Wall Street experienced significant declines on Thursday, driven largely by falling technology stocks and a sharp drop in bitcoin, which is now trading at about half its record high achieved last fall. The troubling trend was amplified by lackluster reports regarding the U.S. job market, resulting in decreased yields in the bond market.
The S&P 500 index fell by 1.2%, marking its sixth loss in seven days following an all-time high. The Dow Jones Industrial Average plummeted 592 points, which also equates to a 1.2% decline, while the Nasdaq composite experienced a 1.6% drop.
Qualcomm was among the significant losers, with its shares falling 8.5% despite exceeding analysts’ expectations for profit and revenue in the latest quarter. A disappointing forecast for the upcoming quarter, attributed to an industry-wide shortage of memory affecting handset orders, contributed to the decline.
In the bond market, Treasury yields fell sharply after a report indicated that the number of U.S. workers applying for unemployment benefits surged last week beyond economists’ predictions, leading to concerns about increasing layoffs. This follows a report revealing a notable rise in layoffs announced by U.S.-based employers, marking the highest monthly total since October, according to Challenger, Gray & Christmas.
While some economists viewed the uptick in claims as potentially misleading, the overall figures were concerning, particularly following a separate report indicating that job openings reached their lowest point in over five years. These developments may prompt the Federal Reserve to consider cutting interest rates, although such action could exacerbate inflationary pressures.
The yield on the 10-year Treasury fell to 4.19% from 4.29%, marking a significant shift in the bond market.
The commodity markets mirrored the turmoil seen on Wall Street, with silver prices plunging 9.1% amidst dramatic fluctuations. Gold also lost 1.2%, settling at $4,889.50 per ounce after experiencing severe volatility in recent weeks.
Bitcoin, often referred to as “digital gold,” suffered a steep decline, briefly dropping more than 12% below $64,000, which is significantly lower than its all-time high of above $124,000 recorded in October. The collapse in prices affected stocks of firms linked to the crypto economy, with Coinbase Global tumbling 13.3% and Strategy dropping 17.1%.
Some tech giants were also impacted. Although Alphabet, the parent company of Google and YouTube, reported better-than-expected quarterly profits, its stock fell 0.5%. Investors raised concerns over the company’s substantial investments in artificial intelligence, as it anticipates spending roughly $180 billion this year, considerably more than the $119 billion predicted by analysts.
Despite the overall downturn, there were notable successes in the market. McKesson shares surged by 16.5% after the health care company reported stronger-than-expected profits and revenues, while chipmaker Broadcom gained 0.8%, benefiting from the ongoing AI investment trend.
Overall, the S&P 500 declined by 84.32 points to 6,798.40, the Dow Jones Industrial Average fell by 592.58 points to 48,908.72, and the Nasdaq composite decreased by 363.99 points, closing at 22,540.59.
International markets mirrored the trend, as many indexes across Europe and Asia also posted losses. The UK’s FTSE 100 dropped 0.9%, while France’s CAC 40 and Germany’s DAX saw losses of 0.3% and 0.5%, respectively. South Korea’s Kospi experienced a significant 3.9% decline, highlighting the widespread impact of recent market developments.