Nasdaq falls 2.6% and S&P 500 drops 1.21% as oil climbs and Meta slides on AI spending
Yahoo Finance reported that on Thursday, Oct. 22, the Nasdaq Composite fell 2.6% to 26,008.86, the S&P 500 lost 1.21% to 7,663.43 and the Dow Jones Industrial Average rose 11.89 points, or 0.02%, to 52,867.98. The New York Times reported that earnings from big technology companies spooked investors and that oil rose to its highest level in months. Bloomberg reported that Meta fell about 7% after raising its AI spending outlook and announcing a new stock class, and that Tesla cut its capital spending guidance. NBC News reported that fears of a U.S. or Israeli attack on Iran sent oil higher. Bloomberg reported that Brent crude topped $110 earlier in the day after the U.S. ordered some diplomats out of Saudi Arabia following deadly attacks. CNBC reported that defensive stocks rose as AI stocks fell. Yahoo Finance reported that the 10-year Treasury yield fell below 5%.
The Nasdaq Composite holds far more technology and growth stocks than the Dow's 30 companies, so a drop in a few large AI-linked names moves it more. Companies that spend heavily on chips and data centers need that spending to produce revenue, and investors react when guidance shows the bill rising first. Higher oil prices feed into fuel and shipping costs, and falling Treasury yields show money moving into government bonds.
If you own index funds or a 401(k), a one-day drop of this size shows up in your balance but does not change what you own. Gas and heating costs follow crude oil with a delay, so a sustained rise would reach household bills in the weeks ahead. A lower Treasury yield can also nudge mortgage rates down over time.
Investors worried about AI spending and oil see a market that was priced for good news. Bloomberg reported that earnings from Meta and Tesla failed to support the AI trade, and NBC News tied the sell-off to Iran war fears and high AI spending colliding. On this view, stocks that rose on AI hopes have little cushion if spending outruns revenue.
Longer-term optimists point to demand and to an easing of the conflicts. Bill Ackman told CNBC that 2027 will be an amazing year for stocks as wars and inflation ease, and Blackstone's Jon Gray said on Bloomberg Television that AI is not a bubble. CNBC reported that defensive stocks rose, which on this view shows investors rotating rather than leaving the market.
Confirmed: Thursday's closing levels for the three major indexes and Meta's drop of about 7%. Not confirmed: how oil settled for the day, since reports cite different benchmarks and times. Watch Friday's opening for whether chip stocks keep falling, whether Brent holds above $110, and any news from Saudi Arabia or Iran.
DailyDrop U.S. No. 19 · October 23, 2026