Nasdaq Falls on AI Doubts, Oil Spike

The move in rates matched the risk-off tone. Investors piled into U.S. government bonds, pulling the 10-year Treasury yield below 5% for the first time in a month as fears of slower growth and tighter financial conditions took over.

The pressure was heaviest in the AI complex, where investors have spent weeks questioning whether valuations have run ahead of near-term earnings and infrastructure capacity. Meta fell 7% and Tesla dropped 3% even after both posted stronger-than-expected quarterly results after Wednesday’s close.

Chip stocks also weakened after Lam Research reported results that missed expectations, with its shares tumbling 12% and dragging down Nvidia, AMD and Micron Technology by 4.4% to 8%. The sector slide followed comments from Nvidia Chief Executive Jensen Huang that demand from so-called neocloud providers remains extremely strong, but that capital shortages are limiting their expansion.

Rising crude prices added another layer of concern, feeding fears that the conflict in the Middle East could keep inflation sticky while also slowing global growth. Energy stocks were among the few beneficiaries, with the sector tracking higher as oil climbed.

Against that backdrop, Spotify was a clear outlier. The Swedish streaming group surged 11% after reporting more new paying subscribers than expected in the third quarter, giving investors a reminder that not every growth stock is being punished equally.

The market backdrop remains fragile heading into the next round of tech earnings and macro data, with investors watching whether AI spending can keep supporting the sector or whether the recent pullback marks a broader reassessment of the trade.