US Stock Market Crashes As Oil Boils Above 101: Dow Jones, Nasdaq Fall 500-600 Pts; Tech Stocks Drag

On July 23, the Dow Jones Industrial Average, or DJIA crashed by 506.93 points, or 0.97%, to close at 51,711.65. But it was the Nasdaq Composite that took the worst hit with a 553.21-point decline, or 2.15%, to end at 25,137.69.

Also, the S&P 500 index declined by 90.66 points or 1.21% to close at 7,408.30.

"Earnings were mostly positive for Alphabet and somewhat disappointing for Tesla. Alphabet raised spending forecasts and Tesla confirmed that 2026 remains a "massive" spending year, giving chip firms a lift," said Charles Schwab's Head Trading & Derivatives Strategist, Joe Mazzola.

However, the two earnings were not enough to stir buying interest rates. Mazzola added, "It wasn't enough to overcome geopolitical headwinds, and worries intensified in the bond market, where the benchmark 10-year note yield posted a new 2026 high of 4.71%. In the background, chances of a Federal Reserve rate hike next week keep climbing as oil raises inflation concerns, reaching 38% according to the CME FedWatch Tool."

Among stocks, Alphabet fell 6.9% after it raised its capital spending forecast, while Tesla nosedived by 14.5% on a dip in profitability despite strong EV deliveries. Other tech stocks were also in deep red, with Nvidia down by 2%, Microsoft tumbling 2.2%, Meta tanking 3.4%, Amazon plummeting by 5%, Broadcom down 1.1%, and Oracle, which declined nearly 5%.

Also, heavyweight non-tech stocks like Goldman Sachs shed 2.1%, while Visa slipped 0.5%. Comcast recorded nearly 7% downside after quarterly profits dropped. On the contrary, RTX zoomed 7.3% after beating expectations.

Crude Oil Price + Treasury Yields + Dollar

Oil prices skyrocketed by 6-7% overnight. On Thursday, crude oil price crossed $101 per barrel mark and US WTI Crude climbed over $92 per barrel mark. This is the highest level of crude oil prices since May.

US President Trump warned that the US would hold Iran responsible for any future Houthi attacks on commercial shipping in the Red Sea, threatening Tehran and the Yemen-based militants with "major military punishment." He also said he was "considering a massive attack" against Iran. The comments followed Houthi attacks on two Saudi oil tankers in the Red Sea, which the group said were intended to enforce a newly announced blockade of Saudi ports. Oil prices have now climbed more than 30% from the pre-conflict levels seen earlier this month, as per Trading Economics.

Furthermore, the US dollar jumped to a three-week high at 101.44. While the US 10-year treasury yield soared to 4.71%, the highest level since January 2025.

Will Fed Hike Rates In July Or September Policy?

The US Federal Reserve is scheduled to begin its July monetary policy from July 28th to July 29th.

As per the Charles Schwab report, chances of a hike next week have been all over the map, rising to 33% by late Wednesday from 11% a week ago, according to the CME FedWatch Tool. Rate hike chances appear to be tracking oil prices. Oil climbed relentlessly this week and is now above $86 per barrel as Middle East clashes and threats continued.

Looking ahead, Schwab's note added, traders see much higher chances of a September Fed rate hike, and peg chances of at least one hike before year-end at 90%. The Fed will likely stay on hold next week at 3.5% to 3.75%.

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