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Snowflake surges on upbeat 2026 product revenue forecast

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Salesforce ( CRM ) falls on downbeat annual revenue forecast

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US weekly jobless claims rise more than expected

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S&P 500 -1.59%, Nasdaq -2.78%, Dow -0.45%

(Updates with details after end of trading)

By Noel Randewich and Johann M Cherian

Feb 26 (Reuters) - The S&P 500 and Nasdaq ended sharply

lower on Thursday, weighed down by a slump in chipmaker Nvidia ( NVDA )

after its quarterly report failed to rekindle Wall Street's AI

rally, while investors focused on data pointing to a cooling

U.S. economy.

Nvidia ( NVDA ) tumbled 8.5%, evaporating $274 billion in

stock market value, after the Silicon Valley company gave a

weaker-than-expected quarterly forecast for gross margin that

overshadowed an upbeat revenue outlook.

Chipmakers Broadcom dropped more than 7% and

Advanced Micro Devices ( AMD ) lost 5%, pulling the Philadelphia

chip index down 6.1%.

The launch of low-cost artificial intelligence models from

China's DeepSeek in January has cooled Wall Street's AI rally,

while an analyst report this week suggesting Microsoft was

scrapping some data center leases also raised concerns of AI

overcapacity.

With Nvidia's ( NVDA ) results and outlook failing to impress

investors with high expectations, its stock has now fallen

almost 20% from its record-high close on January 6.

"Nvidia's ( NVDA ) earnings were good, but not like the blockbuster

earnings that they've been delivering for a while," said Scott

Welch, chief investment officer at Certuity.

The S&P 500 dropped 1.59% to end the session at 5,861.57

points.

The Nasdaq tumbled 2.78% to 18,544.42 points, while the Dow

Jones Industrial Average declined 0.45% to 43,239.50 points.

It was the Nasdaq's deepest one-day percentage drop in a

month.

Volume on U.S. exchanges was heavy, with 15.8 billion shares

traded, compared to an average of 15.3 billion shares over the

previous 20 sessions.

While tech stocks dipped, other parts of the market saw

gains. The S&P energy index rose 0.5%, tracking a jump

in crude prices after U.S. President Donald Trump canceled oil

major Chevron's license to operate in Venezuela.

Also weighing on investor sentiment, data showed jobless

claims jumped more than expected in the previous week, while

another report reiterated that economic growth slowed in the

fourth quarter.

Thursday's data follows reports over the past week that

suggested the economy was stalling, fears of which have also put

all three major U.S. indexes on track for monthly declines.

"We're now seeing inflation fears give way to growth fears,

and that, in turn, is causing stocks to go, at best, sideways,

and potentially even down," said Michael Green, chief strategist

at Simplify Asset Management in Philadelphia.

On the trade front, Trump floated a 25% reciprocal tariff on

European cars and other goods. He also said tariffs on Mexico

and Canada will go into effect on Tuesday.

Investors are focused on monthly Personal Consumption

Expenditure data, which is the Federal Reserve's preferred

inflation gauge, due on Friday.

Traders expect the Fed to lower borrowing costs by at least

50 basis points by December, according to data compiled by LSEG.

Shares of Salesforce ( CRM ) dropped 4% after the business

software seller forecast fiscal 2026 revenue below expectations.

Snowflake surged 4.5% after the data analytics

provider forecast fiscal 2026 product revenue above estimates.

Viatris ( VTRS ) plummeted 15% after the drugmaker forecast

downbeat annual results.

Warner Bros Discovery ( WBD ) jumped 4.8% after saying it

expects streaming profits to double this year.

Declining stocks outnumbered rising ones within the S&P 500

by a 1.7-to-one ratio.

The S&P 500 posted 20 new highs and 13 new lows; the Nasdaq

recorded 42 new highs and 269 new lows.