On a Thursday when American markets lost their footing, two long-running anxieties arrived together: the vast sums technology companies are pouring into artificial intelligence, and the renewed fear of conflict in the Middle East that pushes oil upward and inflation with it. Investors who once treated spending on the future as an act of faith now weigh it against cash that has begun to run thin, and against energy prices that quietly tax every household and business. The sell-off thus reads less as a single shock than as a reminder that the economy's hopes and its vulnerabilities are being tes
AI Spending Fears and Iran Strike Plans Rattle Markets as Nasdaq Slides 2% and Oil Jumps
Cash fleeing stocks seems to have found a home in the bond market
Mark
Two things hit at once on Thursday. Which one mattered more?
Mimi
The stock moves started with Meta. It showed negative free cash flow of $2.12 billion and lifted its capex floor to $135 billion, and the stock fell nearly 7%. Oil added to the pressure at the same time.
Mark
And the bond market?
Mimi
The 10-year yield fell more than 17 basis points to 4.972%, below 5% for the first time in about a month. That's the biggest one-day drop since March 2023.
Luke
Careful there. The reporting says cash seems to have moved into bonds. That's an inference, not something anyone confirmed.
Mark
What about the Iran report?
Mimi
The New York Times, citing U.S. officials, said the U.S. and Israel have drawn up specific plans for strikes after the midterms. Brent closed at $113.17.
Luke
Worth noting that it's a report of plans, not of a decision. We haven't seen the underlying documents, and the timing is attributed to unnamed officials.
Mark
Ackman sounds hopeful.
Mimi
He says 2027 will be amazing once both wars end and energy falls.
Luke
That's a forecast from one investor, and it depends entirely on the wars ending. Nothing in the reporting says when that happens.
Mark
And the Musk figures?
Luke
The $366 million and SpaceX numbers come from FEC filings and FedScout. The $1 billion Skydance figure rests on one anonymous person, so treat it as unconfirmed.
Le Pouls
- The Nasdaq slid more than 2% and the S&P 500 fell 1.2%, its sharpest drop since July, as nerves spread across the market.
- Meta tumbled nearly 7% after reporting negative free cash flow and lifting its capital spending floor to $135 billion.
- Brent crude jumped 4% to $113.17, its highest since May, after reports that US and Israeli militaries are planning renewed strikes on Iran following the midterms.
- Investors fled stocks for Treasuries, pushing the 10-year yield below 5% for the first time in about a month, while Ackman insists markets can rebound once energy prices and rates ease.
On a Thursday when American markets lost their footing, two long-running anxieties arrived together: the vast sums technology companies are pouring into artificial intelligence, and the renewed fear of conflict in the Middle East that pushes oil upward and inflation with it. Investors who once treated spending on the future as an act of faith now weigh it against cash that has begun to run thin, and against energy prices that quietly tax every household and business. The sell-off thus reads less as a single shock than as a reminder that the economy's hopes and its vulnerabilities are being tested at the same moment.
U.S. stocks sold off hard on Thursday, pressed from two directions at once. Investors worried about how much artificial intelligence companies are spending, and oil prices jumped on reports of military planning against Iran.
The tech-heavy Nasdaq fell more than 2%, its worst day since June, and the S&P 500 dropped 1.2%. Meta led the losses among major tech names, sliding nearly 7% after reporting negative free cash flow of $2.12 billion and raising its full-year capital expenditure floor to $135 billion.
Money leaving stocks moved into bonds, pushing the 10-year Treasury yield down more than 17 basis points to 4.972%. Oil moved the other way. Brent crude rose 4% to $113.17 a barrel, its highest since May, after a New York Times report said the U.S. and Israel had drawn up plans for renewed strikes on Iran after next month's midterm elections.
Amid the gloom, Bill Ackman remained hopeful. He said the wars in Ukraine and Iran, along with high inflation and interest rates, were holding back an otherwise booming market, and predicted an "amazing 2027" once the conflicts end and energy prices fall.
U.S. stocks sold off hard on Thursday, and the reasons arrived from two directions at once: worries over how much artificial intelligence companies are spending, and a jump in oil prices tied to reports of military planning against Iran.
The tech-heavy Nasdaq fell more than 2%, its worst day since June. The S&P 500 dropped 1.2%, its largest decline since July.
Meta led the losses among major tech names, sliding nearly 7%. In its third-quarter earnings, the company reported negative free cash flow of $2.12 billion. It also raised the floor of its full-year capital expenditure forecast. Meta now expects capex of $135 billion to $145 billion, up from a previous bottom of $130 billion.
Money leaving stocks appeared to move into bonds. The benchmark 10-year Treasury yield fell more than 17 basis points to 4.972%. That was the first time yields had dipped below 5% in about a month, and the biggest one-day drop since March 2023.
Oil moved the other way. Brent crude futures gained 4% to close at $113.17 a barrel, the highest for the international benchmark since May 4. West Texas Intermediate rose 2.4% to settle at $99.47, and both were higher again in early Asian trading. The rise followed a New York Times report, citing U.S. officials, that the U.S. and Israeli militaries have drawn up specific plans for renewed strikes on Iran after next month's midterm elections.
Elon Musk also remained in the headlines. According to FedScout, a research firm that tracks federal spending, SpaceX has collected at least $6.78 billion in federal work this year through Oct. 1, nearly double its total for all of 2024. Musk has meanwhile committed roughly $366 million to the 2026 election cycle across at least 40 races, making him the biggest individual donor of the midterms so far. A CNBC analysis of Federal Election Commission filings found at least $276 million of that has gone to Republican groups and his own political operation, America PAC, since July. A person familiar with the matter, speaking anonymously, said Musk has also invested roughly $1 billion in Skydance, part of a broader equity raise first reported by Semafor on Thursday.
Amid the gloom, Pershing Square CEO Bill Ackman struck an optimistic note about next year. He told CNBC's "Squawk on the Street" that the Ukraine-Russia and Iran wars, together with elevated inflation and interest rates, are holding back an otherwise "booming market environment." "We're going to have an amazing 2027," he said, adding that once both wars end, energy prices should fall, which would be "very good" for markets.
The oil backdrop explains the anxiety. Higher crude has pressured stocks all year, as traders fear that elevated energy costs will push up inflation and force the Federal Reserve to raise rates. U.S. oil is up 72% in 2026, and Brent has surged 83%. What to watch is whether energy prices keep climbing as the post-midterm Iran planning draws attention, and whether AI spending keeps eating into company cash flow.
Citations marquantes
We're going to have an amazing 2027.— Bill Ackman, Pershing Square CEO, on CNBC's Squawk on the Street
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