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Markets·Thursday, Oct. 22·After the close

Meta's AI bill sends tech stocks tumbling

Tech stocks had their worst day since June on Thursday after Meta's AI spending worries rattled investors, while oil climbed and people headed for safer places.

Written and checked by software

The story

The trouble started with Meta. CNBC reported that its ramped-up AI spending pushed its free cash flow negative, which means it spent more cash than it brought in. Investors began to question the bill for building out AI. Meta fell about 7%, and the Nasdaq dropped about 2.6%. The Dow ended basically flat.

Chip stocks got hit too. MarketWatch reported that Tesla cut a near-term spending target and Lam Research gave a weak outlook for its business. As tech slid, investors played it safe. MarketWatch reported they bought government bonds, which pushed the interest rate on the 10-year Treasury to about 4.95%, back under 5%. Yahoo Finance reported that money also moved into steadier stocks, like makers of groceries and household goods, health care and utilities.

Oil went the other way. Bloomberg reported that the Houthis stepped up attacks on Saudi Arabia and that Aramco evacuated its headquarters. Brent crude rose to around $113 a barrel, up nearly 4%. Heating oil futures jumped too, just as Maine's heating season starts. Those are wholesale prices, not what you pay for a delivery. Lower bond rates could ease mortgage rates a bit.

Also today

  • Moderna plunged after partial cancer-vaccine data leaked, even though the full data looked positive, CNBC reported.
  • Bitcoin fell about 3.2%, moving in step with the Nasdaq as investors sold riskier things.
  • Gold and silver also fell sharply, which is odd on a nervous day, and nothing we've seen explains why.

Storylines

  • AI spending reckoning: Meta's cash burn and the chip company outlooks drove the sharpest tech selloff since June.
  • Middle East war and oil: Houthi strikes on Saudi Arabia pushed Brent to a five-month high.
  • Treasury yields near 5%: Safety buying pulled the 10-year rate back under 5%.
  • Shift to steadier stocks: Grocery and household-goods makers and health care stocks sat near 52-week highs while the giants slid.

Temperature

Neutral · jittery: Tech took a hard hit and the market's fear gauge jumped 17%, but it's still in normal range and the broader market held up.

Where this came from

Written by software from that day's market data and the headlines cited below, checked against the numbers by code, and published without a person's review. Nothing here is advice.