Wall St falls as tech earnings spark AI spending worries; oil hits $100
Wall St falls as tech earnings spark AI spending worries; oil hits $100
By Sinéad Carew and Ragini Mathur Thu, July 23, 2026 at 6:56 PM UTC
0
By Sinéad Carew and Ragini Mathur
July 23 (Reuters) - U.S. stocks tumbled on Thursday with Nasdaq down more than 2% after touching its lowest level since early May as the latest earnings updates from large technology companies revived concerns about heavy AI spending, while soaring oil prices amped up inflation worries and pushed up bond yields.
The S&P 500 and the Dow fell more than 1% after second-quarter results from Alphabet and Tesla, the first of the so-called "Magnificent Seven" megacap companies to report this season, failed to impress investors.
Stocks also came under pressure as Brent crude oil futures climbed past $100 a barrel to their highest since late May and U.S. oil futures rose above $90.
Middle East hostilities fanned worries about global oil supplies. The U.S. military launched another round of air strikes on Iran, and Iran attacked neighboring Arab countries that house U.S. bases. U.S. President Donald Trump vowed "major military punishment" for Iran and Houthis, after the Yemeni fighters struck two Saudi oil tankers in the Red Sea.
Surging oil prices fed worries about inflation days before the next Federal Reserve policy meeting. [O/R]
"Oil prices rising at this clip pose a meaningful macro and market risk," said Matt Miskin, co-chief investment strategist at Manulife John Hancock Investments. He added that low unemployment data would pressure the Fed to focus on fighting inflation.
He also pointed to the latest earnings reports, which have pushed down heavyweight stocks and dampened sentiment.
"The numbers in aggregate are great but many companies have had a story that's caused the stock to fall," said Miskin, pointing to worries about capital spending. "Any chink in the armor and the stocks are being sold off."
Advertisement
At 2:26 p.m. the Dow Jones Industrial Average fell 589.27 points, or 1.13%, to 51,629.31, the S&P 500 lost 102.37 points, or 1.37%, to 7,396.59 and the Nasdaq Composite lost 592.41 points, or 2.31%, to 25,098.49.
Among the S&P 500's 11 major industry sectors, only four were advancing with the biggest gain in industrials, up 1.5%. Big gainers included defense giant Lockheed Martin which rose 9.7% after lifting 2026 sales and profit forecasts.
Shares of Google's parent, Alphabet, fell 6.5% after reporting higher spending plans and its first ever cash burn.
The stock's fall dragged the communication services sector down 4.8%, making it the sector with the second biggest decline.
Consumer discretionary was the biggest sector loser, down more than 5%, with its biggest drag from Tesla, which dropped 14% after reporting negative free cash flow in the second quarter for the first time in more than two years.
Wall Street's fear gauge, the CBOE Volatility Index, was up 3 points at 19.64, after hitting its highest level in nearly a month.
With oil prices rising, inflation worries pushed U.S. 2-year Treasury yields to a 17-month high. However traders were still betting on a roughly 64% probability that the Fed would keep interest rates unchanged next week, according to CME Group's FedWatch tool. [US/]
Recently volatile chip stocks were also lower with the Philadelphia semiconductor index off 1.2%. Texas Instruments fell 4.5% despite forecasting quarterly revenue above estimates. Thermo Fisher Scientific shares jumped 9% after the medical equipment maker raised its annual profit forecast and beat estimates for second-quarter results.
Declining issues outnumbered advancers by a 3.35-to-1 ratio on the NYSE, where there were 69 new highs and 323 new lows. On the Nasdaq, 1,203 stocks rose and 3,430 fell as declining issues outnumbered advancers by a 2.85-to-1 ratio. The S&P 500 posted 17 new 52-week highs and 13 new lows while the Nasdaq Composite recorded 37 new highs and 147 new lows.
(Reporting by Sinéad Carew in New Yokr, Ragini Mathur and Avinash P in Bengaluru, additional reporting by Purvi Agarwal; Editing by Amanda Cooper, Shinjini Ganguli, Maju Samuel and David Gregorio)
Source: “AOL Money”
