Nasdaq falls 1.5% Thursday morning, Meta drops 5.8% after quarterly results

Key Facts

The Nasdaq Composite fell 1.5% in morning trading on Thursday, October 22, 2026, according to an Associated Press update at 10 a.m. New York time. Meta shares dropped 5.8% after the company reported quarterly results, alongside the index's decline. Thursday's losses followed gains for the Nasdaq on October 21, when it closed at 26,702.86. The index gained 278.04 points, or 1.1%, in that session, according to the agency. Morning trading thus reversed the direction of the previous close, as Meta's results combined revenue growth with earnings hit by a legal provision, alongside revised capital spending guidance.

Meta's revenue rose 26% year on year in the third quarter of 2026 to $64.60 billion, according to the Associated Press. But the company's earnings were hit by a $9.89 billion legal provision during the quarter, according to Investing.com. The website linked the provision to a settlement of lawsuits concerning teenage mental health with attorneys general in 52 states. On spending, the company narrowed its 2026 capital expenditure forecast to between $135 billion and $145 billion, according to the Associated Press. The previous range was $130 billion to $145 billion, meaning the lower end was raised while the upper end remained unchanged. The agency reported that the estimate was now "$135 billion to $145 billion, compared with a previous estimate of between $130 billion and $145 billion."

In Tesla's results, third-quarter 2026 revenue totaled about $28,046 million, compared with $28,095 million in the corresponding quarter of 2025, according to the company's investor update. Revenue thus declined slightly from the year-earlier period, while operating profit fell more sharply. Operating profit dropped 56% year on year to $718 million. The results table showed operating profit of $1,624 million in the third quarter of the previous year. By contrast, free cash flow turned positive at $1,531 million in the third quarter of 2026. That followed negative free cash flow of $1,092 million in the second quarter, leaving the results showing a year-on-year decline in operating profit alongside improved cash flow from the previous quarter.

In the U.S. labor market, the Labor Department's report released on October 22 showed seasonally adjusted initial jobless claims fell to 194,000 for the week ended October 17, 2026. Claims declined by 6,000 from the revised reading of 200,000 for the week ended October 10. The four-week moving average of claims also fell to 197,750 in the week ended October 17. The previous revised average was 198,750 for the week ended October 10. Meanwhile, the seasonally adjusted number of people continuing to receive unemployment benefits rose to 1,728,000. The weekly increase was 25,000 in the week ended October 10, with continuing claims rising alongside a decline in initial claims in the more recent period.

Looking ahead, Meta forecast revenue of between $73.00 billion and $76.00 billion in the fourth quarter of 2026, according to Investing.com. The entire projected revenue range is above third-quarter revenue of $64.60 billion. The final-quarter forecast coincides with the company's increase in the lower end of its expected capital spending for the same year, according to the range reported by the Associated Press. On the monetary policy calendar, the Federal Reserve holds its next meeting on October 27–28, 2026, according to its official calendar. The meeting follows the release of the jobless claims report and corporate results, and concludes on October 28.