Wall Street stocks fell sharply as stronger-than-expected earnings from Meta Platforms (NASDAQ: META) failed to reassure investors rattled by concerns over mounting artificial intelligence infrastructure costs.
The Nasdaq Composite dropped 590.94 points, or 2.21%, to close at 26,111.92, leading declines across all major U.S. stock indices.
Meta shares fell more than 5% despite the company reporting a 26% increase in quarterly revenue to $64.6 billion, driven by stronger digital advertising demand and AI-powered content recommendations.
Investors reacted negatively to Meta’s plan to issue non-voting stock, which revived concerns about the company’s growing capital commitments and long-term spending trajectory.
The Philadelphia Semiconductor Index dropped 5.6%, hitting its lowest level since July 29, with more than $616 billion in market value placed at risk across the index’s constituents.
The Nasdaq-100 was on track to lose nearly $1 trillion in value as the selloff extended beyond Meta to strike at the broader technology sector.
Amazon and Nvidia each lost more than 3%, adding further pressure to the so-called Magnificent Seven group of leading U.S. technology stocks.
Tesla declined around 1.9% after reducing its annual capital expenditure forecast, prompting questions about the pace of its robotics and autonomous driving investment plans.
Surging oil prices compounded selling pressure across markets, with Brent crude climbing above $112 a barrel amid renewed tensions involving Iran, stoking fresh inflation fears.
The 10-year Treasury yield posted its biggest single-day drop in more than two years, slipping back below 5% as investors rotated away from equities and into safer assets.
The Dow Jones Industrial Average fell 114.55 points, or 0.22%, to 52,741.54, while the S&P 500 declined 97.15 points, or 1.25%, to settle at 7,660.02.
Investors are now focused on further corporate earnings, developments in Middle Eastern energy supplies, and Federal Reserve commentary for signals on whether the current volatility will persist.
