Nasdaq Plunges 2.6% as AI Spending Concerns and Surging Oil Prices Rattle Wall Street

U.S. stocks came under heavy selling pressure on Thursday (October 22, 2026), as renewed concerns over massive artificial intelligence (AI) investments and rising oil prices amid escalating geopolitical tensions weighed on market sentiment. The Nasdaq Composite plunged 2.6% to 26,008.86, marking its worst daily performance since June. Meanwhile, the S&P 500 declined 1.21% to close at 7,663.43, recording its steepest daily loss since July. In contrast, the Dow Jones Industrial Average managed to remain slightly positive, edging up 11.89 points, or 0.02%, to finish at 52,867.98.

Technology giants led the market downturn as investors grew increasingly concerned about the sustainability of massive capital expenditures on AI infrastructure. Shares of Meta Platforms tumbled nearly 7%, despite the company exceeding revenue expectations and providing an optimistic business outlook. Semiconductor stocks also faced significant selling pressure, with Advanced Micro Devices (AMD) plunging more than 8%, Micron Technology falling 6%, and Nvidia declining approximately 4%. The broad-based weakness highlighted growing investor skepticism over whether substantial AI investments would generate sufficient returns to justify their rapidly rising costs.

CoreWeave, a leading provider of AI-focused cloud computing infrastructure, also suffered heavy losses, with its shares sliding more than 10%. Concerns surrounding the company's financing conditions remained elevated, reflected in persistently high bond yields and credit default swap (CDS) premiums, which signal heightened perceptions of credit risk. Meanwhile, Nvidia CEO Jensen Huang emphasized that demand for AI-focused cloud services, commonly known as neoclouds, remains exceptionally strong. However, he acknowledged that limited access to capital continues to constrain industry expansion, highlighting the financial challenges facing AI infrastructure providers despite accelerating demand for computing capacity.

Wall Street's downturn also coincided with a sharp increase in global oil prices as geopolitical tensions intensified, raising concerns about renewed inflationary pressures and uncertainty surrounding the Federal Reserve's interest rate outlook. The combination of higher energy costs, growing financing requirements in the technology sector, and doubts about AI investment profitability prompted investors to adopt a more cautious approach toward risk assets. Looking ahead, market participants are expected to closely monitor upcoming technology earnings reports, oil price developments, and signals from the Federal Reserve. If inflationary risks persist and concerns over AI financing continue to intensify, U.S. equities could face further volatility, particularly in the technology sector, which has been a major driver of Wall Street's recent gains.(mrv)

Source : Newsmaker.id