Tech Stocks Lead the Decline
Wall Street fell sharply on Thursday after Alphabet, Google’s parent company, dropped more than 4%, pulling major indexes lower. The S&P 500 fell 1.2%, the Dow Jones lost 606 points, and the Nasdaq dropped 1.5%, marking one of the steepest daily declines in recent weeks.
Alphabet’s fall came despite reporting stronger quarterly profits than expected. Investors were unsettled by the company’s plan to nearly double spending on equipment and investments to $180 billion (€152bn) this year, far surpassing analyst expectations of $119 billion (€100.5bn).
Labor Market Weakness Adds Pressure
The sell-off was compounded by concerning US job market data. Unemployment claims rose more than economists anticipated, while employers announced 108,435 planned layoffs in January — the highest for the month since 2009. Additionally, job postings in December fell to their lowest level in over five years.
Treasury yields dropped in response, with the 10-year yield falling to 4.21%. Economists warn that continued weakness in the labor market could push the Federal Reserve to lower interest rates to support growth, though such a move could add inflationary pressure.
Commodities, Crypto, and Global Markets React
The turbulence extended to commodities and digital assets. Silver fell 13.3%, gold dropped 2.3% to $4,838.80 (€4,087.50) per ounce, and Bitcoin slid below $68,000 (€57,432) from a peak above $124,000 (€104,730) in October. Crypto-related stocks, including Coinbase and Strategy, also fell sharply.
Some companies bucked the trend: Broadcom rose 3.7% on AI-related demand, and healthcare giant McKesson jumped 16.8% after exceeding profit expectations. Meanwhile, European and Asian markets also struggled, with London’s FTSE 100 down 0.9%, Germany’s DAX down 0.9%, and South Korea’s Kospi tumbling 3.9%, led by a 6% drop in Samsung Electronics.
