United States benchmark averages closed lower on Thursday (Friday AEDT), as investors moved to a risk-off stance, triggering a sharp sell-off across technology stocks and cryptocurrencies.
The Dow Jones Industrial Average fell 592.6 points, or 1.2%, to finish at 48,908.7. The S&P 500 declined 84.3 points, or 1.2%, to 6,798.4, slipping into negative territory for the year. The Nasdaq Composite underperformed, dropping 364.0 points, or 1.6%, to 22,540.6.
Pressure on the technology sector intensified after Alphabet became the latest of the so-called “Magnificent Seven” to report earnings.
While results largely met expectations, the company flagged a sharp increase in artificial intelligence investment, projecting capital expenditure of up to US$185 billion in 2026.
The outlook unsettled investors wary of rising costs, with Alphabet shares closing 0.6% lower.
Not all chip-linked stocks moved in the same direction. Broadcom shares rose 0.8% following Alphabet’s spending forecast, offering some support to parts of the artificial intelligence trade.
Elsewhere in the sector, Qualcomm shares slumped 8.5% after the company issued a weaker-than-expected outlook, citing a global memory shortage as a key headwind.
Risk sentiment was further dented by continued weakness in cryptocurrencies. Bitcoin fell below $64,000 after earlier breaking under the $70,000 level, widely viewed by traders as a key support zone, extending the recent sell-off across digital assets.
Economic data releases added to the cautious tone. Outplacement firm Challenger, Gray & Christmas reported that U.S. employers announced 108,435 layoffs in January, the highest January total since the global financial crisis.
Concerns about labour market softness deepened after initial jobless claims for the week ended 31 January rose more than expected, while job openings in December fell to their lowest level since September 2020.
The data comes ahead of next week’s January employment report from the Bureau of Labor Statistics, which was delayed due to the partial U.S. government shutdown that ended earlier this week.
On the bond markets, U.S. Treasury yields moved lower, with the 10-year yield down 2.2% to 4.186% and the 2-year yield falling 2.6% to 3.461%.
