Nasdaq falls 2.6% in worst session since June as AI funding concerns resurface

Key Facts

The Nasdaq Composite fell 2.6% on Thursday, October 22, 2026, as concerns resurfaced over the scale of capital spending on artificial intelligence following Meta's results and plans to finance those investments, according to Reuters. The index posted its biggest daily percentage decline since early June, with technology and semiconductor stocks bearing the brunt of the selling. Losses extended to the S&P index, which fell 1.2%, marking its worst daily performance since July, according to the Associated Press. By contrast, the Dow Jones ended the session marginally higher, according to Reuters, diverging from the sharp declines in technology stocks. Despite Thursday's losses, the Nasdaq remained up 11.9% for the year through the close, according to the Associated Press.

At the heart of the selloff, Meta shares fell 7% after the company reported quarterly results, according to Reuters, bringing the cost of artificial intelligence investments and how to finance them back into market focus. The company recorded its first cash outflow in more than a decade because of its AI-related spending, a financial shift that accompanied the earnings announcement. Meta also announced a plan to issue shares to raise capital to fund spending on the technology. Reuters described the planned issuance as "non-voting shares," part of the company's plan to finance those expenditures. The developments surrounding Meta combined the impact of spending on its cash flows with the need to raise capital, the two central concerns its results and financing plans brought back to the market.

Semiconductor stocks were among the hardest hit during the session, with the sector index falling 6.7%, according to Reuters. The selloff included Intel and SanDisk, whose shares each fell more than 8% in Thursday's trading. AMD and Marvell shares also dropped more than 8% each, adding to losses across chip companies. In other corporate results, Tesla generated positive free cash flow during the quarter, defying expectations, according to the agency. Still, its shares fell following the results despite the positive free cash flow surprise, with the decline coinciding with pressure on technology stocks during the session.

Outside the stock market, U.S. Treasuries rose as investors turned to government debt during the selloff, according to Reuters. Bond yields fell as prices rose, while the equity decline increased their appeal to investors. The agency described the shift as bolstering the appeal of government debt as a "safe haven" as technology stocks came under heavy pressure. In energy markets, Houthi attacks in Saudi Arabia pushed oil prices higher, according to Reuters, with crude gains coinciding with the rally in Treasuries. The attacks raised concerns about further disruptions to energy supplies, adding a supply-related development to the backdrop of a session in which AI spending concerns dominated the technology sector.

The moves come ahead of the Federal Reserve's next meeting, scheduled for October 27 and 28, according to the U.S. central bank's official calendar. The meeting includes a press conference and will be followed by official economic releases in the subsequent days. On October 29, the U.S. Bureau of Economic Analysis will release its advance estimate of gross domestic product for the third quarter of 2026 at 8:30 a.m., according to the bureau's schedule. At the same time, the bureau will publish September personal income and outlays data alongside the initial growth estimates. The U.S. Bureau of Labor Statistics will then release Employment Cost Index data for the third quarter of 2026 on October 30 at 08:30 a.m. Eastern Time, according to its official release schedule.