The S&P 500 and Nasdaq ended deep in negative territory on Thursday. The Nasdaq suffered the steeper loss, and the numbers below show why the Nasdaq tech selloff hit harder than the broader market.
What Drove the Nasdaq Tech Selloff on Thursday?
The Nasdaq Composite lost 694.00 points, or 2.60%, to 26,008.86. The S&P 500 lost 93.74 points, or 1.21%, to 7,663.43.
The blue-chip Dow Jones Industrial Average eked out a gain of 11.89 points, or 0.02%, to 52,867.98, minutes before the closing bell.
The Philadelphia SE Semiconductor Index (SOX) plunged 6.7%, its biggest daily percentage drop since June 23. The SOX is off more than 26% from its record closing high reached on June 22, yet it remains up 51.5% so far this year. The S&P 500 has risen 11.9% over the same period.
Paul Nolte, senior wealth adviser & market strategist at Murphy & Sylvest in Elmhurst, Illinois, said: “The only part of the market that is really suffering here is technology, which has been the golden child of the markets up until about June.”
Nolte added: “Investors are starting to realise that there are some holes in the AI story.”
Why Did Meta Shares Fall 7.0% Despite a Results Beat?
Meta Platforms’ results beat analyst expectations, yet its stock slid 7.0%. The Facebook parent posted its first cash outflow in more than a decade, driven by AI-related expenditures.
Meta also announced plans to issue non-voting shares in a two-for-one split to raise capital for the technology.
Tesla shares fell 3.1%, even though the electric car maker unexpectedly posted positive free cash flow in the quarter. Tesla also cut its 2026 capital spending plans.
Which Chip Stocks Tumbled More Than 8%?
- Intel, AMD, Sandisk and Marvell all tumbled more than 8% amid the broader semiconductor selloff.
- On the NYSE, advancing issues outnumbered decliners by 1.01-to-1, with 173 new highs and 366 new lows.
- On the Nasdaq, 2,022 stocks rose and 2,766 fell, a 1.37-to-1 decline ratio.
- The S&P 500 posted 40 new 52-week highs and four new lows. The Nasdaq Composite recorded 82 new highs and 342 new lows.
- Volume on US exchanges was 18.79 billion shares, against a 17.19 billion average for the full session over the last 20 trading days.
Which Earnings Beats Lifted Shares Like Spotify and Blackstone?
Third-quarter earnings season is well underway, with 111 S&P 500 companies reporting. Of those, 83% beat analyst expectations, according to the most recent LSEG data.
- Spotify rose 11.1% after forecasting fourth-quarter profit above Wall Street estimates, betting on AI-powered features to drive user growth.
- Blackstone advanced 8.4%, after saying widening credit spreads on AI-related debt could present an opportunity to lock in higher returns.
- Lockheed Martin climbed 7.0% after raising its annual sales and profit forecast.
- Procter & Gamble rose 5.6% after beating estimates, even as it warned that rising cost pressures would take an increasing bite out of profit.
- Union Pacific gained 3.6% on core pricing gains, although the railroad flagged a hit from rising fuel prices.
How Are Oil Prices and Rate Bets Shaping the Fed Outlook?
Iran-backed Houthis launched new strikes against Saudi targets, sending crude prices to a five-month high. Investors worried that Middle East strife could keep inflation hot.
Initial claims for unemployment benefits kept drifting near multi-decade lows, a sign of labour market stability. Financial markets are pricing in a 25 basis point rate hike by the US Federal Reserve before year-end.
Does This Source Cover Bursa Malaysia Stocks?
The source covers US trading only and names no Bursa-listed company. Malaysian investors tracking AI-linked names can compare their approach with our AI Stock Analysis for Malaysians guide.
Key Takeaways
- The Nasdaq fell 2.60% to 26,008.86, while the S&P 500 lost 1.21% to 7,663.43.
- Meta Platforms dropped 7.0% despite a results beat, after its first cash outflow in more than a decade.
- The SOX is off more than 26% from its June 22 record close but remains up 51.5% this year.
- 83% of the 111 S&P 500 companies that reported beat analyst expectations, according to LSEG data.
Disclaimer: This article is for information only and is not financial advice. Do your own research before making any investment decision.
Frequently Asked Questions
Why did the Nasdaq fall on Thursday?
The Nasdaq Composite lost 2.60% to 26,008.86 as revived AI doubts sparked a tech selloff. Microchip stocks dragged the index, and the SOX plunged 6.7%.
How much did Meta shares fall after its results?
Meta Platforms shares slid 7.0% even though its results beat analyst expectations. The drop followed its first cash outflow in more than a decade, linked to AI-related spending.
How did the S&P 500 close on Thursday?
The S&P 500 lost 93.74 points, or 1.21%, to close at 7,663.43. The index is still up 11.9% so far this year.
Is the Philadelphia semiconductor index still up this year?
The SOX remains up 51.5% so far this year, despite being off more than 26% from its record closing high on June 22. The index fell 6.7% on Thursday, its biggest daily drop since June 23.
Will the Fed raise interest rates again this year?
Financial markets are pricing in a 25 basis point rate hike by the US Federal Reserve before year-end. The move is linked to inflation concerns from ongoing Middle East strife.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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