AI Worries and Oil Prices Send Wall Street into Free Fall

Wall Street indices fell on Thursday as concerns about heavy AI spending and inflation worries weighed on investors. The S&P 500 dropped more than 1%, with losses broad-based after Alphabet and Tesla reported disappointing earnings results.

The tech giants were among the first of the 'Magnificent Seven' companies to report second-quarter results, and their shares declined sharply as a result. Alphabet's stock sank 7% due in part to higher spending plans and cash burn, while Tesla's shares plummeted 14.5% after reporting negative free cash flow.

Oil prices also contributed to the decline, with Brent crude futures settling above $100 a barrel for the first time since May. This surge in oil prices fanned worries about global oil supplies and prompted concerns about inflation ahead of the Federal Reserve's policy meeting next week.