US stocks today: Nasdaq plunges 2% as tech earnings spark AI spending worries

Wall ​Street indexes closed lower on Thursday with Nasdaq sinking more than 2% as the latest earnings updates from large technology companies revived concerns about heavy AI spending, while soaring oil prices amped up inflation worries, lifting bond yields.Losses were broad-based after investors were unimpressed by second-quarter results from Alphabet and Tesla , the first of ‌the heavyweight "Magnificent Seven" companies ⁠to report ⁠results this season.Stocks also came under additional pressure as Brent crude oil futures settled above$100 a barrelfor the first time since May, and U.S. oil futures rose above $90.Middle ​East hostilities fanned worries about global oil supplies.

The U.S. military launched another round of air strikes on Iran, and Iran fired at neighboring ​Arab countries that house U.S. bases.

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President Donald Trump vowed "major military punishment" for Iran and Houthis, after the Yemeni fighters struck two Saudi oil tankers in the Red Sea.The resulting surge in oil prices prompted worries about inflation days before the next Federal Reserve policy ​meeting."Oil prices rising at this clip pose a meaningful macro and market risk," said Matt ⁠Miskin, co-chief investment ‌strategist at Manulife John Hancock Investments.

He added that low unemployment data would pressure the Fed to focus ​on fighting inflation.And he ​also pointed to the lack of enthusiasm, even for strong earnings reports as investors struggle to justify ⁠high valuations."The numbers in aggregate are great but many companies have had a story that's ​caused the stock to fall," said Miskin, pointing to worries about capital spending as one ​example.

"Any chink in the armor and the stocks are being sold off."According to preliminary data, the S&P 500 lost 92.62 points, or 1.24%, to end at 7,408.53 points, while the Nasdaq Composite lost 552.33 points, or 2.15%, to 25,138.57.

The Dow Jones Industrial Average fell 523.01 points, or 1.00%, to 51,695.57.The S&P 500's 11 major industry sectors were a mixed bag with strength in industrials where big gainers included Lockheed Martin.

Shares in the defense giant rallied after it lifted 2026 sales and profit forecasts.Shares of Google's parent, Alphabet, sank after ‌it reported higher spending plans while it also burned cash.The stock's fall dragged the communication services sector down.

Consumer discretionary was another big sector loser, with a hefty weight from Tesla, whose shares tumbled after it reported ​negative free cash flow ​in the second quarter for the ⁠first time in more than two years.Wall Street's fear gauge, the CBOE Volatility Index hit its highest level in nearly a month during the session.With oil prices rising, inflation worries pushed U.S.

10-year yields to their highest levels since early 2025.

However traders were still ​betting on a roughly 64% probability that the Fed would keep interest rates unchanged next week, according to CME Group's FedWatch tool.The volatile Philadelphia semiconductor index was down during the session with results due after the bell from chip giant Intel.

Shares in analog chip company Texas Instruments fell sharply despite forecasting quarterly revenue above estimates.However, shares in Thermo Fisher Scientific rallied after the medical equipment maker raised its annual profit forecast and beat estimates for second-quarter results. ...