Image Source: CNBC
The stock market suffered a sharp technology-led sell-off Thursday as investors grew increasingly nervous about artificial intelligence spending, expensive infrastructure projects and escalating geopolitical tensions involving Iran.
The Nasdaq Composite fell 2.6% to 26,008.86, recording its worst session since June. The S&P 500 dropped 1.21% to 7,663.43, marking its weakest day since July. The Dow Jones Industrial Average was the outlier, edging up 11.89 points, or 0.02%, to close at 52,867.98.
Stock Market Tumbles as AI Spending Fears Intensify
Technology shares led the decline as traders questioned whether the massive cost of building AI data centers can be justified by future profits. Meta Platforms fell about 7% despite beating revenue expectations and providing upbeat guidance.
Advanced Micro Devices dropped more than 8%, while Micron Technology declined 6% and Nvidia lost 4%. CoreWeave, a major provider of cloud computing infrastructure for artificial intelligence, plunged 10% as concerns about its debt and financing conditions resurfaced.
Nvidia CEO Jensen Huang told CNBC that demand for neocloud services was “off the charts,” but warned that capital was scarce. His comments unsettled investors already worried that credit markets may not be able to support the next phase of AI expansion.
Wells Fargo traders said Huang’s remarks reignited concerns that capital markets have become crowded from a risk perspective. They also pointed to Meta’s discussion of the enormous funding needed for artificial intelligence as a factor weighing on technology shares.
AI Infrastructure Stocks Face a Painful Reckoning
The pressure spread beyond semiconductor companies. Stocks tied to electricity generation, grid equipment and data center construction also fell sharply.
- GE Vernova and Bloom Energy each dropped more than 11%.
- Vistra declined more than 10%.
- Quanta Services fell over 8%.
- Talen Energy lost 8.3%.
- Eaton slid nearly 7%.
Nuclear energy companies Oklo and NuScale Power also moved lower. The broad retreat suggests investors are reassessing the sustainability of the AI infrastructure boom, rather than simply reacting to one company’s earnings report.
Oil Prices Surge as Iran Risks Shake Wall Street
Energy markets added another layer of uncertainty. Brent crude futures jumped 4% to settle at $113.17 per barrel, the highest level since May 4. West Texas Intermediate crude gained 2.39% to $99.47.
The move followed a report from The New York Times that the United States and Israel may plan renewed strikes against Iran after next month’s U.S. midterm elections. President Donald Trump also told reporters that Washington was not negotiating with Tehran and that something could happen “fairly soon.”
Rising oil prices can pressure consumers, transportation companies and manufacturers while increasing inflation concerns. Energy stocks benefited from the surge, but airlines faced renewed pressure. American Airlines fell in premarket trading after forecasting a larger full-year loss and citing higher fuel costs.
Investors Seek Safety in Treasurys
As equities weakened, investors moved toward U.S. government bonds. The benchmark 10-year Treasury yield fell more than 17 basis points to 4.972%, its lowest level in almost a month. The two-year yield declined more than 16 basis points to 4.659%.
The bond rally reflected a classic flight to safety, although it also highlighted the market’s competing concerns: slower growth, geopolitical instability and uncertainty surrounding corporate investment plans.
Stocks Making Notable Moves
Several companies moved sharply on earnings and analyst commentary:
- Lockheed Martin rose more than 4% after beating quarterly expectations and raising its 2026 outlook. Its order backlog reached a record $292 billion.
- Procter & Gamble gained about 3% after reporting stronger-than-expected earnings and revenue and lifting its full-year sales guidance.
- Blackstone advanced 6% after adjusted earnings exceeded forecasts and assets under management reached $1.368 trillion.
- Comcast climbed 4% after beating estimates for earnings, revenue and free cash flow.
- Moderna dropped as much as 25% after partial data from its cancer vaccine trial leaked, although the complete results later appeared positive.
Meanwhile, Wolfe Research downgraded Netflix, arguing that the streaming company has struggled to generate stronger viewer engagement despite billions of dollars in additional content spending.
What the Stock Market Sell-Off Means for Investors
Thursday’s trading showed how quickly market sentiment can reverse when multiple risks collide. Strong corporate results were not enough to offset worries about AI financing, elevated valuations and potential conflict in the Middle East.
Investors will likely focus on upcoming earnings, oil prices, credit conditions and further comments from technology executives. Until those uncertainties fade, market volatility may remain elevated, particularly across high-growth technology and AI infrastructure stocks.
Frequently Asked Questions
Why did the stock market fall Thursday?
The decline was driven by renewed concerns about artificial intelligence spending, scarce financing for neocloud companies and rising geopolitical tensions involving Iran.
How much did the Nasdaq fall?
The Nasdaq Composite dropped 2.6% to 26,008.86, its worst daily performance since June.
Why did oil prices rise?
Brent crude surged amid reports that the United States and Israel could resume strikes against Iran following the U.S. midterm elections.
Which stocks performed well?
Lockheed Martin, Procter & Gamble, Blackstone and Comcast gained after reporting strong results or receiving positive market reactions.
