Nasdaq drops 2.6% in its worst day since June as AI spending spooks investors
The Nasdaq lost 2.6% on Thursday, its biggest fall since 5 June. Meta and other companies spending billions on AI dragged it down.
Event: October 22, 2026
Primary source: October 22, 2026
Published here: October 22, 2026 at 09:10 PM UTC
Read: 2 min
What happened
On 22 October the Nasdaq Composite fell 694 points, or 2.6%, to 26,008.86. That is its worst day since 5 June. The S&P 500 lost 1.2%, while the Dow Jones closed almost flat. Meta shares fell 7%, Microsoft, Oracle, Alphabet and Amazon lost 2.2% to 4.6%. Chip stocks had their worst day since 23 June.
Why it matters to you
Investors worry the AI race costs too much and runs more and more on debt. Meta spent about $35bn on its build in one quarter and wants a new class of non-voting shares to raise money. If you own an S&P 500 or Nasdaq index fund, a big part of it is exactly these companies.
What to check and watch
Earnings from other big AI companies in the coming days. Whether they cut data centre spending. And whether the sell-off stops on Friday.
According to Nasdaq, the Nasdaq Composite closed on Thursday at 26,008.86, 694 points below Wednesday. A 2.6% drop is the index's biggest one-day fall since 5 June, when it lost 4.2%.
Investing.com called it a classic risk-off day. Investors sold tech and communication stocks and bought defensive shares and US government bonds. The S&P 500 fell 1.2% to 7,664.99. The Dow Jones closed almost flat at 52,866.85, held up by Procter & Gamble (up 5.6% after strong results) and Lockheed Martin (up 7%).
The main trigger was Meta. It reported on Wednesday evening. Its capital spending for the quarter, meaning money for data centres and equipment, was about $35bn. It narrowed its full-year forecast to $135-145bn, raising the low end from $130bn. It also announced a new class C of non-voting shares that could help raise money for AI. Meta stock fell 7%.
Other giants building AI followed: Microsoft, Oracle, Alphabet and Amazon lost 2.2% to 4.6%. Chip stocks had their worst day since 23 June. Tesla fell 3.1%.
One thing to keep straight: these companies are not earning less. The market is nervous about how much money goes into AI and when it pays off. There have been sell-offs like this earlier this year, and the market recovered after them. But there is no guarantee.
Confirmed facts
- On 22 October the Nasdaq Composite closed at 26,008.86, down 694 points or 2.6%.[1][2]
- It was the index's worst one-day fall since 5 June 2026.[1][2]
- The S&P 500 fell 1.2% to 7,664.99; the Dow Jones closed almost flat at 52,866.85.[2]
- Meta shares fell 7%; Microsoft, Oracle, Alphabet and Amazon lost 2.2% to 4.6%.[2]
- Meta's capital spending for the quarter was about $35bn; its full-year forecast was narrowed to $135-145bn.[2]
- Meta announced a new class C of non-voting shares.[2]
- Chip stocks had their worst day since 23 June.[2]
- Procter & Gamble rose 5.6%, Lockheed Martin 7%.[2]
Implications
- ConfirmedTech stocks are reacting most strongly to news about AI spending right now.
- Our readingIf other giants also fail to show when the spending pays off, pressure on AI stocks may continue.
- Our readingNasdaq and S&P 500 index funds depend heavily on a few AI companies, so they fall with them.
Still unknown
- Whether the sell-off continues on Friday.
- What other big AI companies say about spending in their results.
- When Meta shareholders vote on the new share class.
Who it affects
USA, Worldwide. People who hold tech stocks or S&P 500 and Nasdaq index funds
Sources
- Nasdaq: NASDAQ Composite Index (COMP) October 22, 2026 · official
- Investing.com: Nasdaq posts worst day since June as AI financing worries batter risk sentiment October 22, 2026 · media
Cover: Freekonomist graphic, a symbolic image, not a photo of the event. This is a news explainer, not financial advice.
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