Nasdaq Drops 2.6% as Meta, Tesla Capex Spooks AI Stocks
Meta and Tesla’s capital spending plans spooked investors and spread to chipmakers, while oil climbed on fresh tensions in the Strait of Hormuz.
Market Snapshot
All figures are indicative opening levels as of this morning, October 23.
Stocks fell Thursday as the AI trade took another hit: the Nasdaq dropped 2.60 percent to around 26,008.86, its worst session since June, while the S&P 500 slid 1.21 percent to around 7,663.43.
The Dow held essentially flat, up 0.02 percent to around 52,867.98, as defensive names offset the growth-stock selloff.
Gold eased 0.57 percent to around $4,037.30 and silver fell 1.87 percent to around $53.98, while oil jumped 1.21 percent to around $100.67 after the Hormuz tanker strikes.
Meta fell 6.98 percent to around $648.85 even after beating revenue estimates, as capital spending plans overshadowed the results.
Tesla dropped 3.08 percent to around $374.58 after cutting its 2026 capex forecast despite topping earnings estimates.
Moderna plunged 25.20 percent to around $183.88 after melanoma vaccine data appeared to leak online ahead of a scheduled conference presentation.
Main Story
A pair of megacap earnings reports reset the AI spending debate Thursday, with the damage spreading well beyond the two stocks involved.
- Meta posted Q3 revenue of $64.6 billion, up 26.1 percent and ahead of estimates, but $34.9 billion in capex and negative free cash flow of $2.12 billion sent shares down nearly 7 percent.
- Tesla beat earnings estimates but cut its 2026 capex forecast to around $20 billion from more than $25 billion, a signal of slower AI and robotics spending that sent shares down over 3 percent.
- Wall Street is losing patience with AI payback timelines, and the fear spread fastest through chipmakers Lam Research, Coherent, and Lumentum, all down double digits, while the Dow’s defensive names held up, more rotation than risk-off.
Chart of the Day
WTI crude is trading around $100.67 this morning, up about 1.2 percent, after Iran said seven tankers were struck in the Strait of Hormuz overnight, the largest single-day toll in the waterway since February.
The strike reinforces a war-risk premium that has carried crude higher through October, with technicals still reading Strong Buy.
Traders are watching whether that premium holds through the weekend.
Technical Trading
WTI levels from Investing.com’s Friday technical summary:
- The 14-day RSI reads 63.65, a buy signal that still leaves room to run before crude looks overbought.
- MACD at 0.536 confirms the bullish setup, with price above both the 50-day moving average near $99.05 and the 200-day near $97.16.
- Pivot resistance sits at $101.62, with first support at $100.49 if the Hormuz risk premium starts to fade.
Global News
- Iran said seven oil tankers were struck in the Strait of Hormuz overnight, the largest single-day toll since hostilities with Israel began in February, and warned of a wider response.
- France’s 10-year bond yield broke above 5 percent for the first time since 2002, as budget deadlock and street protests deepen the debt crisis.
- Asian equities were mixed overnight: South Korea’s tech-heavy market tumbled more than 5 percent tracking Wall Street’s AI selloff, while Hong Kong and Shanghai advanced.
- The Federal Reserve’s next policy meeting runs October 27 and 28, with markets pricing roughly 85 percent odds of a hold at 3.75 to 4.00 percent.
Texas News
Texas shed 18,900 jobs in September, the steepest monthly drop since June 2025, and the Dallas Fed cut its full-year employment growth forecast to just 0.9 percent.
The slowdown comes as Fifth Third Bank expands its Neighborhood Program into Dallas and Houston, directing fresh funding to underserved communities.
Looking Ahead
Friday, October 23: Flash PMI readings for the US, Eurozone, and UK are due this morning, an early read on how businesses are holding up amid this week’s AI capex jitters.
Monday, October 26: The Dallas Fed’s Texas Manufacturing Outlook Survey is due, a fresh read on Texas factory activity ahead of next week’s Fed meeting.
Tuesday, October 27: The Federal Reserve’s two-day policy meeting kicks off, with a decision due Wednesday afternoon.
The Y’all Street Podcast
Evan talks with Wasif Latif, Co-Founder and CIO of Sarmaya Partners, about his “Return to Tangibles” thesis: markets shifting from tech and long-duration financial assets toward energy, metals, commodities, and infrastructure. They cover what’s changed since the 2008 financial crisis, and frame AI as much a physical infrastructure story (power, natural gas, copper, uranium) as a software one. Latif ties it back to how he’s positioning around that view through Sarmaya’s LENS ETF.
Prices from Yahoo Finance, CNBC and Fortune. Technical levels from Investing.com and FXStreet. News from Reuters, Al Jazeera and CNBC.
For informational purposes only. Not investment advice. Prices are indicative opening levels and may differ from your broker.
