Nasdaq Futures Sink as AI Doubts Return and Brent Oil Tops $111
Wall Street was set for a lower open Thursday as Meta, Tesla and IBM results revived AI worries and attacks in Saudi Arabia pushed Brent crude above $111.
U.S. stock futures fell sharply before the opening bell on Thursday, Oct. 22, as quarterly results from Meta Platforms, Tesla and IBM failed to calm investor doubts about the payoff from artificial intelligence spending, and a new wave of attacks in Saudi Arabia drove oil prices to their highest levels in about five months. Technology and chip stocks led the declines, while investors moved into U.S. government bonds.
As of 8:38 a.m. ET, Nasdaq 100 E-mini futures were down 482 points, or 1.61%, S&P 500 E-minis had lost 73.25 points, or 0.94%, and Dow E-minis were off 273 points, or 0.51%, Reuters reported. E-minis are futures contracts that track the major indexes and trade before the regular session begins. Yahoo Finance reported similar early losses, with Nasdaq 100 futures down about 1.7% and S&P 500 futures down about 1%.
What happened
The selloff reversed part of Wednesday’s rally, when the Nasdaq led gains on strong results from SpaceX and Super Micro Computer. On Thursday morning, the AI trade came under pressure again.
Meta shares fell 2.4% in premarket trading after the Facebook and Instagram owner introduced a new class of non-voting shares that Reuters said would help fund its costly AI expansion. Yahoo Finance reported that Meta’s results beat estimates and that the company announced a 2-for-1 stock split giving holders of its Class A stock one non-voting Class C share each.
Tesla slipped 3.5% after the electric-vehicle maker cut its annual capital spending forecast, according to Reuters. Yahoo Finance reported that Tesla posted adjusted earnings of $0.48 a share, above the $0.44 analysts expected, on revenue of $28.05 billion, slightly short of the $28.13 billion Bloomberg consensus. Investors were weighing lower spending this year against heavier outlays planned for 2027 and 2028.
IBM was the standout decliner among large companies, down 6.6% before the bell even after beating third-quarter expectations and raising its annual software revenue forecast, Reuters said. Yahoo Finance noted that IBM’s chief financial officer, Jim Kavanaugh, said roughly a quarter of the company’s 9% software growth came from closing deals that had slipped from the second quarter.
Chipmakers also weakened. Intel fell 4.3%, and Advanced Micro Devices, Qualcomm, Marvell Technology, Broadcom and Micron Technology lost between 2.7% and 4.8%, according to Reuters. Nvidia and Amazon each slid about 2%.
"There’s definitely some healthy skepticism in the AI space right now," Brendon Dashiell, a portfolio manager for investment research at Bogart Wealth, told Reuters. He said lofty valuations leave AI-linked stocks exposed to steep drops on any stumble.
Oil and the Middle East
Energy markets added to the pressure. Brent crude, the international oil benchmark, rose more than 2.8% to about $111 a barrel, near a five-month high, Reuters reported, while Yahoo Finance said Brent had topped $111 for the first time since May. Türkiye Today put Brent at $112.30 and U.S. West Texas Intermediate crude at $99.90 as of 8:50 a.m. GMT, a sign of how quickly prices were moving.
The gains followed further attacks inside Saudi Arabia. The Saudi Energy Ministry said air defenses intercepted a drone aimed at a facility at Saudi Aramco’s Shaybah oil field on Wednesday, with falling debris killing two people, and Saudi aviation authorities reported two people killed and eight injured at King Fahd International Airport in Dammam, Türkiye Today reported. Casualty counts for the Dammam attack varied in early reports. Reuters attributed the latest strikes to Yemen’s Iran-aligned Houthi movement, which had claimed attacks on several Saudi sites earlier in the week.
The U.S. State Department ordered non-emergency government staff and their families to leave Saudi Arabia. Separately, Yahoo Finance cited a New York Times report, based on unnamed U.S. officials, that the U.S. and Israel have drawn up plans for renewed strikes on Iran after the Nov. 3 midterm elections.
Bonds, gold and the Fed
Investors sought safety in Treasurys. The 10-year Treasury yield fell to about 5.04%, according to Reuters and Yahoo Finance. Gold fell about 1.3% to roughly $4,097 an ounce and bitcoin dropped about 2.6%, according to market data shown by Yahoo Finance, while the CBOE Volatility Index, Wall Street’s so-called fear gauge, rose about 8%.
Weekly jobless claims unexpectedly fell, pointing to a resilient labor market and supporting expectations that the Federal Reserve will hold interest rates steady at its meeting next week, Reuters said.
What comes next
Not every stock retreated. Spotify jumped 6.6% after forecasting fourth-quarter profit above estimates, while American Airlines fell 3.8% after projecting an annual loss as high jet fuel prices outpace fare increases, and Blackstone lost 3.2% after reporting lower quarterly earnings.
Overall corporate profits remain strong. Analysts expect third-quarter earnings for S&P 500 companies to grow 32.3%, up from a 30.7% estimate earlier, according to LSEG data cited by Reuters. Investors will be watching whether those results can offset rising energy costs and geopolitical risk. "We think markets will continue to be choppy, but we’re still cautiously optimistic," Dashiell said.
