The technology-led rally that briefly lifted Nasdaq 100 futures after strong results from SpaceX and Super Micro Computer gave way to a sharp reversal on Thursday, as fears over artificial intelligence spending and a jump in oil prices pushed major US equity indexes lower.
Nasdaq Composite dropped 2.60% to 26,008.86, its steepest daily decline since June, while the S&P 500 fell 1.21% to 7,663.43. The Dow Jones Industrial Average edged up 0.02% to 52,867.98. Technology shares led the selloff: Meta Platforms fell around 7% despite better-than-expected revenue, Advanced Micro Devices lost more than 8%, Micron Technology declined 6%, Nvidia lost 4%, and CoreWeave dropped more than 10%.
Earlier optimism had been driven by SpaceX reporting third-quarter revenue of $14.6 billion, up 161% year over year, and its first profit since listing in June, while Super Micro Computer raised its quarterly revenue guidance to $18.5 billion to $19.5 billion, well above the prior range of $14.5 billion to $15.5 billion. However, investors increasingly focused on the cost of AI infrastructure, financing burdens and rising capital expenditure.
Oil prices added to inflation concerns. Brent crude futures rose 3% to settle at $113.03 a barrel, and US West Texas Intermediate advanced 2.18% to $99.27 after reports that the US and Israel were considering renewed strikes against Iran and Iran-backed Houthi forces launched attacks against Saudi targets. US jobless claims remained near multi-decade lows, keeping the Federal Reserve's focus on inflation and leaving markets pricing in another 25-basis-point rate increase before the end of the year.
US CPI was 3.7% higher in September than a year earlier, up from 3.4% in August, while pending home sales fell 7.3% in September. Treasury yields fell as investors sought safety: the 10-year yield dropped more than 17 basis points to 4.974%, and the two-year yield fell more than 16 basis points to 4.66%.
“Strong numbers from SpaceX and Super Micro suggest AI demand remains strong, which has supported tech shares. But investors are also watching inflation. Higher energy prices are keeping pressure on the Fed, and the weaker housing data suggests that higher borrowing costs are already affecting the economy,” said Krisada Yoonaisil, Financial Markets Strategist at Exness.
For cryptocurrency markets, the broader risk-off tone and renewed uncertainty around Federal Reserve policy are likely to remain key sentiment drivers as investors await the Fed’s 28 October decision and the next round of tech earnings.
