Nasdaq Falls 2.6% as AI Spending Concerns Mount and Oil Rises

Key Facts

The Nasdaq Composite fell 2.6% to 26,008.86 points on October 22, its biggest daily decline since early June, while the S&P 500 lost 93.74 points, or 1.2%, to close at 7,663.43 points, its worst session since July. The losses reflected concentrated pressure on technology stocks, as concerns resurfaced about the scale of AI-related capital spending and the viability of the returns it could generate. By contrast, the Dow Jones Industrial Average rose 11.89 points, less than 0.1%, to 52,867.98 points. The Associated Press said weakness in technology stocks “obscured the strength of the rest of the market,” as most U.S. stocks rose. Treasury yields also fell as investors moved into assets treated as safe havens.

Semiconductor stocks were at the center of the selloff; the sector index fell 6.7%, its biggest daily drop since June 23, according to Reuters. The move matters because chipmakers are among the biggest beneficiaries of AI spending, which has come under market scrutiny. Nvidia fell 4.4%, and the Associated Press described it as the single stock that weighed most heavily on the S&P 500 during the session. CoreWeave also dropped 10.1% amid concerns about the company’s debt, which it uses to finance purchases of Nvidia chips for rental through cloud computing services. Together, these moves made technology’s impact on the indexes deeper than the breadth of gains across other stocks.

Large-cap stocks moved in different directions as companies reported results and spending updates. Meta fell 7% after reporting third-quarter results; although revenue beat analysts’ expectations, the company’s announcement that it would issue nonvoting shares raised concerns about its capital commitments and AI spending, Reuters reported. Tesla fell 3.1% after the company cut its spending forecast, while SpaceX shares ended the session down 9%. Reuters linked the broader concern to questions about whether future returns on AI infrastructure investments could justify the scale of spending. The stock reactions offered a picture of investors’ sensitivity to the balance between capital expansion and the results companies report.

Alongside technology concerns, oil rose on supply risks in the Middle East. Reuters said Houthi attacks in Saudi Arabia raised fears of further disruption to energy supplies and pushed Brent crude up nearly 4%. The Associated Press estimated that Brent rose 4% in the same session, noting that its price had climbed from below $97 a barrel at the start of October amid uncertainty about a return to normal supplies. Rising oil added a geopolitical factor to a session led by concerns about AI spending, but sources linked the energy shock to supply risks and did not establish that it caused the stock market decline or increased inflationary pressure. Technology-sector pressure thus coincided with higher crude prices, while money moved into Treasuries.

Investors’ shift into Treasuries was reflected in falling yields. The 10-year U.S. Treasury yield fell 19.3 basis points to 4.953% on October 22, its biggest daily drop since March 10, 2023, according to Reuters. The Associated Press put the yield at 4.97%, compared with 5.13% late Wednesday and more than 5.30% earlier in the month, and linked the decline to investors’ demand for safe havens. The figures indicate that the session was not a broad selloff in U.S. assets: indexes weighted toward technology fell, while the Dow posted a modest gain and most stocks rose. The S&P 500 closed at 7,663.43 points, compared with 7,757.17 points in the previous session.

For the week ending October 22, the S&P 500 remained up 0.1%, the Dow rose 1.7%, and the Nasdaq was down 0.5% through Thursday’s close, according to the Associated Press. Since the start of 2026, the S&P 500 had gained about 11.9% through that close. In Asia on Friday, the Nikkei fell 1.7% and the Kospi 2.4%, while the Hang Seng rose 0.2%. These moves place the Wall Street session within a broader picture of diverging markets, with losses in U.S. technology stocks the clearest driver of the session. The next U.S. events are the Federal Open Market Committee meeting on October 27 and 28 and the press conference on October 28, followed by the advance estimate of third-quarter GDP on October 29 at 8:30 a.m.