Nasdaq falls 2.1% at close, ends week down 4.5% as technology stocks slide
Key Facts
The Nasdaq Composite closed down 2.1% on Friday, October 16, 2026, as technology selling broadened and investors worried about financing artificial intelligence expansion, according to the Associated Press. The index lost 572.99 points to close at 26,140.03, ending a week marked by pressure following the release of U.S. inflation data. Its loss for the week ended on that date totaled 1,226.14 points, a decline of 4.5%. The selloff affected most technology stocks in the S&P 500, with only 7 of the sector's 75 stocks spared on Friday. The losses came amid concerns about AI companies' ability to keep borrowing and spending as bond yields rose.
Among technology stocks, Broadcom fell 4.5% during Friday's session, while Intel lost 5.8%, according to the Associated Press. Intel's decline exceeded Broadcom's in the same session amid the broad selloff across the sector. The agency linked investors' concerns to AI companies' reliance on borrowing to expand, putting spending finance at the center of concerns as bond yields rose. Describing how those expansions were financed, it said the companies had "relied on debt markets." The concerns centered on their continued ability to raise debt financing and sustain spending as yields rose alongside pressure on AI and technology stocks.
The selloff followed a U.S. inflation surprise, with the Bureau of Labor Statistics reporting that the seasonally adjusted Consumer Price Index rose 0.6% month on month in September. The increase accelerated from August, when the index rose 0.4%, according to the bureau's official release. Annual headline inflation reached 3.7% in September, exceeding the 3.6% economists had expected, according to the Associated Press. Gasoline was among the main drivers of the monthly increase, with prices rising 9.1% in September and accounting for more than half of the overall index's increase, according to the Bureau of Labor Statistics. The core price index, which excludes food and energy, rose 0.3% month on month, compared with the larger increase in the index that includes those components.
The inflation report began weighing on stocks on Wednesday, October 14, when the Nasdaq Composite fell 1.9%, according to the Associated Press's coverage of that day's trading. AI stocks led the decline following the report, ahead of the technology selloff at the end of the week. Traders increased their bets on U.S. interest rate increases after the data, according to the agency. That coincided with a jump in short-term U.S. Treasury yields, as the repricing of interest rate expectations accompanied stock losses in the same session. Describing the shift, the Associated Press said "traders raised their expectations for future interest rate increases," as the annual inflation reading exceeded economists' forecasts.
The Dow Jones, by contrast, ended the same week higher, diverging from the Nasdaq Composite's losses, according to the Associated Press. The Dow Jones gained 347.46 points, or 0.7%, for the week despite the pressure on technology stocks. Across sectors, energy stocks showed relative resilience during Friday's session, while selling spread to most technology stocks. Exxon rose 2.5% in that session, moving in the opposite direction to Broadcom and Intel. The week thus ended with a weekly gain for the Dow Jones and a rise for Exxon in the energy sector, against Nasdaq losses and widespread selling in technology stocks, according to the agency's trading summary.
The next milestone for U.S. monetary policy is the Federal Open Market Committee meeting scheduled for October 27–28, 2026, according to the Federal Reserve's published calendar. The meeting will be followed by the October consumer price report, scheduled for November 10, 2026, according to the Bureau of Labor Statistics. Under those dates, the committee meeting precedes the release of the October inflation reading. The committee's sessions come after prices accelerated in September and traders' expectations shifted toward future interest rate increases. The next Consumer Price Index release will cover the month following the September reading that accompanied pressure on AI stocks and a rise in short-term Treasury yields.