Wall Street indexes diverge

The stock market drop on Thursday was driven almost entirely by technology, even as most US companies gained ground. Two out of every three stocks within the S&P 500 rose, but heavy losses among the biggest tech names pulled the index itself down.

• The S&P 500 fell 1.2%, or 93.74 points, to 7,663.43 - its worst day since July
• The Nasdaq composite tumbled 2.6%, losing 694.00 points to 26,008.86
• The Dow Jones Industrial Average added 11.89 points, or less than 0.1%, to 52,867.98
• Nvidia, down 4.4%, was the single strongest force dragging the S&P 500 lower as the largest Wall Street company by value

AI names fall despite earnings

AI stocks have been swinging on worries that their boom may be under threat because of how expensive it has become to borrow money, and that prices shot too high. Several companies reported solid results on Thursday and still fell sharply.

• Lam Research reported summer profit and revenue slightly above analyst expectations, yet its stock tumbled 11.8%
• Meta Platforms lost 7% after reporting stronger revenue for the latest quarter than analysts expected, shedding tens of billions in market value, though its profit fell short
• Alongside those results, Meta told investors it plans a new class of stock whose purpose is funding for its AI investments and other spending
• Tesla's shares slid 3.1%: its summer earnings beat forecasts, but revenue came in weaker than expected
• CoreWeave, which borrows money to buy Nvidia chips it rents out over the cloud, dropped 10.1% amid worries about its debt

Oil and global markets

Brent crude leaped 4% to $113.17 a barrel after touching its highest level in five months, up from less than $97 at the start of the month. Oil rose on uncertainty about when the war with Iran will allow the global energy industry to return to normal.

The losses spread across Asian and European trading:

• South Korea's Kospi tumbled 3.5%
• Hong Kong's Hang Seng dropped 3%
• Japan's Nikkei 225 sank 2.7%
• France's CAC 40 fell 1.4%, one of the continent's sharpest losses, hurt by a jump in yields on French government bonds

French yields have climbed on worries about the government's big debt load and strained budget, and violent protests across France have raised pressure on the government to increase spending.

Bonds and the broader economy

The 10-year Treasury yield tumbled to 4.97% from 5.13% late on Wednesday, and from more than 5.30% earlier this month. Falling yields signaled investors were buying US government bonds in search of something safer to own while AI stocks tumbled.

A separate report showed fewer US workers applied for unemployment benefits last week, suggesting layoffs remain low. The strong economy helped propel the US stock market to a record high earlier this month.

Procter & Gamble, Lockheed Martin and CSX topped profit expectations for the summer, and their stock gains helped limit Thursday's losses. P&G's stock rose 5.6%, and chief executive Shailesh Jejurikar said the company stood by its full-year growth forecasts even as it expected "geopolitical and economic challenges" to continue.

Brent crude was last up 4% at $113.17 a barrel, having touched its highest level in five months, with the report attributing the rise to uncertainty about when the war with Iran will let the global energy industry return to normal.