Stocks fell as Big Tech earnings pressured growth: Thursday recap

Stocks fell on Thursday, with the damage concentrated in the market’s largest names. The S&P 500 lost 1.23% to close at 7,408.30, and the Nasdaq dropped 1.90% to 25,137.69. The Dow held up better, down 1.00% to 51,711.65. The selling was narrow. Below the index headlines, more than a third of the eleven S&P sectors finished higher.

That split defined the day. Industrials led with a 1.73% gain, and health care rose 1.26%. Utilities added 0.57% and energy edged up 0.30%, leaving four of the eleven groups in the green. The weight sat elsewhere. Consumer discretionary sank 4.61% and communication services fell 3.50%, the worst performers by a wide margin, while technology, the market’s largest sector, eased 1.01%. The two hardest-hit groups are each home to a company that reported the night before.

Alphabet and Tesla drove the decline. Both posted quarterly results after Wednesday’s close, and both beat on revenue, yet each slid hard on Thursday as investors fixed on the cost side. Alphabet fell about 7% after it lifted its capital-expenditure outlook for the year to a range of $195–205 billion, even as cloud and search revenue grew, sharpening the question of when its heavy investment in artificial intelligence will pay off. Tesla dropped roughly 14%; sales climbed, but profit came in light as the company pointed to another year of aggressive outlays on robots, robotaxis and data centers. Those two losses landed on the discretionary and communication-services sectors and pulled the Nasdaq down further than the broader market.

Two other forces shaped the tape. Brent crude crossed $100 a barrel as attacks on tankers in the Red Sea revived supply worries, which helped energy hold its ground while most of the market fell. The labor market looked firm as well. Initial jobless claims dropped to 187,000, well under forecasts near 212,000 and among the lowest readings in decades, and the 10-year Treasury yield firmed to 4.63%. Neither reading pointed to the kind of economic weakness that usually drives a broad selloff.

Breadth told a friendlier story than the indices. The small-cap Russell 2000, tracked by the IWM exchange-traded fund, slipped just 0.58% and outpaced the large-cap benchmarks, an unusual showing on a down day. The pain was specific, not broad. It clustered in a handful of mega-cap growth names, and the rest of the market barely moved. For the week, the S&P 500 is down 1.67% and the Nasdaq has given back 1.98%, a modest retreat after a strong run. The Cboe Volatility Index, Wall Street’s fear gauge, jumped 12% to 18.70, its highest close in weeks, a sign that traders paid up for protection even as most sectors held.

The earnings calendar stays crowded into the back half of the week, with more large-cap technology and industrial results still to come. Flash readings on business activity are also due, and investors will weigh them alongside the week’s jobs data for signals on the path of interest rates. Oil stays in view as long as the supply questions in the Middle East persist.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.