US equities ended mixed on Thursday, with the technology-heavy Nasdaq Composite suffering its steepest one-day decline since June, as renewed worries about the scale of artificial intelligence investment rattled investors. The S&P 500 also logged its worst session since July, while the Dow Jones Industrial Average managed a marginal gain.
The Nasdaq Composite dropped 2.60% to close at 26,008.86, and the S&P 500 fell 1.21% to 7,663.43. The Dow edged up 0.02% to 52,867.98. The selloff was led by major tech names as market participants reassessed the costs and financing needs tied to expanding AI infrastructure.
Meta Platforms slid roughly 7% even after reporting better-than-expected third-quarter revenue and an upbeat outlook. Investors focused on the company's rising AI expenditure, its first cash outflow in over a decade, and its plan to issue non-voting shares to gain flexibility in funding expansion.
Chipmakers were particularly hard hit. Advanced Micro Devices fell more than 8%, Micron Technology declined 6%, and Nvidia lost 4%. CoreWeave, a major provider of AI-focused cloud infrastructure, dropped more than 10% amid ongoing concerns about its debt and financing costs. The Philadelphia Semiconductor Index recorded a steep decline, extending its pullback from the record closing high set on June 22, though it remained sharply higher for the year and continued to outperform the broader S&P 500.
Tesla shares also declined despite the electric vehicle maker reporting positive free cash flow for the quarter and lowering its 2026 capital expenditure plans.
Oil surges on Middle East tensions
Oil prices jumped after reports that the US and Israel were considering renewed strikes against Iran following next month's US midterm elections. Tensions escalated further after Iran-backed Houthi forces launched new attacks against Saudi targets, raising concerns about potential disruptions to energy supplies.
Brent crude futures rose 3% to settle at $113.03 a barrel, while US West Texas Intermediate crude advanced 2.18% to $99.27. Higher oil prices also stoked inflation worries and raised questions about the Federal Reserve's next policy move.
US jobless claims remained near multi-decade lows, suggesting the labour market could allow policymakers to keep their focus on inflation. Financial markets were pricing in the possibility of another 25-basis-point interest rate increase before the end of the year.
Treasury yields fall as investors seek safety
US Treasury yields declined as investors moved into safer assets amid tech stock volatility and rising geopolitical risks. The benchmark 10-year Treasury yield fell more than 17 basis points to 4.974%, its lowest level in almost a month. The two-year yield dropped more than 16 basis points to 4.66%.
The move marked a shift from earlier concerns about inflation and elevated borrowing costs, as investors reassessed the risks associated with AI-related financing and the outlook for energy prices.
Meanwhile, third-quarter earnings continued to provide mixed signals. Of the 111 S&P 500 companies that had reported results, 83% had exceeded analyst expectations, according to LSEG data. Procter & Gamble shares rose after the consumer goods company beat revenue estimates, despite warning that higher commodity costs would weigh more heavily on annual profits.
This article is for informational purposes only and does not constitute financial advice.
