U.S. stock indexes slid on Thursday as investors leaned into two linked risk calculations: anxiety about how fast AI-powered competitors could reshape industries and higher energy prices tied to uncertainty over tensions between the United States and Iran. The move came even as some companies posted quarterly results that beat expectations, underscoring how investors were focusing on what those results could imply for future competition, costs and demand. The S&P 500 fell 19.42 points to close at 6,861.89, while the Dow dropped 267.50 points to 49,395.16 and the Nasdaq composite fell 70.91 points to 22,682.73.
AI-related concerns continued to ripple through Wall Street, with investors punishing stocks they viewed as exposed to fast-moving AI competition. The selloff touched areas beyond technology, including software and legal services and trucking logistics, as analysts compared the market’s reaction to what they described as a “shoot first-ask questions later” approach. The effect also spread to companies in private credit that had lent to businesses seen as targets of AI disruption.
Among the steepest losers, Booking Holdings fell 6.1%. The stock decline came after the company reported a profit for its latest quarter that edged past analysts’ expectations, according to the AP report. Investors also kept focus on worries that competitors using AI technology could disrupt its industry and take away customers, as Booking’s stock was already down roughly a quarter of its value this year.
The market also reflected individual earnings reactions that went beyond the headline beat. Carvana shares fell 7.9% after it reported a stronger profit than analysts expected; the AP report said investors appeared to pay more attention to how much profit the auto retailer made per vehicle sold, which was lower than expected. Walmart swung after an early gain, finishing down 1.4% after reporting stronger results than analysts expected but issuing a profit forecast for the upcoming year that fell short of estimates.
Some gains helped limit the overall drop. Deere rose 11.6% after the machinery maker reported a higher profit than analysts expected, and CEO John May said the company was seeing continued recovery in demand from construction and smaller agricultural customers, while noting that global, large agricultural customers were still feeling pressure. In the oil-sensitive portion of the market, Occidental Petroleum climbed 9.4% after it also reported a stronger profit than analysts expected.
Energy prices moved higher across the board, tracking concern about the possibility of a wider U.S.-Iran conflict. Benchmark U.S. crude rose 1.9% to $66.43 a barrel, and Brent gained 1.9% to $71.66 a barrel. The AP report said the rise in oil reflected President Donald Trump’s pressure campaign toward Iran, which is home to some of the world’s largest oil reserves, amid a disputed nuclear program—and the risk that a conflict would constrict global oil flows.
Investors also weighed interest-rate signals as they assessed the economic outlook. In the bond market, Treasury yields held relatively steady after a report said the number of U.S. workers applying for unemployment benefits eased last week. The AP report said a solid job market could keep the Federal Reserve on hold longer before it resumes cuts to interest rates, noting Fed officials had said at their last meeting that they want inflation to fall further before supporting additional rate cuts this year.
Other economic data cited in the report pointed to mixed signals, including growth for manufacturing in the mid-Atlantic region accelerating while homebuyers nationwide signed fewer contracts in January to purchase homes. The AP report also said the U.S. trade deficit widened in December by more than economists expected. The 10-year Treasury yield slipped to 4.07% from 4.09% late Wednesday.