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Why is the stock market down today? Dow, S&P 500, Nasdaq fall as oil, yields and earnings pressure stocks
US stocks fell as oil prices and Treasury yields rose, while Dow, S&P 500 and Nasdaq faced pressure from AI spending, earnings and jobs data.
US stocks fell on Thursday as investors became more careful. The Dow Jones Industrial Average fell 0.6%. The S&P 500 dropped 0.2%, while the Nasdaq Composite fell 0.1%. Investors were watching several key things. These included higher Treasury yields, rising oil prices, company earnings and new labour market data.
The Dow’s fall put its record winning streak at risk. The blue-chip index had been on a record-breaking run, but Thursday’s decline raised the possibility that the streak could end. Investors were also taking a closer look at whether strong company earnings were enough to support stock prices at current valuations.
The market started the day with little movement before turning weaker. The S&P 500 was almost flat shortly after opening bell, while the Nasdaq was down 0.3%. The Dow was initially up about 100 points, or 0.2%, before later falling into negative territory, according to CNBC.
Oil prices rise to $81
Rising oil prices added another layer of pressure for investors. Global oil prices rose to around $81 a barrel on Thursday as worries about the Middle East continued to affect markets, according to Yahoo Finance.
Investors were closely watching the Strait of Hormuz. Iran said it had reached an agreement with Oman for a temporary shipping route through the strait. Iranian Foreign Ministry spokesperson Esmail Baghaei said the deal would move forward if some third parties did not block it.
Strait of Hormuz deal in focus
The possible Hormuz deal did not immediately remove market concerns. A temporary agreement could help shipping through the important oil route, but investors were still waiting for details about how the arrangement would work. An Iranian government official told MS NOW that ships would not have to pay fees or tolls under the temporary agreement, according to CNBC.
Markets have become cautious after several earlier hopes for a Middle East deal failed to produce a lasting solution. Deutsche Bank strategist Jim Reid said investors were now focused less on whether an agreement could happen and more on the final terms, including whether Iran could eventually charge tolls on ships using the Strait of Hormuz.
Treasury yields add pressure
Higher oil prices also pushed Treasury yields higher. The 30-year Treasury yield rose to 5.21%, while the 10-year Treasury yield climbed to 4.67%, according to Yahoo Finance. Higher yields can make stocks less attractive because investors can get better returns from government bonds.
AI spending worries investors
Technology stocks remained under pressure as investors worried about high AI spending. Investors are watching how much money companies are spending on artificial intelligence and whether these investments will bring enough sales and profits.
High stock prices are also making investors more careful. Some AI stocks have fallen sharply after weak results or forecasts. This shows that investors are quickly selling when a company’s growth or future outlook is not as strong as expected.
Sandisk and Western Digital stocks fall
Sandisk shares fell about 5% after the company reported weak results that disappointed investors, according to CNBC.
Western Digital shares also fell sharply. The stock dropped about 11% after the company gave a weak forecast. Its fourth-quarter results were better than expected, but investors were more worried about its outlook for the first quarter.
Some of these sharp stock moves may also be linked to profit-taking. Cboe’s head of retail expansion and alternative investment products, JJ Kinahan, said markets appeared to be taking a break after a very active period driven by earnings. He also said strong profits and sales do not always push stocks higher when company guidance is weak, via CNBC.
Sandisk and Western Digital had already delivered huge gains over the past year. Sandisk had jumped about 3,000% over 12 months, while Western Digital had gained more than 500%. That makes it easier for investors to lock in profits when earnings or forecasts disappoint.
SpaceX stock gives up early gains
SpaceX shares also gave up most of their early gains. The stock initially moved higher but later surrendered much of the increase as a lockup period expired. The expiration allowed some insiders to sell their shares, according to Yahoo Finance.
Also read: SpaceX stock faces pressure as 911.5 million shares unlock after record IPO
LegalZoom stock falls after JPMorgan downgrade
LegalZoom shares came under pressure after a JPMorgan downgrade. JPMorgan lowered the legal-services technology company’s rating to neutral from overweight as the company faces weaker online traffic, partly because artificial intelligence is changing how search results are delivered, according to CNBC. LegalZoom has also reduced its 2026 revenue growth forecast. The company cut its expected revenue growth to 6% from 8% in its latest earnings report.
JPMorgan said Google-driven traffic to LegalZoom has slowed sharply. JPMorgan analyst Ella Smith said the company now expects low-single-digit revenue growth in the second half of the year because of a structural problem with its main search channel, according to CNBC. Zillow shares dropped more than 12% after Evercore ISI downgraded the stock. The Wall Street firm cut its rating from outperform to “in line” and reduced its price target to $40 from $80.
Zillow stock drops 12%
Evercore ISI pointed to weaker fundamentals and a soft housing market. The firm said Zillow’s second-quarter results beat expectations, but its second-half outlook was weak. Analysts also highlighted the company’s change in its monetization strategy.
Peloton stock falls after sales warning
Peloton shares fell more than 14% after the company warned about sales. The fitness company expects sales to decline in the coming fiscal year. It also pointed to higher prices for its hardware and subscription plans. Peloton still delivered some positive numbers in its latest quarter. The company matched earnings expectations and beat the revenue estimate in an LSEG analyst survey. It also expects gross margin and adjusted earnings to improve compared with the previous year.
Burger King owner beats earnings estimates
Restaurant Brands International delivered better-than-expected earnings. The owner of Burger King reported earnings per share of $1.07, above the $1.03 expected by analysts. Revenue came in at $2.52 billion, in line with expectations. Burger King was the strongest performer among RBI’s major brands. Same-store sales at Burger King increased 8.5%, showing continued improvement in the chain’s business. Tim Hortons and Popeyes, however, did not perform as strongly, according to CNBC.
US jobless claims remain low
US labour data offered a mixed but generally steady picture. Initial jobless claims came in at 199,000 for the week ended August 1, up 1,000 from the previous week but below the 204,000 expected by economists, according to the US Labor Department. Layoffs also dropped sharply in July.
A report from Challenger, Gray & Christmas showed that announced layoffs fell to their lowest level in two years, according to Yahoo Finance. Productivity was stronger than expected in the second quarter. Labour productivity increased 1.4% from April through June, compared with 0.8% growth in the previous quarter. The result was also better than the 0.6% forecast, according to the Bureau of Labor Statistics.
Labour costs rose less than economists expected. Unit labour costs increased 1.3%, below the 2.1% forecast. The figure measures hourly compensation after taking productivity into account, according to the Bureau of Labor Statistics.
July jobs report is next
The labour data comes just before the key July jobs report. Thursday’s jobless claims and layoffs data gave investors a fresh look at the US labour market ahead of Friday’s July employment report, according to Yahoo Finance. The bigger market picture remains focused on several risks at once. Investors are balancing the direction of oil prices, Treasury yields, Middle East developments, company earnings, AI spending and the health of the US labour market.
The combination has made traders more cautious even as parts of the economy continue to show strength. For Thursday’s session, the main message was that market breadth was weakening. The Dow, S&P 500 and Nasdaq were all lower, while several high-profile companies suffered sharp post-earnings declines. Rising oil prices and Treasury yields added to the pressure, keeping investors on edge.
