North America’s main indexes opened lower on Thursday as investors fretted over Alphabet’s spending plans and Qualcomm’s downbeat forecast.
In Toronto, a sharp precious-metals-led decline also pressured mining stocks
At 9:31 a.m. ET, the S&P/TSX Composite Index was down 1.07 per cent at 32,222.99 points.
In New York, the Dow Jones Industrial Average fell 324.80 points, or 0.66 per cent, to 49,176.50, the S&P 500 lost 63.21 points, or 0.92 per cent, to 6,819.51 and the Nasdaq Composite lost 314.28 points, or 1.36 per cent, to 22,590.30.
Shares of the Google parent fell nearly 6.5 per cent in early trading after Alphabet said it would double its capital-expenditure plans this year, signaling another aggressive push to strengthen its position in the AI race.
Other mega-caps also came under pressure, with Microsoft , Tesla and Meta shedding 2 per cent each.
Big Tech rivals are widely expected to collectively pour more than US$500-billion into AI this year. That spending surge is amplifying growing investor concerns about how quickly Big Tech can translate massive AI outlays into real, measurable returns, and whether lofty valuations can hold up.
“The result is a move away from blind optimism toward profitability, funding discipline and more balanced positioning,” said Russell Shor, senior market analyst at Tradu.
Software and data services stocks, including ServiceNow and Salesforce, stabilized after a bruising selloff this week on fears that fast-advancing artificial intelligence tools were starting to dent demand for traditional software businesses.
Amazon slipped nearly 3 per cent ahead of results due after the market closes, with traders poised to scrutinize its AI spending just as intensely.
Nvidia will be the last “Magnificent 7” member to post results, on February 25. Its shares were largely flat.
Qualcomm slid about 9.5 per cent after forecasting second-quarter revenue and profit below estimates, while Arm dropped 1.4 per cent as licensing revenue missed Wall Street expectations.
As traders trimmed exposure to pricey AI winners, money continued to rotate into cheaper, overlooked parts of the market. The S&P 600 small-cap index climbed 0.9 per cent on Wednesday, the S&P 500 value index gained for a fifth straight session, and the S&P 400 mid-cap index rose 0.7 per cent.
The S&P 500 and the Dow ended lower for a second straight session on Wednesday, as markets questioned whether software and cloud companies can withstand what some investors see as an existential threat from artificial intelligence.
The S&P 500 software and services index logged its sixth consecutive decline, erasing roughly US$830-billion in market value since January 28.
With the federal government reopening after a partial shutdown that delayed key economic releases, the U.S. Bureau of Labor Statistics said on Wednesday that January’s jobs report will be released next week. The December JOLTS report, originally due on Tuesday, is expected later in the day.
The number of Americans filing new applications for unemployment increased more than expected for the week ended January 31, data from the Labor Department showed.
Bitcoin tumbled nearly 5 per cent, falling below US$70,000 to US$69,493 early Thursday. That’s its lowest level since November 2024 and a more than 40 per cent decline since it hit an all-time high around US$125,000 in October.
Cryptocurrencies like bitcoin have dropped after U.S. Treasury Secretary Scott Bessent, said in answer to questions in the House Financial Services Committee on Wednesday that he did not have the authority to order banks to buy such assets.
At midday in Europe, Germany’s DAX slipped 0.1 per cent, the CAC 40 in Paris edged 0.2 per cent higher and Britain’s FTSE 100 gave up 0.3 per cent.
In Asian trading, Tokyo’s Nikkei 225 shed 0.9 per cent to 53,818.04, while the Kospi in South Korea skidded 3.9 per cent, to 5,163.57.
Shares in South Korea’s biggest company, Samsung Electronics, lost 5.9 per cent. Chip maker SK Hynix plunged 6.7 per cent.
Hong Kong’s Hang Seng regained early losses, closing 0.1 per cent higher at 26,885.24. The Shanghai Composite index gave up 0.6 per cent to 4,075.92.
Australia’s S&P/ASX 200 fell 0.4 per cent to 8,889.20, while Taiwan’s Taiex lost 1.5 per cent.
In energy markets early Thursday, U.S. benchmark crude oil fell 81 cents to US$64.33 per barrel. Brent crude, the international standard, lost 86 cents to US$68.60 per barrel.
Prices of precious metals resumed their roller coaster ride, as gold fell 2 per cent to US$4,849 per ounce, while silver sank another 10 per cent to US$75.70.
Their prices have surged and swooned recently as investors sought safer places to keep their money amid worries about everything from tariffs to a weaker U.S. dollar to heavy debt loads for governments worldwide. But critics have said their prices rose too far, too fast and were due for a pullback.
The dollar rose to 157.11 Japanese yen from 156.88 yen. The euro fell to US$1.1797 from US$1.1809.
Reuters and The Associated Press
