Nasdaq Falls 2.6% as AI Spending Fears Trigger Tech Sell-Off; Meta Down 7%, Tesla 3.1%

Nasdaq

Wall Street tumbled on Thursday as revived doubts about the artificial intelligence spending race triggered a broad technology sell-off. The Nasdaq Composite fell 2.58% to 26,008.86 — its steepest one-day drop since June — while the S&P 500 lost 1.19% to 7,664.77, its worst session since July. The Dow Jones bucked the trend, edging up 0.03% to 52,873.60.

Meta Platforms plunged 7% despite beating analyst expectations, after posting its first cash outflow in more than a decade driven by AI-related spending. The company also announced plans to issue non-voting shares to raise capital for AI investment. Tesla fell 3.1% even after reporting positive free cash flow, as it cut its 2026 capital spending plans. Chipmakers were hit hardest: the Philadelphia Semiconductor Index plunged 6.7%, its biggest daily drop since June, with AMD, Intel, SanDisk and Marvell each falling more than 8%, while Nvidia dropped over 4% and CoreWeave slid 10.1%.

Rising oil prices added to the pressure, with Brent crude touching a five-month high near $113 amid Middle East tensions. “Investors are starting to realize that there are some holes in the AI story,” said Paul Nolte of Murphy & Sylvest, noting that the market is heavily weighted toward technology that has driven gains all year.

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