Lead: U.S. stocks slid again on Thursday as risk appetite waned, with the Dow Jones Industrial Average losing 401 points (about 0.8%) and the Nasdaq posting its third straight daily decline. The pullback hit technology names and cryptocurrencies hard — bitcoin tumbled below $67,000 after earlier slipping beneath the $70,000 support. Market stresses were compounded by fresh data showing weak labor-market signals and a sharp drop in silver prices, leaving major indexes in negative territory for the year. Investors parsed heavy capital-spending plans from big tech and earnings misses that together intensified the rotation out of richly valued growth trades.
Key takeaways
- The Dow fell 401 points (0.8%), the S&P 500 declined 0.8% and the Nasdaq Composite slid 1.1% on Thursday, with session lows at roughly Dow -700 (≈1.4%), S&P -1.5% and Nasdaq -1.9%.
- Alphabet said 2026 capital expenditures could reach as much as $185 billion, weighing on its shares (down about 1% at last trade) even as some AI suppliers, like Broadcom, gained (Broadcom +2%).
- Qualcomm came under pressure after forecasting weakness tied to a global memory shortage, sliding roughly 7% during the session (premarket swings approached -9.5%).
- Bitcoin fell below $67,000 after earlier breaking the $70,000 level; CoinMetrics data showed the cryptocurrency moving lower as risk assets sold off.
- Silver resumed heavy losses, dropping as much as 16% on the day after plunging nearly 30% the prior Friday; SLV ETF was trading below its 50-day moving average.
- Challenger, Gray & Christmas reported 108,435 U.S. layoff announcements in January — the largest January total since 2009 — while BLS JOLTS data showed job openings at 6.54 million, the lowest since September 2020.
- Initial jobless claims for the week ended Jan. 31 rose to 231,000, and the CBOE VIX climbed above 22, the highest since November, signaling elevated market volatility.
Background
The market pullback comes after an extended period of strong performance for large-cap technology and AI-focused stocks, which had driven much of the market’s gains in recent years. In recent sessions investors have rotated away from richly valued growth names into cheaper parts of the market, prompted by a string of earnings reports, mixed macro data and concerns about near-term demand. The prospect of outsized corporate capital expenditures — particularly when tied to AI infrastructure — has created a two-sided reaction: some investors see higher capex as a demand signal for suppliers, while others worry about margin pressure and overinvestment.
Financial conditions have tightened episodically since mid-2024 amid elevated interest rates and persistent inflation above the Fed’s 2% target; Fed officials have warned that disinflation progress has slowed. At the same time, retail trading flows and ETF positioning amplified moves in specific sectors: momentum and software names led declines, with some funds hitting technical thresholds that accelerated selling. Market participants are also watching labor-market indicators closely for early signs of a cooling that could affect consumer spending and corporate revenue.
Main event
Thursday’s action was broad-based. The Dow closed down 401 points (0.8%), while the S&P 500 and Nasdaq fell 0.8% and 1.1%, respectively. Equities briefly traded much lower during the session — the Dow approached a 700-point intraday drop — before rebounding slightly into the close. Volatility rose as the VIX moved above 22, reflecting investors’ reassessment of risk.
Alphabet’s quarterly commentary drew attention: management outlined a major increase in planned capital expenditures related to AI initiatives, citing possible 2026 capex of up to $185 billion. That guidance unsettled some investors worried about elevated spending, though it also boosted shares of chip and infrastructure suppliers such as Broadcom, which jumped roughly 2% on the news. Market participants emphasized that capex announcements are being read both as a vote of confidence in AI demand and as a potential near-term margin drag.
Semiconductor-related names were particularly volatile. Qualcomm posted a forecast that reflected weakness tied to a global memory shortage and weaker handset demand, prompting a multipercent decline (about 7% intraday, with wider premarket swings). Bank of America’s downgrade of Qualcomm and other analyst actions added to the pressure. Software stocks, already under strain, extended declines and in some cases entered bear-market territory after heavy selling earlier in the week.
Outside equities, bitcoin’s slide below $67,000 intensified crypto-market losses; some traders pointed to the $70,000 level as a key technical support whose breach raised the odds of further downside. Precious metals also saw dramatic moves: silver resumed its collapse with intraday losses as steep as 16%, following last week’s near-30% plunge that rattled leveraged and retail positions in SLV.
