Alphabet and Tesla Rout Drove Nasdaq Down 2.15%

U.S. stocks declined sharply as heavy losses in Alphabet and Tesla weighed on the major indexes. The Nasdaq Composite fell 2.15%, the S&P 500 lost 1.21% and the Dow Jones Industrial Average declined 0.97%.

Alphabet shares dropped about 7% as investors focused on the company’s increased artificial intelligence capital spending. Tesla plunged 14.5% following weaker-than-expected profit and negative free cash flow.

The declines in two heavily weighted megacap companies contributed to Wall Street’s worst session in a month. The reaction also demonstrated growing investor resistance to high AI spending and elevated technology valuations, making future earnings and spending updates especially important for technology companies and the broader market.

The index declines, the two companies’ share-price moves and the stated earnings-related concerns are confirmed by the event package. What remains uncertain is whether the selloff will persist, whether investor resistance to AI capital expenditure will broaden across the technology sector, and how quickly companies can demonstrate returns from that spending.