The S&P 500 also slumped 68.25 points (1%) to 6,822.34 while the narrower Dow posted a more modest loss, slipping 109.88 points (0.2%) to 47,522.12.
The weakness that emerged on Wall Street came amid a negative reaction to earnings news from tech giants Meta Platforms (META) and Microsoft (MSFT). Facebook parent Meta plunged by 11.3% to a five-month closing low after reporting better than expected third quarter results but forecasting an increase in AI spending. Microsoft also tumbled by 2.9% after reporting fiscal first quarter results that exceeded estimates but also saying capital spending growth will accelerate this fiscal year.
Alphabet (GOOGL) jumped by 2.5% after the Google parent reported third quarter results that beat expectations on both the top and bottom lines. Drug giant Eli Lilly (LLY) also surged by 3.8% after reporting better than expected third quarter results and boosting is full-year revenue guidance.
Traders largely shrugged off the seemingly positive outcome of President Donald Trump’s meeting with Chinese counterpart Xi Jinping, where the U.S. agreed to cut fentanyl-linked tariffs on China from 20% to 10%, and China agreed to resume U.S. soybean purchases. Additionally, China will suspend new export controls on rare earths, while the U.S. will pause its 50% penetration rule on export controls.
Software stocks moved sharply lower amid the slump by Microsoft, dragging the Dow Jones U.S. Software Index down by 2.2%. Telecom stocks were considerably weak, as reflected by the 2.0% loss posted by the NYSE Arca North American Telecom Index. Steel, computer hardware, retail and semiconductor stocks also came under pressure on the day while gold networking and pharmaceutical stocks turned in strong performances.
Asia-Pacific stocks turned in a mixed performance. Japan's Nikkei 225 Index closed marginally higher and South Korea's Kospi Inched up by 0.1%, while Hong Kong's Hang Seng Index dipped by 0.2%. The major European markets showed a lack of direction over the course of the session while the French CAC 40 Index slid by 0.5%, the U.K.'s FTSE 100 Index and the German DAX Index both ended the day roughly flat.
In the bond market, treasuries extended the notable downward move seen late in the previous session. As a result, the yield on the benchmark ten-year note which moves opposite of its price, climbed 3.5 bps to 4.09%.