Stocks sunk deeper on Thursday as market participants continued to sell off technology shares and digested a series of disappointing labor market data.
The Dow Jones Industrial Average (NYSE: DIA) dropped nearly 600 points to settle at 48,908.72, while the broader market S&P 500 Index (NYSE: SPY) fell 1.2% and the tech-heavy Nasdaq Composite (NASDAQ: QQQ) lost 1.6% to end the session at 6,798.40 and 22,540.58, respectively.
Moving markets, mega-cap tech stock Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) reported better-than-expected fourth-quarter earnings late Wednesday, but the company's plan to increase artificial intelligence related spending this year sent shares lower on Thursday. The search engine giant expects its 2026 capital expenditures to range from $175 billion to $185 billion, with the top end of the forecast being more than double its spending in 2025.
Alphabet and Google CEO Sundar Pichai told analysts on the company's earnings call Wednesday that its Gemini AI app now have more than 750 million monthly active users, about 100 million more users than its previous quarter.
"As we scale, we are getting dramatically more efficient," Pichai said. "We were able to lower Gemini serving unit costs by 78% over 2025 through model optimizations, efficiency and utilization improvements."
Elsewhere for earnings, Qualcomm (NASDAQ: QCOM) shares were lower after the semiconductor maker issued disappointing forward guidance due to the ongoing global memory shortage. The company expects adjusted earnings per share between $2.45 and $2.65 on revenue of $10.2 billion and $11 billion.
Peloton Interactive (NASDAQ: PTON) shares dropped on Thursday after the connected fitness company delivered a weaker-than-expected holiday quarter, which is typically its strongest period of the year, as consumers were unimpressed by its new AI product line and higher subscription prices. Peloton also expects sales to continue to be weak in its current quarter, calling for revenue between $605 million and $625 million.
For the labor market, job openings fell to their lowest level since September 2020 in December, the Bureau of Labor Statistics reported Thursday, totaling a seasonally adjusted 6.54 million for the month. The level of openings as a share of the labor force also declined by 0.3 percentage point to 3.9%, also the lowest since April 2020.
Moreover, the ratio of openings to unemployed workers decreased further in December, falling to 0.87 to 1 -- during the pandemic, the ratio rose to 2 to 1.
Separately, initial jobless claims rose to a seasonally adjusted total of 231,000 for the week ended Jan. 31, the Labor Department reported on Thursday, rising 22,000 from the previous period. Meanwhile, continuing unemployment claims, which trial a week behind, increased by 25,000 to 1.84 million.
Rounding off labor market data, layoffs reached their highest January total since 2009 last month, according to a report from outplacement firm Challenger, Gray & Christmas on Thursday. U.S. employers announced 108,435 layoffs from the month, up 118% from the same period a year ago and 205% from December 2025.
"Generally, we see a high number of job cuts in the first quarter, but this is a high total for January, said Andy Challenger, chief revenue officer at the firm, in a statement. "It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026."
Looking ahead, most investor attention will turn to Amazon's (NASDAQ: AMZN) quarterly earnings on Friday.