Dow drops 500 points, Nasdaq craters for a third day as stock sell-off gains steam

U.S. equities fell for another day on Thursday as investors took a risk-off stance, leading popular trades in technology and bitcoin to unravel.

The Dow Jones Industrial Average shed 507 points, or 1%. The S&P 500 lost 1%, landing in negative territory for the year, while the Nasdaq Composite declined 1.2%. The 30-stock Dow was down nearly 700 points, or about 1.4%, at session lows, while the broad market S&P 500 and Nasdaq dropped 1.5% and 1.9%, respectively.

Alphabet was the latest of the “Magnificent Seven” companies to report earnings results. The company projected a sharp increase in artificial intelligence spending that spooked some investors, calling for 2026 capital expenditures of up to $185 billion. Shares were last down 2%. 

Shares of Broadcom jumped 2%, while Nvidia was marginally higher following news of Alphabet’s spending plans, offering some hope for the artificial intelligence trade as the market deciphers its winners and losers.

“The fact that some of these companies do release and they announce just additional capex spending — and it is astronomical at this point — we’re actually viewing that as a positive sign for the market’s health in general, because ... it’s more that the market is discerning at this point rather than just irrational exuberance,” said Stephen Tuckwood, director of investments at Modern Wealth Management.