WASHINGTON (dpa-AFX) - After ending Wednesday's choppy session modestly lower, stocks showed a more substantial move to the downside during trading on Thursday. The major averages all moved notably lower, with the tech-heavy Nasdaq showing a particularly steep decline.
The major averages ended the day off their lows of the session but still firmly negative. The Nasdaq plunged 553.21 points or 2.2 percent to 25,137.69, the S&P 500 tumbled 90.66 points or 1.2 percent to 7,408.30 and the Dow slumped 506.93 points or 1 percent to 51,711.65.
The sell-off on Wall Street partly reflected a negative reaction to earnings news from tech giants Tesla (TSLA) and Alphabet (GOOGL).
Electric vehicle maker Tesla plummeted by 14.5 percent after reporting weaker than expected second quarter earnings along with a surge in capital spending.
Shares of Alphabet also plunged by 7.1 percent after the Google parent reported better than expected second quarter results but raised its capital spending forecast.
Selling pressure was also generated in reaction to a sharp increase by the price of crude oil, with U.S. crude oil futures soaring by nearly 6 percent and jumping back above $90 a barrel.
The spike by crude oil prices came after Yemen's Houthis claimed they had attacked two Saudi oil tankers in the Red Sea for violating their maritime blockade.
President Donald Trump said in a post on Truth Social that the U.S. would hold Iran responsible if the militant group continues the attacks.
The continued surge by the price of crude oil has added to recent concerns about the outlook for inflation and the possibility of higher interest rates.
'With nerves about the potential inflationary impact of the escalating conflict in the Middle East colliding with worries about soaring tech capex it's been tough to find the optimism,' said Danni Hewson, AJ Bell head of financial analysis.
'It's worth remembering that at the start of the month the price was hovering around $70 a barrel and markets had dared to hope that central bankers might be able to seamlessly shift from a pause to further cuts,' she added.
In U.S. economic news, the Labor Department released a report showing first-time claims for unemployment benefits unexpectedly decreased in the week ended July 18th.
The report said initial jobless claims fell to 187,000, a decrease of 22,000 from the previous week's revised level of 209,000.
Economists had expected jobless claims to rise to 212,000 from the 208,000 originally reported for the previous week.
With the unexpected decrease, jobless claims dropped to their lowest level since hitting 182,000 in the week ended September 6, 1969.
Sector News
Airline stocks moved sharply lower on the day, dragging the NYSE Arca Airline Index down by 3.3 percent to its lowest closing level in well over a month.
American Airlines (AAL) helped lead the sector lower, plummeting by 8.4 percent after reporting better than expected second quarter results but cutting its full-year profit outlook.
Substantial weakness was also visible among retail stocks, with the Dow Jones U.S. Retail Index plunging by 2.6 percent to a three-month closing low.
Software, gold and telecom stocks also saw considerable weakness, while biotechnology, pharmaceutical and healthcare stocks bucked the downtrend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index climbed by 0.5 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent.
Meanwhile, the major European markets moved to the downside on the day. While the U.K.'s FTSE 100 Index slid by 0.7 percent, the German DAX Index and the French CAC 40 Index both tumbled by 1.6 percent.
In the bond market, treasuries saw notable weakness, extending a recent downward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 4.6 basis points to 4.703 percent, its highest closing level since early 2025.
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