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U.S. stocks across the board fell sharply on Thursday as investors grew increasingly doubtful that heavy investments in artificial intelligence would deliver immediate returns.
The blue-chip Dow Jones Industrial Average fell 1.2% (592.58 points) to 48,908.72, while the broad-based S&P 500 declined 1.23% (84.32 points) to 6,798.40 and the tech-focused Nasdaq Composite dropped 1.59% (363.99 points) to 22,540.59.
The pullback followed earnings reports from Alphabet and Microsoft, which reignited concerns about the long-term profitability of massive capital spending on AI development, despite both companies reporting revenue that exceeded market expectations.
Several of the so-called "Magnificent Seven" stocks that had driven 2025 gains posted losses, with Microsoft tumbling 5.0% and Amazon sliding 4.4%. Bloomberg’s Magnificent 7 index dropped by 1.8% on the day.
Amazon’s decline was tied to its disclosure of plans to ramp up capital expenditures in AI-related infrastructure, stoking investor concerns about delayed returns. After the market closed, shares of the e-commerce giant fell by around 7% after it reported earnings well above estimates for the last quarter but announced plans to invest $200 billion in artificial intelligence.
Precious metals followed suit with broad losses. Gold prices fell nearly 4% to $4,780 per ounce, while silver plunged 20% to $70. Palladium and platinum dropped 6% and 10%, settling at $1,641 and $1,971 respectively.
Energy markets also reacted to geopolitical developments. Brent crude fell nearly 3% to $67.44 per barrel, and West Texas Intermediate (WTI) slid to $63.12. The declines came after the United States and Iran confirmed indirect nuclear talks will proceed in Oman on Friday, Feb. 6.
In cryptocurrencies, bitcoin fell 14% over the past 24 hours to $63,070, while Ethereum, the second-largest by market value, declined 13% to $1,875.
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