US stocks extended losses on Thursday as the macroeconomic backdrop worsened and fresh doubts about AI spending weighed on sentiment following the latest earnings reports. The S&P 500 and the Dow each fell more than 1%, while the Nasdaq 100 dropped 2%.
Alphabet slid 7.5% after releasing its Q2 results overnight. The Google parent doubled its capital expenditure forecast to $205 billion for this year, rekindling concerns that AI infrastructure investment may be unsustainably high. Other hyperscalers followed lower, with Microsoft, Meta, Amazon, and Oracle declining between 3% and 5%.
Tesla tumbled 14%, nearing a one-year low, after reporting weaker profits despite a broadly strong period for the electric vehicle sector overall.
Long-term Treasury yields jumped as tanker traffic in the Middle East faced increasingly tight naval blockades and initial jobless claims fell to their lowest level in 57 years, putting pressure on traditional economic sectors. Financial names were hit, with Goldman Sachs and Robinhood each losing more than 3%, while Comcast and RTX advanced after both beat analysts’ expectations.