Alphabet Pulls Wall Street Down Amid Bitcoin, Silver, and Gold Decline
On Thursday, U.S. stock markets experienced a notable decline, primarily influenced by a significant drop in Alphabet Inc., the parent company of Google. This downturn coincided with falling prices for bitcoin, silver, and gold, and weakening yields in the bond market, following troubling news regarding the job market.
Stock Market Overview
The S&P 500 index decreased by 1.2%, marking its impending sixth loss in the past seven days. The Dow Jones Industrial Average plummeted by 606 points, also a 1.2% drop, by 10:45 a.m. ET. The Nasdaq composite fell by 1.5% during the same timeframe.
- S&P 500: -1.2%
- Dow Jones: -606 points (1.2%)
- Nasdaq: -1.5%
Alphabet’s Impact on the Market
Alphabet saw a 4.3% decrease in its stock, despite reporting higher-than-expected profits for the last quarter. Concerns regarding its substantial investments in artificial intelligence have overshadowed its financial performance. Alphabet’s expenditure on equipment and technology could reach up to $180 billion, far exceeding analysts’ predictions of $119 billion.
Job Market Concerns
New data revealed a troubling surge in unemployment benefits applications, with claims increasing more than anticipated last week. This news signals a possible acceleration in layoffs, prompting discussions among economists about the health of the job market. In January, U.S.-based employers reported 108,435 layoffs, the highest monthly total since October 2009.
Commodity Market Trends
The commodity market also faced substantial declines. Silver prices plunged by 13.3%, while gold dropped 2.3%, settling at approximately $4,838.80 per ounce. Both metals have been extremely volatile recently, with gold prices struggling to maintain their elevated levels due to investor trepidation about economic stability.
- Silver: -13.3%
- Gold: -2.3% (approximately $4,838.80 per ounce)
Cryptocurrency Decline
Bitcoin, often referred to as “digital gold,” fell below $68,000, a stark reduction from its previous high of over $124,000 in October. This decline negatively impacted companies within the cryptocurrency sector, including Coinbase Global, whose stock dropped by 8.3%.
Mixed Outcomes for Other Companies
Despite the market’s overall downturn, some companies showed resilience. Broadcom’s stock rose by 3.7% due to expected benefits from ongoing spending in artificial intelligence. McKesson experienced a significant gain of 16.8% after exceeding earnings forecasts.
International Market Reactions
Global stock markets mirrored the U.S. trend, with declines observed in major indexes across Europe and Asia. London’s FTSE 100 fell by 0.9% following the Bank of England’s interest rate decision. The CAC 40 in France and Germany’s DAX also marked losses of 0.7% and 0.9%, respectively. South Korea’s Kospi experienced a notable 3.9% drop.
As market participants digest these developments, the potential for changes in fiscal policy may become a focal point in the weeks ahead.
