Wall Street experienced significant declines on Thursday, primarily driven by a drop in technology stocks and a plummet in bitcoin’s value, which has now settled at nearly half of its record high from the previous fall. The S&P 500 index saw a decrease of 1.2% for the sixth time in seven days following its recent all-time peak. The Dow Jones Industrial Average fell by 592 points, or 1.2%, while the Nasdaq composite reported a decrease of 1.6%.
One of the largest contributors to the market’s downturn was Qualcomm, which fell 8.5%. Despite surpassing analysts’ expectations for profit and revenue in the latest quarter, its forecast for the upcoming quarter was disappointing due to an industry-wide shortage of memory chips, causing some handset manufacturers to reduce their orders.
In the bond market, Treasury yields dropped sharply after a report indicated a rise in the number of U.S. workers filing for unemployment benefits last week, exceeding economists’ projections. This trend could suggest a growing rate of layoffs. Although some economists have characterized this spike as statistical noise, the total number of claims remains comparatively low historically. Another report highlighted a significant increase in layoffs announced by U.S.-based companies, which totaled 108,435 in the previous month—the highest monthly figure since October. This marks the worst performance for January since 2009 during the Great Recession.
Additional data from the U.S. government revealed that job openings plummeted to their lowest level in over five years, raising concerns about ongoing job market weakness. Such developments could prompt the Federal Reserve to consider cutting interest rates to bolster the economy, despite potential risks of exacerbating inflation. In response to these indicators, Treasury yields fell sharply, with the 10-year yield dropping to 4.19% from 4.29%.
Commodity markets also experienced volatility, with silver prices dropping 9.1% following a wild swing after last week’s momentum came to a halt. Similarly, gold saw a decrease of 1.2%, falling to $4,889.50 per ounce. This turmoil comes after a period of significant price increases driven by investor concerns over political instability, high market valuations, and large government debts globally. Critics had anticipated a pullback in prices, and those predictions are materializing. Bitcoin, often likened to “digital gold,” also faced a steep decline, briefly falling over 12% below $64,000, a stark contrast to its record price exceeding $124,000 last October. This downturn affected companies linked to the cryptocurrency sector, with Coinbase Global dropping 13.3% and Strategy, a firm dedicated to bitcoin investments, suffering a 17.1% fall.
Within the broader market, Alphabet’s shares fell by 0.5%, although they had previously dipped by as much as 8%, despite the company reporting better-than-expected profits for the latest quarter. Investors expressed concern regarding Alphabet’s spending on artificial intelligence, which could increase significantly this year, exceeding analysts’ expectations. Estee Lauder also reported stronger-than-anticipated earnings and raised financial forecasts, yet the company’s stock dropped 19.2%, likely due to heightened expectations from analysts amid its restructuring and tariff-related challenges.
On a more positive note, some companies managed to thrive amidst this turmoil. Broadcom rose by 0.8%, benefiting from ongoing investment in AI, and McKesson’s shares surged 16.5% following strong profit and revenue reports, along with an increased profit forecast for the fiscal year.
In summary, the S&P 500 decreased by 84.32 points, settling at 6,798.40. The Dow Jones dropped 592.58 points to 48,908.72, and the Nasdaq composite fell by 363.99 points to 22,540.59. Internationally, market sentiment was similarly negative, with major indexes across Europe and Asia reporting declines. London’s FTSE 100 dipped 0.9%, France’s CAC 40 fell 0.3%, and Germany’s DAX decreased by 0.5%. South Korea’s Kospi also saw one of the most significant downturns globally, tumbling 3.9% following a sharp rise just days before.
