By John Towfighi, CNN
New York (CNN) — A nervous mood swept through markets Tuesday as stocks stumbled and bitcoin slumped to its lowest level since November 2024.
The Dow was down 360 points, or 0.73%. The broader S&P 500 fell 1.25%, retreating after briefly flirting with a record high. The tech-heavy Nasdaq slumped 2%.
In a sign of the risk-averse mood, bitcoin dropped almost 7% across the past day and fell just below $73,000, hitting its lowest level since President Donald Trump’s victory in the presidential election. Bitcoin then slightly rebounded and traded just below $75,000.
Bitcoin is down roughly 41% since hitting a record high above $126,000 in October. The Trump administration has touted pro-crypto policies, with the president promising to make the United States the “crypto capital of the world.”
But bitcoin — the world’s largest cryptocurrency by market value — has whipsawed in price and struggled to regain ground in recent months amid a series of sell-offs.
While stocks and bitcoin were lower, gold and silver surged higher, extending recent bouts of volatility. Gold futures gained 6.8% to $4,967 a troy ounce. Silver futures soared 10% to roughly $84.78 a troy ounce.
Gold, considered a haven amid uncertainty, has now outpaced bitcoin across the past five years, according to FactSet data.
“[Bitcoin’s] divergence from gold is a sign that most investors currently view gold as the dominant store-of-value asset, especially in periods of currency debasement, geopolitical turmoil and uncertainty over macroeconomic conditions,” Gerry O’Shea, head of global market insights at Hashdex, said in an email.
O’Shea said he expects continued near-term volatility for bitcoin as the crypto industry seeks more regulatory clarity and crypto integrates into mainstream financial infrastructure, but he thinks bitcoin’s appeal will increase.
Stocks were led by declines in shares of many technology and artificial intelligence companies. Tech stalwarts Microsoft (MSFT) and Amazon (AMZN) fell 3.2% and 2.4%, respectively. Nvidia (NVDA), the star of the AI trade, fell 4.1%, weighing on markets.
There have been lingering concerns on Wall Street about just how profitable the AI boom will prove to be, and whether companies’ enormous amounts of spending will ultimately be justified. Microsoft shares dropped 10% on Thursday, erasing nearly $360 billion in market value, after the company reported less growth in cloud sales than expected and increased AI spending.
Wall Street is in the midst of corporate earnings season, and traders are digesting results for the last quarter. Investors are increasingly scrutinizing spending forecasts and focusing on how companies will be able to turn a profit to justify their expenditures.
Meanwhile, shares of software companies also fell amid nerves about developments in AI eating into their business models. Salesforce shares (CRM) were down 8%.
While markets were lower, Walmart shares (WMT) gained 2.1%, lifting the company’s market value above the $1 trillion mark for the first time.
Markets extended their losses and volatility picked up after reports that the United States shot down an Iranian drone that had been approaching a US aircraft carrier.
Wall Street’s fear gauge, the VIX, jumped 19%. The VIX briefly traded at 20 points, a threshold that signals elevated volatility in markets.
Oil futures rose amid escalating US-Iran tensions. Brent crude, the international benchmark, was up 1.9% to $6