IXIC: Nasdaq Sinks 2.6% as AI Fears Ripple Across Markets. Gains Are Focused Elsewhere

Technology stocks retreat as investors question the cost of AI expansion. Bonds attract buyers, oil approaches $114 and global markets head toward a busy stretch of earnings and central-bank decisions.

📉 AI selling masks strength elsewhere

• The Nasdaq Composite dropped 2.6% to 26,008.86 Thursday, its steepest decline since early June. The S&P 500 fell 1.21% to 7,663.43, while the Dow edged up 0.02% to 52,867.98.
• Most US stocks advanced, showing how losses in heavyweight technology companies can overwhelm gains elsewhere.
• Semiconductors led the retreat, with the Philadelphia chip index losing 6.7%. Nvidia fell 4.4%, while Intel, AMD, Sandisk and Marvell each lost more than 8%. Meta dropped 7% and Tesla shed 3.1% as their earnings updates renewed scrutiny of AI spending and its eventual returns.
• Earnings produced some substantial winners. Procter & Gamble gained 5.6% after beating estimates, Blackstone rose 8.4% and Spotify jumped 11.1% on an upbeat profit outlook. The contrast suggests investors are becoming more selective about which growth stories — and spending plans — they will reward.
• SpaceX’s wireless ambitions shook telecom stocks after hours. Reports of talks to secure at least 80,000 US cell sites sent Crown Castle up roughly 9%, American Tower up 4% and SBA Communications up 7%. Verizon, AT&T and T-Mobile fell around 3%–4% as investors assessed potential competition from another nationwide carrier.

🌏 Asia retreats as bonds and currencies draw attention

• South Korea’s Kospi fell about 2.5% in Friday trading, with Samsung among the stocks under pressure. Japan’s Topix lost 1.8% and the Shanghai Composite declined 1.6%, while Hong Kong’s Hang Seng edged higher.
• US equity futures offered a quieter early indication: S&P 500 futures were little changed, while Euro Stoxx 50 futures slipped around 0.2%. In currencies, the euro traded near $1.1210 and USD/JPY hovered around ¥156.90 following the yen’s gains over the previous three sessions.
• The US 10-year Treasury yield returned below 5%, trading around 4.96%. Thursday’s sharp bond rally reflected demand for safety, while France’s benchmark yield climbed above 5.06% amid fiscal concerns. December Fed hike odds eased to roughly 85% — still substantial, despite the shift toward caution.
• Japan supplied another reason to watch the yen. September core inflation accelerated to 2.1% from 1.7%, returning above the BOJ’s target. That supports the case for further tightening, although it does not settle the timing. The central bank’s next policy meeting ends October 30.

🛢️ Oil rises as traders prepare for the next catalysts

• Brent approached $114 a barrel and US crude moved above $100 early Friday, extending Thursday’s rally after attacks in Saudi Arabia heightened supply concerns.
• Expensive energy complicates the outlook: it raises costs for businesses and consumers while keeping inflation pressure alive as investors question growth.
• Gold hovered around $4,000 after Thursday’s roughly 3% decline, failing to attract the same haven demand as bonds. Bitcoin recovered about 0.7% to $81,700 from near $80,000 and Ether rose 1.2% to $2,410.
• Friday’s US flash PMIs arrive at 9:45 a.m. ET, followed by final Michigan consumer sentiment and inflation expectations at 10 a.m. American Express and SLB also report before the open.
• Next week brings another demanding test for markets: Microsoft, Amazon and Alphabet earnings alongside the Fed decision on Wednesday and the ECB on Thursday. Traders will be assessing both the returns from AI investment and the borrowing costs needed to finance its expansion.