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AI Spending Fears Trigger Sharp U.S. Tech Selloff

Published on October 23, 2026

A sharp selloff in AI-linked shares pushed the Nasdaq Composite down 2.6% and the S&P 500 down 1.21% on Thursday. Meta Platforms, Nvidia and Tesla fell as investors questioned the sustainability and financing costs of the sector’s enormous data-center and chip investments, while higher oil prices added to market pressure.

Wall Street trading screens showing a sharp decline in technology and AI stocks

AI spending fears shake U.S. stocks

A sharp retreat in artificial-intelligence shares drove the Nasdaq Composite down 2.6% on Thursday, its steepest decline since June, while the S&P 500 fell 1.21%, its biggest drop since July. The Dow Jones Industrial Average edged higher as strength across much of the broader market was overwhelmed by losses in large technology companies. Al Jazeera AP News

The selloff centered on growing concern over the cost and financing requirements of the AI buildout. Investors are questioning whether companies can sustain the enormous capital investments needed for data centers and AI chips, even as the sector continues to report growth. Rising crude prices added to the pressure on risk assets, with Brent crude settling at $113.17 a barrel after a reported attack on Saudi oil infrastructure. Yahoo Finance Reuters via Fidelity

Meta and Nvidia lead the technology retreat

Meta Platforms fell nearly 7% after reporting stronger-than-expected quarterly revenue while profit fell short of expectations. The company also lifted its projected capital spending for the year to $135 billion-$145 billion, intensifying scrutiny of AI-related investment plans. Al Jazeera AP News

Nvidia dropped 4.4% and was described as the single strongest force pulling the S&P 500 lower, reflecting the influence of the largest companies on the benchmark. Tesla declined 3.1% despite reporting stronger summer profit than analysts expected, as revenue came in below forecasts. AP News

The pressure continued into Friday trading. Futures pointed lower, while AT&T, Verizon and T-Mobile fell more than 3% in premarket trading after reports that SpaceX was discussing a nationwide wireless-carrier program with cellular infrastructure companies. Reuters via Fidelity

What to watch

Investors will focus on whether upcoming technology earnings can justify rising AI capital spending and whether the pressure spreads beyond the sector. Meta’s spending outlook, Nvidia’s market performance and further evidence on data-center financing costs remain central to the debate over the durability of the AI trade.

Tickers

METANVDATSLATVZTMUS

Sources