At the opening bell, the Dow Jones Industrial Average fell more than 450 points, while the S&P 500 declined around 1%. The Nasdaq Composite dropped nearly 2%, pressured by losses in large-cap technology stocks.
Alphabet, Tesla earnings weigh on technology stocks
Technology shares led the market decline after investors reacted to quarterly earnings from Alphabet and Tesla.
Tesla slumped more than 10% after reporting a sharp earnings miss for the second quarter, with operating expenses growing faster than revenue. Alphabet also traded lower as investors focused on the company’s elevated artificial intelligence-related capital expenditure, reviving concerns over aggressive spending by Big Tech firms.
Oil tops $100 as West Asia tensions escalate
Crude oil prices surged after Yemen’s Iran-backed Houthi militants claimed attacks on two Saudi oil tankers in the Red Sea, raising fears of further disruptions to global energy supplies.
Investor concerns intensified after US President Donald Trump threatened additional strikes on Iranian infrastructure if Tehran targets vessels passing through the Strait of Hormuz.
Reflecting the heightened geopolitical risks, Brent crude futures jumped more than 6% to trade above $100 per barrel for the first time since late May, while West Texas Intermediate (WTI) crude rose above $91 per barrel.
Risk-off sentiment returns to Wall Street
The combination of soaring energy prices, escalating geopolitical tensions and renewed concerns over AI-related spending by technology companies prompted investors to reduce exposure to risk assets.
The sell-off marked a cautious start to Thursday’s session, with markets closely watching developments in West Asia and assessing whether higher oil prices and increased capital spending by major technology companies could weigh on corporate earnings and the broader economic outlook.
