Latest earnings updates from large technology companies revived investor concerns about heavy AI spending. (EPA Images pic) NEW YORK: Wall Street indexes closed lower on Thursday with Nasdaq sinking more than 2% as the latest earnings updates from large technology companies revived concerns about heavy AI spending, while soaring oil prices amped up inflation worries, lifting bond yields.The S&P 500 fell more than 1% as losses were broad-based after investors were unimpressed by second-quarter results from Alphabet and Tesla, the first of the heavyweight "Magnificent Seven" companies to report results this season.Stocks came under additional pressure as Brent crude oil futures settled above US$100 a barrel for the first time since May, and US oil futures settled above US$92.Intensifying Middle East hostilities fanned worries about global oil supplies. The US military launched another round of air strikes on Iran, and Iran fired at US bases in nearby countries.
US President Donald Trump vowed "major military punishment" for Iran and Houthis, after the Yemeni fighters struck two Saudi oil tankers in the Red Sea.The resulting surge in oil prices prompted worries about inflation days before the next US Federal Reserve policy meeting."Oil prices rising at this clip pose a meaningful macro and market risk," said Matt Miskin, co-chief investment strategist at Manulife John Hancock Investments. He added that low unemployment data would pressure the Fed to focus on fighting inflation.He also pointed to the lack of enthusiasm, even for strong earnings reports as investors struggle to justify high valuations."The numbers in aggregate are great but many companies have had a story that's caused the stock to fall," said Miskin, pointing to worries about capital spending as one example. "Any chink in the armor and the stocks are being sold off."The Dow Jones Industrial Average fell 506.93 points, or 0.97%, to 51,711.65, the S&P 500 lost 90.66 points, or 1.21%, to 7,408.30 and the Nasdaq Composite lost 553.21 points, or 2.15%, to 25,137.69.The S&P 500's 11 major industry sectors were a mixed bag with just four advancing on the day.
The biggest gainer was industrials, up 1.77% with boosts from defense stocks including Lockheed Martin and RTX.Shares in Lockheed rallied 10.5% after it lifted 2026 sales and profit forecasts. RTX was the S&P 500's second biggest boost as it fini…
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