for the week, the lowest since 1969, compared with 210,000 expected, and more earnings are scheduled ahead, including from Intel, T-Mobile US, and Lockheed Martin.
Latest closeWTI crude $87.52 ▲3.1%|Brent $94.43 ▲3.8%|S&P 500 7,509.20 ▲0.9%