Major U.S. Stock Indexes Close Sharply Lower Amid Big Tech Earnings & Risk-Off

U.S. stock markets plunged Thursday, led by declines in the tech sector after disappointing earnings from Meta Platforms and Microsoft. The tech-heavy Nasdaq Composite dropped around 1.6 %, the S&P 500 fell 1 %, while the Dow Jones Industrial Average declined marginally by 0.2 %.

Meta’s shares tumbled over 11 % after the company revealed sharply higher capital expenditures in its AI business despite solid revenue, raising questions about the profitability of its AI-driven strategy. Microsoft also slipped, down around 2–3 %, as investors weighed its elevated spending and broader tech exposure.

Broader market risk sentiment was hit by renewed uncertainty around the Federal Reserve’s next steps, with comments from Chair Jerome Powell dampening expectations of an imminent rate cut. Combined with weak earnings, the tone shifted toward caution.

What to Watch:

• Upcoming earnings from other major tech players, which may further clarify investor appetite for AI and growth stocks.

• The Fed’s next policy statement and trial-balloon pronouncements for a clearer path on rates.

• Risk flows — if weakness persists, traders may shift further out of stretched growth assets into defensives or real assets.

The slide suggests that the recent rally may be losing steam, and investors might be taking profits or reassessing risk exposures ahead of major catalysts.