Tech earnings, oil hikes drag on indexes Wall St falls as tech earnings spark AI spending worries and oil hits $100

Wall Street indexes closed lower Thursday as large technology companies' earnings updates revived concerns about heavy spending on artificial intelligence, while soaring oil prices amped up inflation worries.

The Dow Jones Industrial Average dropped 506.93 points, or 0.97%, to 51,711.65, the S&P 500 fell 90.66 points, or 1.21%, to 7,408.30 and the Nasdaq Composite tumbled 553.21 points, or 2.15%, to 25,137.69.

The S&P 500 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 $100 a barrel for the first time since May, and U.S. oil futures settled above $92, prompting worries about inflation days before the next Federal Reserve policy meeting and pushing U.S. 10-year Treasury yields to their highest levels since early 2025.

Middle East hostilities fanned worries about global oil supplies. The U.S. launched more airstrikes on Iran, and Iran fired at U.S. bases in nearby countries. 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 S&P 500's 11 major industry sectors were a mixed bag with just four advancing for 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 finished up 7.3% after it raised its 2026 sales and profit forecasts on demand for commercial aircraft maintenance and military systems.

Shares of Google's parent company, Alphabet, sank 7%, the second-biggest drag on the benchmark index after it reported higher spending plans while it also burned cash.

The stock's fall also dragged down the communication services index 5.20%, making it the weakest of the 11 sectors.

Consumer discretionary was the second-biggest loser, ending down 5.12%. Its biggest drag was from Tesla, whose shares fell 14.5%, after it reported negative free cash flow in the second quarter for the first time in more than two years.

Wall Street's fear gauge, the CBOE Volatility Index, finished up 2.06 points at 18.7.

The Philadelphia semiconductor index ended down 0.5% as investors anticipated results from chip giant Intel. Shares in analog chip company Texas Instruments finished down 3% despite forecasting quarterly revenue above estimates.

Shares in Thermo Fisher Scientific rallied 8.7% after the medical equipment maker raised its annual profit forecast and beat estimates for second-quarter results.