Wall Street Falls on Alphabet Drop and Job Worries/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks declined Thursday as Alphabet shares dropped sharply and job market data disappointed. Investors reacted to concerns about rising layoffs and high AI-related spending. Commodities like silver, gold, and bitcoin also fell, while bond yields retreated.
Alphabet Spending and Job Market Worries Drag Wall Street Lower: Quick Look
- Alphabet stock fell 4.5% despite strong earnings
- Company plans to double AI-related capital spending in 2026
- Jobless claims and layoff announcements rose significantly
- S&P 500, Nasdaq, and Dow all posted losses
- Silver plunged nearly 10%, gold and bitcoin also dropped
- Qualcomm and Estee Lauder declined despite beating forecasts
- Broadcom and McKesson posted gains
- Global stock markets also moved lower
Deep Look: Alphabet’s AI Bet and Labor Market Weakness Rattle Markets
U.S. markets fell Thursday as investor anxiety mounted over high spending in the tech sector and signs of softening in the labor market. Alphabet led the downturn, while declines spread to commodities and overseas markets.
The S&P 500 lost 1.1%, on track for its sixth drop in seven sessions after recently hitting a record high. The Nasdaq declined 1.5%, and the Dow Jones Industrial Average dropped 425 points, or 0.9%.
Alphabet Under Pressure Despite Earnings Beat
Alphabet, the parent of Google and YouTube, posted better-than-expected quarterly earnings. However, shares sank 4.5% after executives revealed plans to double capital expenditures to $180 billion in 2026, largely for artificial intelligence infrastructure. The figure far exceeded analysts’ projections of $119 billion, prompting questions about the long-term return on such investments.
Job Market Signals Raise Concerns
Multiple data releases raised fresh concerns about the strength of the U.S. labor market:
- Weekly jobless claims rose by 22,000 to 231,000, above economist forecasts
- January saw 108,435 layoffs, the highest monthly total since October and worst January since 2009
- Job openings declined in December, continuing a downward trend
While some economists cautioned that the jobless claims spike could be temporary, others pointed to a broader slowdown in hiring. These developments fueled speculation that the Federal Reserve could consider cutting interest rates sooner to prevent further economic weakening.
Treasury yields declined in response, with the 10-year yield dropping from 4.29% to 4.23%.
Commodity Prices See Sharp Declines
The downturn wasn’t limited to equities. Commodities saw significant losses:
- Silver fell 9.8%, one of its steepest recent drops
- Gold declined 1.5% to $4,874.20 per ounce after nearing $5,600 last week
- Bitcoin slipped below $69,000, well off its October record of over $124,000
Investors had been flocking to these assets amid concerns over market volatility, inflation, and global debt. But analysts had warned of an unsustainable rally.
Technology and Consumer Stocks React Differently
In tech, Qualcomm shares dropped 8.9%. Despite beating earnings expectations, the company issued weaker forward guidance, citing memory chip shortages affecting handset demand.
Estee Lauder stock plunged 19.9%. The cosmetics giant exceeded quarterly estimates and raised its full-year guidance, but warned that tariffs would wipe out $100 million in profits.
In contrast, some companies benefiting from the AI investment trend bucked the market slide. Broadcom gained 2.2%, likely viewed as a key AI chip supplier. McKesson surged 16.3% after reporting strong earnings and raising its profit outlook.
International Markets Follow Suit
Market losses were mirrored across global exchanges:
- London’s FTSE 100 fell 0.5% following a decision to keep interest rates unchanged
- France’s CAC 40 and Germany’s DAX dropped 0.5% and 0.7% respectively
- South Korea’s Kospi plummeted 3.9%, with Samsung Electronics losing 6% after recent gains
Global investors are increasingly concerned about mixed economic signals, central bank policies, and volatility in tech valuations.
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