Nasdaq falls 2.6%, worst day since June, as Meta and chip stocks slide
Representative image: Gam-Ol / Pixabay
Nasdaq fell 2.6% to 26,008.86 on October 22, 2026, its worst day since June, as AI spending worries sank Meta about 7% and chip stocks; the Dow was flat.
What Happened
The Nasdaq Composite fell 2.6% to 26,008.86 on Thursday, October 22, 2026, its worst single-day drop since early June, as technology shares sold off over the cost of the artificial intelligence (AI) build-out and a rise in oil prices. The S&P 500 lost 93.74 points, or 1.21%, to 7,663.43, while the Dow Jones Industrial Average ended almost unchanged, up 11.89 points at 52,867.98. Meta Platforms fell about 7% a day after its quarterly results, despite beating revenue expectations.
Key Facts
- Nasdaq Composite: down 2.6% to 26,008.86, its steepest daily fall since early June 2026.
- S&P 500: down 93.74 points, or 1.21%, to 7,663.43.
- Dow Jones Industrial Average: up 11.89 points, or 0.02%, to 52,867.98.
- Meta Platforms: down about 7% after results that beat forecasts, as investors focused on how much money its AI plans will need and on a planned two-for-one split that creates non-voting shares.
- Chip stocks: Advanced Micro Devices fell more than 8%, Micron Technology about 6% and Nvidia about 4%.
- Tesla: down about 3% despite a quarter that was better than analysts expected.
- Bonds: investors moved into US government bonds, lowering expectations of another Federal Reserve rate rise in 2026.
Why It Matters
For most of the past two years, the biggest US technology companies have been rewarded by investors for spending heavily on AI. Thursday's session showed that patience is wearing thin. Meta's results were strong on revenue, but the company's comments about the very large sums still needed for AI data centres, and its plan to issue non-voting shares to help fund that expansion, made investors question when that spending will pay off. When one of the largest AI spenders is punished for its plans, investors start to reassess every company whose valuation depends on the same story.
The chipmakers fell hardest because their sales depend on that spending continuing. If the companies building AI data centres slow down or struggle to raise money, demand for the processors and memory chips made by Nvidia, AMD and Micron would weaken. Traders at Wells Fargo said comments by Nvidia's chief executive, Jensen Huang, about capital being scarce added to the nervousness, reviving worries about how willing lenders and investors are to keep financing AI projects.
Oil added a second source of pressure. Prices rose on supply fears linked to tensions in the Middle East. Higher oil raises costs for companies and consumers and can keep inflation elevated, which is bad news for shares in general. At the same time, the move into government bonds suggests investors were looking for safety, and it reduced bets that the Federal Reserve would raise interest rates again this year.
The Dow's flat finish shows that the selling was concentrated in technology rather than across the whole market. The Dow contains fewer high-growth tech names than the Nasdaq, and some investors moved money into steadier sectors rather than leaving the market.
For Indian investors, a sharp tech sell-off on Wall Street often sets the tone for Asian trading the next morning, particularly for Indian IT services shares, which earn much of their revenue from US clients, and for Indians who invest in US stocks through international funds or overseas investing platforms.
| Index | Close on October 22, 2026 | Change |
|---|---|---|
| Nasdaq Composite | 26,008.86 | down 2.6% |
| S&P 500 | 7,663.43 | down 93.74 points (1.21%) |
| Dow Jones Industrial Average | 52,867.98 | up 11.89 points (0.02%) |
Impact
Short-term: Technology and chip shares are likely to stay volatile as more large companies report quarterly results and update their spending plans. Oil prices and Middle East news will remain a second driver.
Long-term: If investors keep questioning the returns on AI spending, large technology companies may face pressure to slow their investment or show clearer profits from AI, which would affect chipmakers and data-centre suppliers worldwide.
Who is affected: Holders of US technology and chip shares, including Indian investors with overseas funds; companies that supply AI hardware; and global markets that take their lead from Wall Street.
Key Takeaway
On October 22, 2026, the Nasdaq Composite fell 2.6% to 26,008.86, its worst day since June, as worries over AI spending, led by a 7% drop in Meta, and higher oil prices hit technology shares.
Questions and Answers
Why did the Nasdaq fall on October 22, 2026?
The Nasdaq Composite dropped 2.6% to 26,008.86, its worst day since early June, because investors sold technology and chip shares over concerns about the high cost of AI spending, led by a roughly 7% fall in Meta, while higher oil prices added to the pressure.
Why did Meta shares fall after good results?
Meta beat revenue expectations, but investors focused on how much money it said its AI expansion will require and on its plan for a two-for-one split that issues non-voting shares to help fund that spending. The shares fell about 7% on October 22.
How did the Dow and S&P 500 close on October 22, 2026?
The S&P 500 fell 93.74 points, or 1.21%, to 7,663.43. The Dow Jones Industrial Average was almost flat, rising 11.89 points, or 0.02%, to 52,867.98, because it holds fewer high-growth technology companies.
Which chip stocks fell the most?
Advanced Micro Devices fell more than 8%, Micron Technology about 6% and Nvidia about 4%. Their sales depend on continued spending on AI data centres, so doubts about that spending hit them hard.
Disclaimer: Prepared by the Peepals newsroom from publicly available sources with AI assistance. Information is accurate to the best of our knowledge at the time of publication and may change. Images may be representative. Not professional advice. Report an error via our contact page.
Sourced and fact-checked by the Peepals Global Editorial Team
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