Two of the largest companies in the world laid out their spending plans, oil crossed $100 a barrel, and Wall Street fell hard on Thursday. The Nasdaq Composite dropped 2.1% and briefly slipped below 25,000 for the first time since May, its worst day in more than a month. The S&P 500 fell 1.2% and the Dow lost more than 500 points, or about 1%.
Alphabet and Tesla drove the tech selling after both reported results the night before. Alphabet lifted its 2026 capital spending forecast to between $195 billion and $205 billion, up from its earlier range of $180 billion to $190 billion, and pointed to strong AI demand. The stock fell 7%. Tesla dropped about 14%, its steepest one-day decline since June 2025, after an earnings miss and a plan to spend more than $25 billion this year. Both companies reported negative free cash flow for the quarter.
Investors have grown more cautious about how much the big AI spenders are laying out and when it pays off. Meta, Microsoft, and Amazon also fell.
The other pressure came from oil. Brent crude gained 7% to settle at $100.69, its first close above $100 since May 26, after Yemen's Houthis claimed attacks on two Saudi tankers in the Red Sea and President Trump threatened to strike Iranian infrastructure. NPR's Alina Selyukh reported that the Red Sea had served as an alternative route for Saudi Arabia after the U.S. war with Iran shut down the Strait of Hormuz.
Higher oil fed inflation worries and pushed the 10-year Treasury yield past 4.7%, its highest since January 2025.
By Friday morning, Brent had slipped back below $100, and stocks looked set to stabilize.
