Wall Street tumbles as Alphabet's slump weighs on stocks

US Markets Slide as Alphabet Shares Plunge

The US stock market took a significant hit on Thursday, largely due to a steep decline in Alphabet’s stock price. At the same time, gold, silver, and bitcoin all experienced notable losses. Bond yields also dropped following disappointing employment data in the United States.

The S&P 500 retreated by 1.2%, marking its sixth decline in the past seven sessions since reaching a record high. By 10:45 am Eastern, the Dow Jones Industrial Average had fallen 606 points (1.2%), while the Nasdaq composite was down 1.5%.

Alphabet, Google’s parent company, weighed heavily on the market, tumbling 4.3%. This came despite the company and several others posting quarterly earnings that exceeded Wall Street’s forecasts.

Alphabet revealed plans to nearly double its capital expenditures this year, targeting around $180 billion (€152bn), far surpassing analysts’ projections of under $119 billion (€100.5bn), according to FactSet.

Bond Yields Drop on Weak Jobs Data

In the bond market, Treasury yields fell after new data showed a larger-than-expected increase in Americans filing for unemployment benefits last week, hinting at a possible uptick in layoffs.

Some analysts believe the recent rise in claims may be a statistical anomaly, and overall levels remain low by historical standards.

Layoffs Reach Highest January Level Since 2009

Separate figures from Challenger, Gray & Christmas indicated a sharp increase in planned layoffs, with US employers announcing 108,435 job cuts last month—the highest since October and the worst January total since 2009.

Another government report showed that job openings in December dropped to their lowest point in over five years, both compared to the previous month and the same period last year.

Signs of a weakening labor market could prompt the Federal Reserve to consider lowering interest rates to support economic growth, though this could also stoke inflation. Treasury yields responded by falling across the board.

The 10-year Treasury yield slid to 4.21%, down from 4.29% the previous day.

Commodities Experience Volatile Swings

Commodity markets saw even more dramatic fluctuations. Silver plummeted 13.3% in its latest volatile move, following a surge that abruptly ended last week.

Gold also declined, dropping 2.3% to $4,838.80 (€4,087.50) per ounce. The precious metal has been highly volatile, nearly doubling in value over the past year, peaking near $5,600 (€4,729.70) last week before falling below $4,500 (€3,800.70) on Monday.

Both gold and silver had soared as investors sought safer assets amid concerns about political instability, high stock valuations, and mounting global government debt. However, such rapid gains were unsustainable, and many experts anticipated a correction.

Bitcoin Suffers Steep Decline

Bitcoin, often referred to as “digital gold,” also saw a sharp drop, falling below $68,000 (€57,432) after reaching a record high above $124,000 (€104,730) in October.

The cryptocurrency’s decline dragged down related stocks. Coinbase Global, a major crypto exchange, fell 8.3%, while Strategy, a company known for its bitcoin holdings, plunged 11.9%.

Outside the crypto sector, Qualcomm’s shares dropped 7.2% despite beating earnings and revenue expectations. The company’s profit outlook for the current quarter disappointed investors, as a global memory chip shortage led some phone manufacturers to reduce orders.

Estee Lauder also surpassed Wall Street estimates and raised its full-year guidance, but warned that tariffs would erase approximately $100 million (€84.5mn) in profits. The cosmetics giant’s stock sank 21.2%.

Chipmakers and Healthcare Outperform

Some companies managed to buck the downward trend. Broadcom, a chipmaker poised to benefit from increased AI-related spending by Alphabet and others, gained 3.7%, helping to limit the S&P 500’s losses.

Healthcare firm McKesson surged 16.8%—the largest gain in the S&P 500—after reporting better-than-expected earnings and revenue, and raising its profit forecast for the fiscal year.

Global Markets Also Retreat

Stock indices across Europe and Asia mostly declined. London’s FTSE 100 dropped 0.9% after the Bank of England kept interest rates unchanged. France’s CAC 40 lost 0.7%, and Germany’s DAX slipped 0.9% following a similar decision by the European Central Bank.

In Asia, South Korea’s Kospi fell 3.9%, pulling back from its all-time high. Samsung Electronics slid 6%, reversing some of its recent gains after a sharp rally earlier in the week.