Nasdaq Tumbles 2.6% as AI Stocks Sink and Oil Hits a Five-Month High

A fresh wave of selling in artificial intelligence stocks dragged Wall Street lower on Thursday, Oct. 22, as the Nasdaq composite tumbled 2.6% and the S&P 500 fell 1.2% for its worst day since July, the Associated Press reported.

The Dow Jones Industrial Average finished essentially flat, adding 11 points, according to the AP and Yahoo Finance. The AP noted that the tech slide was so heavy it masked gains for most of the market: two of every three stocks in the S&P 500 rose on the day.

Why AI Stocks Fell

AI-related stocks have been swinging on worries that the cost of borrowing money to build data centers and buy chips could threaten the boom, and on concerns that prices ran too high, the AP reported. Yahoo Finance said worries over AI spending and the cost of capital resurfaced after quarterly reports from Tesla and Meta.

Meta Platforms fell about 7% after reporting stronger revenue than analysts expected, though its profit fell short, according to the AP. Tesla dropped about 3% despite a stronger-than-expected profit, both outlets reported. Nvidia fell 4.4%, and as the largest company on Wall Street by market value it was the single biggest drag on the S&P 500, the AP said. Cloud provider CoreWeave dropped about 10%, and chip equipment maker Lam Research fell 11.8% even after slightly beating forecasts, according to the AP.

"I think what we are seeing is that at least larger enterprises are becoming a lot more cognizant and a lot more aware of what the true ROI of all of their AI spend is," IBM CEO Arvind Krishna said on the company's earnings call Wednesday, as quoted by Yahoo Finance.

The selling started in Asia, where South Korea's Kospi fell 3.5%, Hong Kong's Hang Seng dropped 3% and Japan's Nikkei 225 sank 2.7%, the AP reported.

Oil, Bonds and the Jobs Picture

Oil added to the pressure. Brent crude jumped 4% to $113.17 a barrel after touching its highest level in five months, up from less than $97 at the start of October, on uncertainty over the war with Iran, according to the AP. Yahoo Finance reported that U.S. crude climbed to about $100.

Investors moved into U.S. government bonds. The yield on the 10-year Treasury fell to 4.97% from 5.13% late Wednesday, the AP reported, and Yahoo Finance said it was on track for its biggest one-day drop in more than two years.

The day also brought a sign of a strong job market. Initial claims for unemployment benefits fell by 6,000 to 194,000 in the week ending Oct. 17, the Labor Department reported. The AP said that was the fewest in three months, another sign that layoffs remain low.

Image: The New York Stock Exchange, Broad Street (file photo), by Billie Grace Ward, Wikimedia Commons, CC0.

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Sources: Associated Press via The Morning Call, "Sharp drops for AI stocks overwhelm markets worldwide" (Oct. 22, 2026): https://www.mcall.com/2026/10/22/ai-stocks-financial-markets/ ; Yahoo Finance, "Stock market today" live coverage (Oct. 22, 2026): https://finance.yahoo.com/markets/live/stock-market-today-thursday-october-22-dow-sp-500-nasdaq-tesla-meta-112217857.html ; U.S. Department of Labor, Unemployment Insurance Weekly Claims (Oct. 22, 2026): https://www.dol.gov/ui/data.pdf