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The Nasdaq Composite fell 2.6% Thursday, while Meta shares lost 7% after the company reported higher revenue but earnings below analysts’ expectations and raised the lower end of its capital-spending forecast. Technology stocks faced pressure amid concern about the cost of AI investment, rising oil prices and the Federal Reserve’s upcoming meeting. The Dow edged higher.
The Nasdaq Composite fell 694 points, or 2.6%, to 26,008 on Thursday, as Meta Platforms shares slid 7% following its earnings report and concerns about AI-related spending weighed on technology stocks. The S&P 500 dropped 1.2% to 7,663, while the Dow Jones Industrial Average rose 0.02% to 52,867, leaving the market with a split finish ahead of next week’s Federal Reserve meeting.
Meta was among the biggest drags on the Nasdaq, posting its worst one-day decline since July, according to the report. The company reported third-quarter revenue of $64.6 billion, above Wall Street’s estimate, and its fourth-quarter revenue forecast also topped expectations. But earnings of $3.83 a share fell short, and Meta’s free cash flow turned negative as spending on AI initiatives increased.
Meta raised the low end of its full-year capital-expenditure forecast. It now expects to spend $135 billion to $145 billion, compared with its previous range of $130 billion to $145 billion. Investors have been weighing the scale of that investment against the company’s near-term results and potential returns from AI products and advertising.
Tesla fell 3.1% after reporting third-quarter earnings of 48 cents per share on $28 billion in revenue. Revenue exceeded analysts’ expectations but was lower than a year earlier; operating expenses rose 39%, weighing on margins. Tesla also cut its full-year capital-spending forecast to $20 billion from $25 billion. Procter & Gamble moved in the other direction, gaining 5.6% after reporting fiscal first-quarter results above expectations. Morningstar data cited in the report showed it was the company’s strongest daily gain since March 2020.
The session showed how investor reactions to earnings can turn on more than revenue growth. Meta beat revenue estimates but missed on per-share earnings, reported negative free cash flow and raised its expected investment range. Those figures put the financial cost of its AI expansion at the center of the market response, even as an analyst quoted in the report argued that the investments could support future advertising and product growth.
The decline also came as traders assessed higher oil prices and the approaching Fed meeting. The report said oil-market moves were adding to concern about inflation and interest rates. That combination matters to investors because changes in expected borrowing costs and company spending plans can affect how markets value future earnings. Thursday’s index results were not uniform, however: the Dow edged up as technology weakness was partly offset by gains such as P&G’s.
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Earnings Meet Rising Oil Prices
The sell-off followed earnings reports from several large companies in the so-called Magnificent Seven, a group of major technology and growth stocks that can have substantial influence on the Nasdaq. The source report described the results as poorly received and said concern over AI spending contributed to pressure across the technology sector. It did not provide a full list of the group’s share-price moves.
Oil rose after President Donald Trump said late Wednesday that the United States was not currently negotiating with Iran to end the war in the Middle East, according to the report. Front-month West Texas Intermediate crude futures gained 3% to $100.06 a barrel and were up nearly 11% for the month to date. Investors were also looking ahead to next week’s Federal Reserve meeting, with concern that costlier oil could add to inflation pressures and affect the interest-rate outlook.
Meta also announced a proposed share-class change. Its board approved the creation of publicly traded, non-voting Class C shares to be distributed to holders of its Class A common stock and Class B super-voting shares. The report says the new shares are set to begin trading in January 2027, and Meta said the Class A share price would reflect a two-for-one stock split.
“reflect the effect of a two-for-one stock split”
— Meta Platforms, as quoted in the report
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Investor Concerns Still Developing
The report does not establish how much of Thursday’s Nasdaq decline was directly caused by Meta’s results, AI spending concerns, higher oil prices or positioning ahead of the Fed meeting. It describes these as factors weighing on sentiment, but does not quantify their individual effects. The market’s response is not proof that AI spending will fail to generate returns; the longer-term revenue impact remains uncertain.
The source also does not give the calendar date of Thursday’s session, the Fed’s expected policy decision, or the detailed market forecasts investors were using. Meta’s Class C share plan is described as approved by its board and scheduled to begin trading in January 2027, but the supplied account does not provide further details about the distribution mechanics or possible implementation conditions.
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Fed Decision and Meta’s Spending
Investors will look to next week’s Federal Reserve meeting for the latest policy decision and signals about inflation and interest rates. Oil prices, including whether WTI holds near or above $100 a barrel, will remain one factor in that outlook. The report does not state what decision markets expect from the Fed.
For Meta, attention is likely to remain on the cost of its AI plans, cash flow and whether those investments support advertising performance and adoption of AI products. The company’s stated capital-spending range is $135 billion to $145 billion for the year, while its planned Class C shares are scheduled to start trading in January 2027. Further market moves and company updates will show how investors reassess those plans; Thursday’s session alone does not settle their longer-term value.
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Key Questions
How much did the Nasdaq fall?
The Nasdaq Composite fell 694 points, or 2.6%, to 26,008 at Thursday’s close, according to the report.
Why did Meta shares drop?
Meta shares fell 7% after earnings. Revenue and the fourth-quarter revenue forecast beat Wall Street estimates, but earnings of $3.83 per share missed expectations, free cash flow turned negative, and the company raised the lower end of its capital-spending outlook.
What happened to the other major indexes?
The S&P 500 fell 1.2% to 7,663, while the Dow rose 0.02% to 52,867. The session therefore ended lower for the Nasdaq and S&P 500 but slightly higher for the Dow.
What role did oil prices play?
Front-month West Texas Intermediate crude futures rose 3% to $100.06 a barrel after President Donald Trump said the United States was not currently negotiating with Iran to end the Middle East war. The report said rising oil prices added to investor concern about inflation and interest rates ahead of next week’s Fed meeting.
Meta’s board approved publicly traded, non-voting Class C shares to be distributed to holders of its Class A common stock and Class B super-voting shares. The report says trading is scheduled to begin in January 2027; it does not provide further implementation details.
Source: rss
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