Nasdaq drops over 2% as AI spending worries hit tech stocks
The Nasdaq fell more than 2% as investors questioned the returns on heavy AI spending, while Brent hovered near a five-month high, Reuters reported.
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what happened
The tech-heavy Nasdaq lost more than 2% on Thursday as growth stocks weakened after earnings from Tesla and Meta did little to ease concerns about AI costs. Meta shares slid 5.2% after the company unveiled non-voting shares to help finance its expensive AI expansion, despite quarterly revenue above forecasts. The Philadelphia semiconductor index dropped 5.6% to its lowest level since July 29.
Brent crude stayed near its five-month high after fresh Houthi attacks in Saudi Arabia raised fears of supply disruptions and a wider Middle East conflict. Reuters reported that the S&P 500 fell 1.10%, while the Dow Jones was roughly flat. The 10-year Treasury yield dropped to about 5.0025% as investors sought safety.
why it matters
The selloff shows investors now weigh the return on huge AI infrastructure spending, not just earnings strength. If pressure on chipmakers and megacap tech continues, it could weigh on the broader US equity market, where these companies carry significant weight. Higher oil adds another layer of uncertainty.
market impact
Nasdaq and chip stocks: pressure from doubts over AI spending; Brent: support from supply-disruption fears
instruments
sources
- Wall Street sinks as Nasdaq falls over 2% on AI cost worries — Reuters, 22 October 2026 at 16:44 UTC
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