Published Fri, Oct 23, 2026 · 05:55 AM
[NEW YORK] US stocks tumbled on Thursday (Oct 22) and the Nasdaq posted its steepest daily drop since early June as a batch of high-profile earnings reports ignited fresh fears about the artificial intelligence spending race.
The S&P 500 ended deep in negative territory. But the tech-laden Nasdaq, dragged down by microchips, suffered a steeper loss, falling 2.6 per cent in the wake of a spate of high-profile AI-related earnings results.
The blue-chip Dow eked out a nominal gain minutes before the closing bell.
Meta Platforms’ results beat analyst expectations, but its stock slid 7 per cent as the Facebook parent posted its first cash outflow in more than a decade due to its AI-related expenditures and announced plans to issue non-voting shares in a two-for-one split to raise capital to spend on the nascent technology.
Tesla shares fell 3.1 per cent even though the electric car maker unexpectedly posted positive free cash flow in the quarter and cut its 2026 capital spending plans.
The Philadelphia SE Semiconductor Index, which has driven much of the current bull market’s gains, plunged 6.7 per cent, its biggest daily percentage drop since Jun 23.
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With Thursday’s decline, the SOX is off more than 26 per cent from its record closing high reached on Jun 22, yet it remains up 51.5 per cent so far in 2026. The S&P 500 has risen 11.9 per cent over the same period.
“It’s a wonderful day on Wall Street,” said Paul Nolte, senior wealth adviser & market strategist at Murphy & Sylvest in Elmhurst, Illinois. “The only part of the market that is really suffering here is technology, which has been the golden child of the markets up until about June.”
“Investors are starting to realise that there are some holes in the AI story,” Nolte added. “And that’s having an impact on the indices because they’re so heavily weighted towards technology.”
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On the geopolitical stage, Iran-backed Houthis launched new strikes against Saudi targets, sending crude prices to a five-month high. Investors worried that ongoing Middle East strife could keep inflation hot and force the US Federal Reserve to keep raising interest rates.
Data from the Labor Department showed initial claims for unemployment benefits kept drifting along near multi-decade lows.
Signs of labour market stability will allow the Fed to focus on fighting inflation. Financial markets are currently pricing in the probability that the central bank will raise its policy rate by another 25 basis points before end-2026.
The Dow Jones Industrial Average rose 11.89 points, or 0.02 per cent, to 52,867.98, the S&P 500 lost 93.74 points, or 1.21 per cent, to 7,663.43 and the Nasdaq Composite lost 694.00 points, or 2.6 per cent, to 26,008.86.
Third-quarter earnings season is well underway, with 111 of the companies in the S&P 500 having reported. Of those, 83 per cent have beaten analyst expectations, according to the most recent LSEG data.
Procter & Gamble warned that rising cost pressures would take an increasing bite out of profit, but beat analyst estimates, sending the stock 5.6 per cent higher and supporting consumer staples.
Blackstone advanced 8.4 per cent, after the company said widening credit spreads on AI-related debt could present an opportunity to lock in higher returns.
Lockheed Martin climbed 7 per cent after the aerospace/defence firm raised its annual sales and profit forecast.
Spotify rose 11.1 per cent after the Swedish music streaming firm forecast fourth-quarter profit above Wall Street estimates, betting on its AI-powered features to drive user growth.
Union Pacific gained 3.6 per cent following the company’s quarterly earnings beat, which was helped by core pricing gains, although the railroad flagged a hit from rising fuel prices.
Chipmakers Intel, AMD, Sandisk and Marvell all tumbled more than 8 per cent amid the broader semiconductor sell-off.
Advancing issues outnumbered decliners by a 1.01-to-1 ratio on the NYSE. There were 173 new highs and 366 new lows on the NYSE.
On the Nasdaq, 2,022 stocks rose and 2,766 fell as declining issues outnumbered advancers by a 1.37-to-1 ratio.
The S&P 500 posted 40 new 52-week highs and four new lows while the Nasdaq Composite recorded 82 new highs and 342 new lows.
Volume on US exchanges was 18.79 billion shares, compared with the 17.19 billion average for the full session over the last 20 trading days. REUTERS