- The Nasdaq 100 fell 2.4% and the S&P 500 lost 1.3% by late morning in New York on Thursday, with tech leading the decline. If the losses hold, the Nasdaq 100 will post its worst day since June.
- Meta slid 5.9% even after beating estimates and raising its capital spending outlook, and a gauge of its credit risk surged to a record. Investors fear the spending plans will push tech giants to issue more debt into an already saturated market.
- West Texas Intermediate crude rose 1.1% to $98.18 a barrel after fresh attacks on Saudi Arabia, and the US ordered some diplomats and their families out of the country. The Wall Street Journal also pointed to US-Israeli plans for renewed attacks on Iran as a driver of the oil move.
- Treasuries rallied as a haven, with the 10-year yield retreating to 5%, while investors turned to defensive names such as Procter & Gamble. AI heavyweights including Nvidia, Intel, CoreWeave and SpaceX were among the decliners.
What Happened?
Stocks declined Thursday as escalating concern about Mideast conflict pushed oil higher and spurred inflation fears less than two weeks before the US midterm elections, Bloomberg reported. At least four people were killed by attacks on an Aramco oil site and a Saudi Arabian airport on Wednesday, and the US pulled some diplomats from Saudi Arabia over the threat from Houthi militants. Meta initially traded higher after its results before reversing, while Tesla fell 0.78% after cutting its spending plans. Lam Research’s weaker-than-expected guidance weighed on chip-equipment stocks, overshadowing a beat from Texas Instruments.
Why It Matters?
The selloff shows the market questioning not whether AI spending is large, but whether it pays off and how it gets funded. Meta’s record credit-risk reading is the telling detail, because it shows bond investors now share equity investors’ worries about debt-financed capex. Apollo’s Torsten Slok warned that if the AI payoff is slow to materialize, venture returns and in turn demand for compute could weaken. Oil adds a second front by feeding the inflation fears behind the risk-off mood. French bond stress also deepened as investors ditched riskier assets around the world.
What’s Next?
Watch whether the Nasdaq 100 holds its losses into the close, which would mark its worst day since June and a fourth move of at least 1% in five sessions. Western Digital reports after the close and will test sentiment in memory stocks. Peter Boockvar said US yields have likely seen a temporary peak, and a continued bond rally could support rate-sensitive sectors such as real estate. Further escalation in the Gulf remains the swing factor for oil and inflation expectations.
Affected Tickers and Coins: QQQ, SPY, META, TSLA, LRCX, NVDA, INTC, CRWV, CL
Source: Bloomberg, The Wall Street Journal
