US stocks tumble on renewed concerns over massive AI spending, rising crude prices | Stock Market News
US stock markets declined sharply on Thursday as investor sentiment weakened amid renewed concerns over aggressive artificial intelligence (AI) spending by technology giants and a sharp spike in oil prices triggered by the escalating conflict in the Middle East.
As of 10 a.m. Eastern Time, the S&P 500 dropped 1%, the Dow Jones Industrial Average was down 1%, and the Nasdaq Composite was 1.8% lower.
At the open, the Dow Jones Industrial Average fell 463.0 points, or 0.89%, to 51755.54. The S&P 500 fell 80.7 points, or 1.08%, to 7418.29, while the Nasdaq Composite dropped 445.4 points, or 1.73%, to 25245.542.
Adding to market jitters, international benchmark Brent crude surged above the $100 a barrel mark after Yemen's Iran-backed Houthi rebels reportedly attacked oil tankers in the Red Sea. Brent futures jumped 6.7% to $100.40 a barrel, raising fresh concerns over global energy supplies and inflation.
The latest attacks have intensified fears over disruptions to one of the world's key oil shipping routes. Besides the Strait of Hormuz, the Red Sea serves as a crucial corridor for transporting crude from the Middle East to global markets, making any disruption a major concern for energy traders.
Highlighting the strategic importance of the region, U.S. President Donald Trump warned of "major military punishment" against the Houthi rebels, escalating fears that the conflict could widen further and disrupt global trade.
Meanwhile, the benchmark 10-year U.S. Treasury yield climbed to 4.70%, up from 4.67% in the previous session, reflecting heightened concerns over inflation and the potential for interest rates to remain elevated.
Alphabet shares fell more than 6%, even after Google's parent company posted quarterly revenue and profit that topped analysts' estimates, as investors remained cautious about the company's rising AI-related investments.
Tesla plunged more than 12% after the electric vehicle maker reported quarterly earnings that missed market expectations, raising concerns about slowing demand and pressure on margins.
Among airline stocks, American Airlines dropped 8.6% despite delivering significantly stronger-than-expected spring-quarter earnings, while Southwest Airlines declined 4.7% even after reporting quarterly profit and revenue that exceeded analysts' forecasts.
The broad-based decline reflected growing investor caution as markets weighed corporate earnings, elevated AI spending, rising Treasury yields and the prospect of prolonged geopolitical tensions driving energy prices even higher.
Gold prices slipped on Thursday, retreating from a two-week high hit in the previous session, as the iran-US conflict drove energy prices higher.
By 09:14 a.m. EDT (1314 GMT), spot gold dropped 2.1% to $4,041.59 per ounce. US gold futures for August delivery slid 2.6% to $4,043.50.
Among other metals, spot silver slid 4.3% to $57.15 per ounce, platinum fell 3.1% to $1,593.17, and palladium dipped 2.8% to $1,255.
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