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Nasdaq falls 2.6% to 26,008.86 as AI spending worries hit chips

The Nasdaq Composite fell 2.6% to 26,008.86 on October 22, its steepest one-day drop since early June. Reuters and Yahoo Finance said renewed worry about AI spending after Meta and Tesla results drove the selloff, which hit chip stocks hardest.

By Rowan Ashby Published 23.10.26 00:02 UTC 5 min read

Nasdaq falls 2.6% to 26,008.86 as AI spending worries hit chips — Unknown /

Key takeaways

The Nasdaq Composite fell 2.60%, or 694.00 points, to 26,008.86 on Thursday, October 22, 2026. Reuters called it the index's steepest daily drop since early June.
Reuters and Yahoo Finance both reported that the main driver was renewed worry about the cost of the AI spending race after quarterly results from Meta Platforms and Tesla.
Chip stocks were the weakest part of the market. The Philadelphia Semiconductor Index (SOX) fell 6.7%, its biggest one-day drop since June 23, according to Reuters.
Higher oil prices added to the pressure. Reuters said Brent crude hit a five-month high after Houthi strikes on Saudi targets, which raised fears that inflation would stay high.
The selloff was concentrated in tech. The Dow Jones Industrial Average ended almost unchanged, and defensive stocks and several companies with strong results gained.

Why did the Nasdaq fall 2.6% on October 22?

The Nasdaq fell 2.6% to 26,008.86 on Thursday, October 22, 2026, its steepest daily drop since early June, as renewed worry about AI spending after Meta and Tesla results hit chip stocks, according to Reuters and Yahoo Finance. Nvidia fell 4.40% that day and entered a correction, 11.3% below its Oct. 6 record, as our Nvidia stock correction report explains.

US markets closed at 4:00 p.m. New York time (20:00 UTC). Bullquill's ticker monitor recorded the Nasdaq's final level of 26,008.86, down 2.60% from the previous close, in Yahoo Finance data as of 21:15 UTC.

What happened

The selling started early and grew during the session. At 11:35 a.m. New York time (15:35 UTC), the Motley Fool reported the index down 2.18%. By the close the loss had reached 2.6%.

Index	Close, Oct 22, 2026	Change
Nasdaq Composite	26,008.86	-694.00 (-2.60%)
S&P 500	7,663.43	-93.74 (-1.21%)
Dow Jones Industrial Average	52,867.98	+11.89 (+0.02%)
Philadelphia Semiconductor Index	n/a	-6.7%

Data as of the 20:00 UTC close, October 22, 2026. Source: Reuters closing report via Yahoo Finance. Earlier versions of the same Reuters story had slightly different figures, taken before final prices were settled.

Several large stocks drove the decline, according to Reuters:

Meta Platforms fell 7.0% even though its results beat expectations. The company reported its first cash outflow in more than a decade, which Reuters linked to AI spending. Meta also announced a new non-voting share class that it can use to raise capital (see our explainer on Meta's non-voting shares).
Tesla fell 3.1%. It had unexpectedly reported positive free cash flow and cut its 2026 capital spending plan. Yahoo Finance noted that the company also raised planned spending for 2027 and 2028 (our Tesla Q3 coverage).
Chipmakers Intel, AMD, Sandisk and Marvell each fell more than 8%. Yahoo Finance also reported steep losses at Lam Research, which had warned about supply-chain constraints, and at AI cloud provider CoreWeave (our chip stocks report).

What we know and what we don't know yet

Confirmed by multiple sources

Reuters, Yahoo Finance and the Motley Fool all named AI spending concerns after the Meta and Tesla results as the main pressure on the Nasdaq.
The Nasdaq's 2.6% drop and the large fall in semiconductor stocks are confirmed by end-of-day data.
According to Reuters and Yahoo Finance, oil rose because of escalating conflict in the Middle East, including attacks on Saudi facilities. Yahoo Finance reported Brent above $111 a barrel during the session.

Still unclear

It is not yet clear how much of the move came from changed views on AI demand and how much came from profit-taking after the strong gains chip stocks have made this year. Reuters said the SOX was still up 51.5% year to date even after Thursday's drop.
Oil's effect is harder to measure. Yahoo Finance reported that Treasury yields fell as investors bought bonds. In its view, worry about slower AI infrastructure building outweighed the inflation fears from oil on the day.

Oliver Pursche of Wealthspire Advisors told Reuters there is "a hypersensitivity around earnings for AI-related stocks." Paul Nolte of Murphy & Sylvest told Reuters that investors "are starting to realize that there are some holes in the AI story."

Background

Large technology companies have driven much of the gain in US stocks in 2026. That makes the Nasdaq sensitive to any sign that AI investment is reaching its limits. According to Reuters, the SOX closed more than 26% below its June 22 record.

The macro backdrop is also tighter. Reuters reported that markets are pricing in about a 25-basis-point Federal Reserve rate hike before year-end. Initial jobless claims stayed near multi-decade lows. Our Fed rate-hike explainer covers why the Fed is debating a hike.

The selloff did not hit the whole market. Reuters reported gains in Spotify (+11.1%), Blackstone (+8.4%), Lockheed Martin (+7.0%) and Procter & Gamble (+5.6%) after their results or outlooks. LSEG data showed that 83% of the 111 S&P 500 companies that had reported so far beat analyst expectations.

What it means

The drop shows that strong quarterly numbers are no longer enough for AI-linked companies. Investors are now looking closely at cash flow and capital spending plans. The next tests come next week, when Alphabet, Microsoft and Amazon report results. Their spending plans will be watched closely. For the full session, including yields and volatility, see our US stocks daily brief for October 22. For how the selloff carried into Friday's session, see our US stocks brief for Oct. 23.

Frequently asked questions

Why did the Nasdaq fall today?

On October 22, 2026, the Nasdaq Composite fell 2.6% because investors sold tech and chip stocks over renewed worries about AI spending after results from Meta and Tesla, according to Reuters and Yahoo Finance. Higher oil prices also weighed on sentiment.

How much did the Nasdaq drop on October 22, 2026?

The Nasdaq Composite closed down 694.00 points, or 2.60%, at 26,008.86, its steepest daily drop since early June, according to Reuters.

Why did Meta stock fall after beating earnings?

Meta shares fell 7.0% even after its results beat expectations. Reuters said the company reported its first cash outflow in more than a decade because of AI spending and announced a new non-voting share class to help raise capital.

Why did the Dow stay flat while the Nasdaq fell?

The selloff was concentrated in technology and semiconductor stocks, which dominate the Nasdaq. The Dow edged up 0.02% as companies such as Procter & Gamble and Lockheed Martin rose after their results, according to Reuters.