Wall Street’s technology-heavy Nasdaq Composite had its worst session since June on Thursday. A string of company results revived an uncomfortable question: how much will the artificial intelligence boom cost, and who will pay for it?
The Nasdaq closed down about 2.6% at 26,008.86. The S&P 500 shed roughly 1.2% to finish near 7,663, its weakest day since July. The Dow Jones Industrial Average fared far better and ended little changed, which shows how concentrated the damage was.
Chipmakers take the brunt
Semiconductor stocks led the decline. A basket of chip companies fell by nearly 7%, according to Bloomberg’s market wrap. Reuters reported that Intel, AMD, SanDisk and Marvell Technology each lost more than 8%.
The Philadelphia semiconductor index is now more than 26% below its record close of June 22. It is still up roughly 51% for the year, a reminder of how far the sector had run before the recent retreat.
Shares of companies that supply power and energy to data centers also tumbled. Investors are increasingly uneasy about how quickly the cost of building that infrastructure is rising.
Earnings sharpen the debate
The trigger was a run of results from some of the market’s largest names. Meta Platforms reported quarterly cash flow that turned negative, a first in more than a decade, as its spending on data centers and equipment outpaced the cash its operations generated. Tesla’s quarterly report also fell short of what some investors had hoped for. Chip-equipment maker Lam Research added to the mood with a warning about its supply chain.
Individually, none of these items would normally move an entire index. Together they reinforced a worry that has grown through the autumn. Technology companies are committing record sums to AI capacity, and some may need to borrow more to fund it before the returns are clear.
The reaction suggests investors are asking for evidence of profit rather than promises of growth. Several leading companies had already seen sharp pullbacks in recent weeks on the same concern.
Oil adds a second source of pressure
Technology was not the only drag. Oil prices climbed again, with Brent crude trading above $110 a barrel, after press reports that US and Israeli military planners have drawn up options for renewed strikes on Iran after next month’s US midterm elections. Higher energy prices feed inflation concerns, and that complicates the outlook for interest rates.
Money moved toward safer assets in response. Prices of US government bonds rose and yields fell, a shift covered in more detail in our separate report on the bond market.
What investors are watching next
Asia-Pacific markets were set to open mostly lower on Friday after Wall Street’s slide, while US stock futures pointed in different directions. Several companies report before the opening bell today, including American Express, Autoliv, Booz Allen Hamilton and Flagstar Bank. Fresh purchasing-manager surveys for October are also due and will give a read on business activity and cost pressures.
Strategists often note that one hard day does not make a trend. The Nasdaq remains well above where it started the year, and sharp reversals have appeared repeatedly in 2026. But the reaction to Thursday’s results shows how sensitive the market has become to any hint that AI spending is running ahead of the revenue it produces.
For long-term investors, the practical lesson is about concentration. A small group of very large technology companies now carries a heavy share of index performance, and when sentiment toward them shifts, broad benchmarks feel it quickly.
This article is for information only and does not constitute investment advice.
