Tech Stocks Tumble Amid AI Spending Concerns and Rising Oil Prices

Wall Street indices ended lower with Nasdaq dropping over 2% amid concerns over heavy AI spending and inflation driven by soaring oil prices. Middle East tensions and the first reports from major tech companies contributed to market volatility. The Federal Reserve's upcoming policy meeting heightens inflation worries.

The stock market faced a blow on Thursday as Wall Street indexes finished the day deeply in the red. The Nasdaq Composite sank more than 2%, marking notable concerns over hefty AI investments by major technology firms. Surging oil prices further fanned the flames of inflation anxiety, subsequently driving up bond yields.

Broader market losses followed disappointing second-quarter earnings from tech giants like Alphabet and Tesla, the first among the so-called 'Magnificent Seven' corporations to release their results this season. Adding to the stress, Brent crude oil futures breached $100 a barrel for the first time since May, while U.S. oil futures crossed $90.

Geopolitical tensions in the Middle East, including renewed U.S. airstrikes on Iran and regional hostilities, exacerbated worries over global oil supplies. U.S. President Donald Trump issued a stern warning of 'major military punishment' for Iran and its allies after Yemen's Houthis targeted Saudi oil tankers, further inflating oil prices and heightening talks of inflation ahead of the Federal Reserve's imminent policy meeting.