The Nasdaq Composite tumbled 2.6% on Thursday — its sharpest one-day fall since June — as investors dumped technology and chip stocks over worries about the enormous sums being poured into artificial intelligence, while rising Middle East tensions pushed oil to its highest level in five months and drove money into the safety of government bonds.
The S&P 500 fell 1.2% to close at 7,663.43, its worst session since July, while the blue-chip Dow Jones Industrial Average bucked the trend, edging up 11 points to finish at 52,867, according to Investor’s Business Daily.
Meta, Tesla and chip stocks lead the slide
Meta Platforms fell 7%, erasing about $124 billion from its market value, after signaling it could soon seek billions of dollars more in funding for its AI build-out, the Wall Street Journal reported. Tesla declined about 3% after reporting lower adjusted net income, and SpaceX fell 9.1%.
The pain was sharpest in semiconductors: the PHLX semiconductor index dropped 6.7%, while chip stocks including Nvidia, AMD and Micron fell broadly. Roundhill’s Memory ETF dropped 7% and the Magnificent Seven ETF ended more than 3% lower, Investopedia reported.
Oil jumps on Middle East fears
Brent crude rose about 2.6% to close near $112.91 a barrel, a roughly five-month high, while U.S.-focused WTI futures gained to about $99.09 a barrel. Markets were unsettled by fresh strikes in Saudi Arabia and reports that the United States and Israel are weighing renewed strikes on Iran after next month’s midterm elections.
Investors rush into bonds
The yield on the 10-year Treasury note plunged 19 basis points to 4.95%, falling below 5% for the first time since September 23 in its largest one-day decline since March 2023, Investor’s Business Daily reported. The 2-year yield eased 14 basis points to 4.69%, while bitcoin sank nearly 4% to about $81,300.
What it means for your money
Lower bond yields ease the pressure that has been pushing mortgage, auto-loan and credit-card rates up — good news for borrowers. But oil near five-month highs raises the risk that gasoline and heating costs climb further, feeding the inflation pressure households already feel. And anyone with a retirement account weighted toward big technology stocks just watched part of their balance disappear.
Sources: The Wall Street Journal; Investopedia; Investor’s Business Daily; TradingKey.
