S&P 500 and Nasdaq end sharply lower as revived AI doubts ignite tech selloff
SPY•The S&P 500 fell 1.21% and the Nasdaq slid 2.60% on Thursday as earnings reports revived concerns about AI spending; the Dow edged up 0.02%. The Philadelphia semiconductor index dropped 6.7%, its biggest one-day percentage decline since June 23.
1. Tech shares lead declines
U.S. stocks fell on Thursday, with the Nasdaq posting its steepest daily percentage drop since June 5. The S&P 500 lost 1.21%, while the Dow rose 0.02%. Meta Platforms fell 7.0% after reporting its first cash outflow in more than a decade due to AI-related spending and announcing plans for a two-for-one split of non-voting shares to raise capital.
2. Semiconductors sink
The Philadelphia Semiconductor Index fell 6.7%, its largest daily percentage decline since June 23. It was down more than 26% from its June 22 record close but remained up 51.5% for the year, compared with an 11.9% gain for the S&P 500.
3. Earnings and economic data
Tesla shares fell 3.1% despite positive free cash flow and a reduction in its 2026 capital spending plans. Among companies gaining after results, Spotify rose 11.1%, Lockheed Martin 7.0%, Procter & Gamble 5.6%, Union Pacific 3.6% and Blackstone 8.4%. Of 111 S&P 500 companies that had reported, 83% beat analyst expectations, according to LSEG data. Unemployment claims remained near multi-decade lows, while markets priced in the possibility of another 25-basis-point Federal Reserve rate increase before year-end.
