US technology stocks fell sharply on Thursday 22 October as investors questioned the scale of spending on artificial intelligence. The Nasdaq Composite fell 2.6%, its steepest one-day drop since a 4.2% fall on 5 June, and the S&P 500 fell 1.2%, its largest decline since 29 July, according to Al Jazeera. On Friday the S&P 500 slipped another 0.5%, which gave it a second straight weekly loss, the Associated Press reported. The question is whether this is the start of a deeper correction or a short burst of nerves.
The case that the selloff is a warning rests on the numbers behind the spending. Meta fell nearly 7% after raising its projected 2026 capital spending to between $135 billion and $145 billion, and its net profit fell short of expectations. Amazon dropped 4.6%, Nvidia 4.4%, Broadcom 4.3%, and Alphabet and Tesla 3.1% each, while Intel and Advanced Micro Devices each fell about 8%; Microsoft fell 2.2%. Apple, up 1.2%, was the only one of the “Magnificent 7” to rise. Gartner forecasts global AI investment of $2.7 trillion in 2026 and $3.6 trillion in 2027, and the Nasdaq now sits about 5.8% below its record high of 6 October. Asian markets echoed the fear on Friday, with Tokyo’s Nikkei 225 down more than 2% in the morning and Seoul’s Kospi dropping as much as 3.5%.
The case that it is a wobble rests on how contained the damage is. Jay Goldberg, senior analyst at Seaport Research Partners, said: “In short, nothing has changed. Investors have just decided to be afraid this week.” He added that there are “legitimate concerns about the AI trade” but that the shift reflects sentiment more than tangible reasons. The Nasdaq remains within 6% of its high, the S&P 500 is up about 12% this year, according to the AP, the S&P 500 trades at 19 times expected earnings, according to FactSet, and on Monday morning US stock futures pointed higher, with the Dow up 0.4% and the S&P 500 up 0.2%. The Nikkei and Kospi also recovered part of their early losses on Friday, the Kospi closing up 0.3%, and the Hang Seng gained 0.7%. On Monday the Nikkei 225 was down 0.8% at 62,189.65, with chip and tech stocks under renewed selling, and the Kospi was down 1.5% at 5,469.47. Treasury yields edged higher on Monday after sharp drops on Thursday, according to the AP. Stephen Innes of SPI Asset Management said the week was “less about broad conviction and more about proof.”
The stakes go beyond share prices. Technology companies account for most of the biggest share-price moves in the market, and Gartner’s forecast of $3.6 trillion of AI investment in 2027 shows how much spending now depends on the sector. Brent crude rose 4% on Thursday and passed $114.20 on Friday, its highest since May, so the stress on tech stocks came at the same time as higher energy costs.
The selloff did not change any company’s results, but it showed how sensitive the market has become to spending plans. This week’s earnings will test whether the doubts deepen or fade.