Nasdaq falls 2.6% in worst session since June as chips, Meta slide
Key Facts
The Nasdaq Composite closed down 2.6% in the October 22, 2026 session as a selloff tied to AI company earnings spread to chipmakers and technology stocks. The index lost 694 points to finish at 26,008.86, according to the Associated Press, coinciding with sharp losses in Meta and semiconductor shares. Reuters described the decline as the Nasdaq's steepest single-session fall since early June, putting the session's losses at the forefront of daily declines over that period. Losses also hit the S&P index, which closed down 93.74 points, or 1.2%, at 7,663.43, according to the Associated Press. Meta was among the stocks posting sharp declines, falling 7.0%, according to Reuters, as it reported results showing revenue growth and negative free cash flow.
In the chip sector, the Philadelphia Semiconductor Index fell 6.7%, according to Reuters, exceeding the Nasdaq Composite's percentage decline in the same session. It was the index's biggest daily percentage loss since June 23, making the latest decline its steepest since that date. Among individual stocks, Nvidia fell 4.4% during trading, according to the Associated Press, as part of the wave of losses hitting chipmakers. Lam Research posted a larger decline of 11.8%, according to the agency, outpacing the sector index's fall. Beyond those semiconductor stocks, Tesla also fell 3.1%, according to Reuters, as the selloff spread to other technology names.
Meta's results showed revenue for the third quarter of 2026 rose to $64.60 billion, up 26% from a year earlier, according to the Associated Press. Revenue in the third quarter of the previous year was $51.24 billion, the comparison period underlying the reported growth rate. On investment, the company expects capital spending of between $135 billion and $145 billion during 2026, according to the agency, alongside its reported quarterly results. Meta recorded negative free cash flow of about $2.1 billion in the third quarter of 2026, according to Investing, alongside the increase in revenue. Chief Financial Officer Susan Li said, according to the website, that the company's AI investments were already generating "significant incremental advertising revenue." The results thus combined the advertising business growth described by the chief financial officer with free cash flow below zero, while the projected capital spending range covers the full year.
As background to fund-based exposure to Nasdaq stocks, QQQ tracks an index comprising the 100 largest nonfinancial companies listed on the Nasdaq exchange, according to Invesco. The companies represented in the index are defined by their size and exchange listing, with financial companies excluded from its scope. Invesco classifies the fund as "non-diversified," according to its official description of the investment. The company says the fund "may experience greater volatility than a more diversified investment," a warning accompanying its description of the fund's characteristics. Invesco's description thus combines the breadth of companies the index seeks to represent with the fund's investment classification, which flags the potential for greater volatility.
In the bond market, the yield on 10-year U.S. Treasury notes fell to 4.97%, compared with 5.13% late in Wednesday's session, according to the Associated Press. The market moves followed the Federal Reserve's September decision to raise its target interest rate range by a quarter of a percentage point. The U.S. central bank set the new range at 3.75%–4%, according to the decision statement, which kept monetary policy within a target interest rate range. The Fed said in the same statement that "inflation remains elevated," outlining one element of the economic backdrop to the September decision. The Federal Open Market Committee holds its next meeting on October 27 and 28, 2026, according to the central bank's official schedule.