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Nasdaq falls 1%; Salesforce shares weigh on tech

STORY: U.S. stocks fell on Thursday, led by declines in technology shares after a disappointing Salesforce forecast.

The Dow dropped almost nine-tenths of a percent, the S&P 500 shed six-tenths and the tech-heavy Nasdaq fell more than one percent.

Salesforce shares plunged more than 19% after its lowest-ever quarterly revenue growth forecast.

That has raised fears rival AI offerings and high interest rates are hampering demand at the cloud-based firm.

Bill Whelan is partner and portfolio manager at Clough Capital Partners.

"I think there's a lot of attention, of course, on Salesforce.com. And one of the data points that's sticking out, is just kind of catching people's attention is, is the guidance for single digit growth, which is, you know, a deceleration over their historical trend line. We're not involved in that name, for what it's worth, but we do have, as we think about that broader AI theme, we do have concerns about how software will play into that and monetize that over the next two years and think there are certainly better ways to play that theme."

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Among the day's gainers, shares of Gap, which closed up 4%, soared more than 21% in after-hours trading after the retailer raised its annual sales forecast and its first-quarter results beat market expectations.

On the flip side, department-store chain Kohl's slumped more than 22.5% after cutting its annual sales and profit forecasts.

HP jumped nearly 17% after it posted better-than-expected second-quarter revenue.

And Tesla shares rose about 1.5% after Reuters reported the company was preparing to register its 'Full Self-Driving' software in China.

In economic data, a Commerce Department report showed the economy grew slower in the first quarter than previously estimated.

That's after downward revisions to consumer spending - and a key measure of inflation ticked lower ahead of Friday's personal consumption expenditure report for April, the preferred inflation gauge of the Federal Reserve.