U.S. stocks closed lower on Thursday, with technology stocks leading the declines. The Dow Jones Industrial Average fell nearly 600 points, while the Nasdaq Composite and the S&P 500 indexes declined for a third consecutive session. As investors adopted a risk-off stance, Bitcoin and Silver prices plummeted. Market participants focused on signs of a cooling labor market.

The Dow dropped 592.58 points, or 1.20%, to close at 48,908.72. The Nasdaq fell 363.99 points, or 1.59%, to 22,540.59. The S&P 500 declined 84.32 points, or 1.23%, to 6,798.40. With Thursday's close, the S&P 500 erased all its gains for the year. Alphabet closed down 0.5%. The company's forecast for a significant increase in artificial intelligence spending unsettled some investors, projecting capital expenditures could reach as high as $185 billion by 2026. For the fourth quarter of 2025, Alphabet's performance surpassed expectations from revenue to EPS. However, the company disclosed that this year's capital expenditures would be between $175 billion and $185 billion, nearly double the amount for the entire year of 2025, which stunned Wall Street. Beyond Alphabet, Qualcomm also faced pressure, with its stock falling sharply after issuing a weaker-than-expected outlook due to the global memory chip shortage. Simultaneously, the sell-off in the cryptocurrency market intensified, with Bitcoin falling below $63,000, down 14.19% for the day. In the precious metals sector, silver prices came under pressure again, with spot silver falling 18% during the session to $72.12 per ounce at the U.S. market close on Thursday. Silver prices had plunged nearly 30% the previous Friday. A report from outplacement firm Challenger, Gray & Christmas exacerbated market pessimism, showing that U.S. employers announced 108,435 job cuts in January, the highest number of January layoffs since the 2008 global financial crisis. Wall Street had just experienced a turbulent trading session, with a sell-off in chip and software stocks causing the S&P 500 to close lower for a second consecutive day. As the tech sell-off accelerated, the S&P 500 and Nasdaq Composite fell 0.5% and 1.5%, respectively. The widespread decline in software stocks was triggered by Anthropic's launch of a new AI assistant named "Cowork," sparking a sharp sell-off in data and legal software stocks. Affected by this, Thomson Reuters, LegalZoom.com, and RELX fell significantly as investors assessed the risk of disruption to traditional SaaS models; FactSet and Blue Owl also declined. However, driven by a sector rotation out of technology stocks and into value and cyclical stocks, the Dow Jones Industrial Average bucked the trend on Wednesday, rising 260 points, or 0.5%. The S&P 500 Equal Weight Index gained 0.9%. Software stocks were hit hard due to market concerns about the disruptive impact of artificial intelligence on the industry, prompting investors to withdraw massively from the tech sector and shift to other market areas with more attractive valuations. Wall Street strategists also issued warnings: the era of tech giants dominating the market may be ending. The current market dynamic has become clear, with the software stock plunge triggering a broad sell-off in tech stocks, which hold the highest weightings in growth indices. Nevertheless, by the end of the trading session, many investors believed the selling was overdone and argued it might be a buying opportunity. Sonali Basak, Chief Investment Strategist at iCapital, stated, "I think a lot of assets have been sold off. Some software companies, particularly the existing leaders in industries that will ultimately prevail, are worth watching closely, even if it's not time to buy just yet." In central bank news overseas, the European Central Bank kept its three key interest rates unchanged on Thursday. The European Central Bank decided to maintain the eurozone's three key interest rates at its monetary policy meeting held at its headquarters in Frankfurt, Germany, on the 5th, in line with market expectations. According to a press release issued by the ECB, the interest rates on the deposit facility, main refinancing operations, and marginal lending facility were held steady at 2.00%, 2.15%, and 2.40%, respectively. The ECB stated that its latest assessment indicates that inflation is expected to stabilize around the 2% target in the medium term.

U.S. January Planned Layoffs Hit Highest Level Since 2009; Weekly Jobless Claims Rise More Than Expected A report from Challenger, Gray & Christmas on Thursday indicated that the number of planned job cuts by U.S. companies in January reached the highest level for that month since the global financial crisis, while hiring intentions dropped to the lowest point for January on record. U.S. employers announced 108,435 job cuts this month, a 118% increase from a year ago and a surge of 205% from December 2025. This total marks the highest since January 2009, when the U.S. economy was in the final stages of the most severe recession since the Great Depression. Concurrently, companies announced only 5,306 new hiring plans, also the lowest January figure since 2009, the year Challenger began tracking this data. The recession triggered by the crisis officially ended in March 2009. Although recent commentary has focused on a labor market characterized by a "no hire, no fire" stance, the Challenger data suggests the layoff side may be intensifying. Andy Challenger, Workplace Expert and Chief Revenue Officer at the firm, said, "We typically see a high volume of layoffs in the first quarter, but this January's total is particularly notable. It suggests many of these plans were finalized by the end of 2025, indicating employers are not optimistic about the 2026 outlook." To be sure, even as employers accelerate layoff plans, this trend is not yet reflected in official U.S. government data. Separately, the U.S. Labor Department reported on Thursday that initial claims for unemployment benefits rose significantly last week, reaching the highest level since early December and reversing a recent downward trend. Following winter storms that swept across large parts of the South and East, seasonally adjusted initial claims totaled 231,000 for the week ending January 31, an increase of 22,000 from the previous week's unrevised figure and higher than the 212,000 forecast in a Dow Jones survey. Continuing claims, which lag by one week, also rose, increasing by 25,000 to 1.84 million. However, the four-week moving average for continuing claims fell to its lowest level since October 5, 2024. Based on unadjusted data, the increase in claims last week was primarily driven by surges in Pennsylvania and Wisconsin.

Data released after the market open showed U.S. job openings fell to their lowest level since 2020, while layoffs edged higher. The number of job openings in the U.S. unexpectedly dropped in December to the lowest level since 2020, and layoffs increased slightly, providing further evidence of softening labor demand. According to data released by the Bureau of Labor Statistics on Thursday, the number of vacant positions fell to 6.547 million from a downwardly revised 6.93 million in November, below the expectations of all economists surveyed by Bloomberg. The reduction in job openings was concentrated in professional and business services, as well as the retail trade sector. The increase in layoffs reflected more cuts in the transportation and warehousing industry. Hiring, while picking up, remained subdued. The decline in vacancies suggests companies are exercising caution in hiring as they assess their workforce size and economic activity. With the number of unemployed individuals slightly exceeding the number of job openings, the Federal Reserve's view that wage growth is not a source of inflationary pressure received further support. The report showed the ratio of job openings to unemployed persons, a key metric watched by Fed officials for labor market balance, held at 0.9 in December. This ratio had peaked at 2-to-1 in 2022. Despite news of some large-scale layoffs, the weekly jobless claims data has not indicated a wave of widespread job cuts. The Job Openings and Labor Turnover Survey (JOLTS) report showed the so-called "quits rate," which measures the proportion of workers who leave their jobs voluntarily each month, was largely unchanged, holding near its lowest level since the pandemic.