Analysis & implications
Markets are effectively repricing several cross-currents: elevated corporate investment in AI, uneven demand in key end markets (handsets, enterprise software), and softer labor-market signals. The combination increases uncertainty about profit growth trajectories for high-growth names and could extend sector rotation into value and cyclical areas if consumer demand weakens. That said, large-scale capex can lift suppliers and infrastructure plays even as it raises questions about the timing of returns.
Labor-market indicators are now under the microscope. January layoffs announced to Challenger, Gray & Christmas reached 108,435, the largest January total since 2009, while BLS JOLTS openings fell to 6.54 million — a substantial pullback from 2021–22 peak levels. If the forthcoming BLS January payrolls report (delayed by the recent partial government shutdown) confirms a weakening trend, markets may increasingly price in lower growth and higher recession risk, which would affect rates and equities alike.
Monetary policy expectations could shift if labor-market cooling becomes evident. Some strategists argue that a clear deterioration would increase the likelihood of a Fed rate cut in the spring (March or April), while others caution that a single monthly report would be insufficient to change the policy outlook. For now, higher-than-target inflation readings reported in 2025 — and Fed commentary noting stalled disinflation — keep the balance delicate between easing hopes and persistent inflation risks.
Crypto and commodity volatility illustrate how concentrated positioning and leveraged flows can magnify moves. Breaks of technical support levels in bitcoin and silver have triggered rapid unwinds, forcing some funds and retail holders to reduce exposure quickly. That dynamic can exacerbate market stress even if the underlying fundamentals vary across assets.
Comparison & data
| Index/Asset | Today change | Session low |
|---|---|---|
| Dow Jones Industrial Average | -401 pts (-0.8%) | ≈ -700 pts (≈ -1.4%) |
| S&P 500 | -0.8% | -1.5% |
| Nasdaq Composite | -1.1% | -1.9% |
| Bitcoin | Below $67,000 | Earlier below $70,000 |
| Silver (intraday) | -as much as 16% | Plunged ~30% last Friday |
The table above summarizes key moves on Thursday and compares them with recent extreme intraday swings. These figures show simultaneous stress in equities, crypto and commodities — an uncommon alignment that can accelerate cross-asset selling as investors reduce correlated exposures. Traders cited technical triggers, concentrated sector positioning, and fresh macro signals as the principal drivers.
Reactions & quotes
Market advisers and policymakers offered varied takes as trading unfolded. Some wealth managers emphasized that big capex plans can be both a sign of confidence in long-term demand and a cause for short-term caution.
“We’re actually viewing that as a positive sign for the market’s health in general,”
Stephen Tuckwood, Modern Wealth Management
Tuckwood argued that large-scale spending by tech firms may indicate real demand for AI infrastructure, even if investors initially react to the headline cost. He also warned that parts of the tech sell-off may be overdone at some point, creating selective buying opportunities for long-term investors.
“Progress on inflation essentially stalled in 2025,”
Fed Governor Lisa Cook
Cook’s remarks underscore why the Fed has remained cautious: inflation metrics were above target last year, complicating the path to sustained cuts. Her comment reinforces the tension between stronger-than-expected price readings and market hopes for easing monetary policy.
“Retail traders bought the dip in Microsoft and took profits in Meta,”
JPMorgan research note
JPMorgan’s analysis highlighted how retail flows magnified movements in specific mega-cap names during January, with individual investors still tilting toward technology despite recent sector stress. That behavior helps explain the uneven distribution of gains and losses within the market.
Unconfirmed
- Whether the BLS January jobs report will definitively confirm a sustained labor-market weakening is unresolved; markets await the delayed payrolls release for confirmation.
- The extent to which Alphabet’s capex will redistribute market leadership across chip and software suppliers — creating clear winners and losers — remains to be determined as companies disclose execution details.
- It’s unconfirmed that a breach of the $70,000 bitcoin level will trigger a prolonged crypto downturn; technical selling could be short-lived if buyers step in at lower levels.
Bottom line
Thursday’s trading reflected a convergence of signals: aggressive tech and crypto positioning, weaker labor-market indicators and fresh company guidance that together prompted a risk-off shift. The Dow’s 401-point drop and the Nasdaq’s third straight fall show that market leadership is under reassessment, particularly for sectors built on lofty growth expectations.
Investors will now watch the delayed BLS jobs report and upcoming earnings closely for confirmation of any trend changes. If labor-market deterioration and softer demand become clearer, markets may further reprice growth expectations and the Fed outlook, potentially extending the current rotation away from high-multiple growth names toward more defensively valued assets.