U.S. tech stocks plunged sharply as investors grew increasingly concerned that the soaring spending in the artificial intelligence sector is unsustainable, with the Nasdaq dropping 2.6% on Thursday, marking its largest single-day decline since June. Apart from Apple, each of the Magnificent 7, which make up more than one-third of the overall market, saw substantial losses.
Meta's AI spending burden, higher capital expenditure, a swing to negative free cash flow, and plans to introduce a new class of shares added to the selling pressure. Further fueling market concerns over AI spending, NVIDIA's CEO stated that AI lacks sufficient capital to support the growth of so-called neoclouds. Shares of SpaceX, NVIDIA, and CoreWeave all declined, and the Philadelphia Semiconductor Index plunged 6.7%.
Concerns over AI spending hammered semiconductor and AI infrastructure companies, while money moved into safe-haven assets such as the U.S. 10-year Treasury, with questions over how companies will finance massive outlays on data centers and semiconductors, and when those investments will generate returns, triggering a broad selloff. The 10-year Treasury yield dropped 18.5 basis points to 4.961%, and investors rotated toward bonds amid the tech volatility.
Oil prices spiked Thursday as investors fear escalation in the Middle East with the U.S. reportedly planning to resume strikes against Iran, with Brent crude futures gaining 4% to close at $113.17 per barrel, the highest level for the international benchmark since May 4. The market's immediate reaction was to price in a meaningful geopolitical risk premium, given Iran's repeated threats to restrict traffic through the Strait of Hormuz, a chokepoint that handles roughly a fifth of all seaborne oil trade.
The number of Americans filing new claims for unemployment benefits dropped to near 57-year lows last week amid low layoffs, suggesting a modest pickup in job growth in October after September's underwhelming performance. The four-week moving average of claims, seen as a better measure of labor market trends as it irons out week-to-week volatility, dropped 1,000 to 197,750, the lowest level since 1969.
Tata Motors' biggest overseas acquisition hangs in fine balance as it needs approval from 80 percent Iveco shareholders, but three investors are yet to oblige, including hedge funds Davidson Kempner and Syquant Capital, and activist investor Petrus Advisers, who were reportedly unhappy with Tata Motors' initial offer of 14.1 euros per share for Iveco.
Technology antitrust remained a focus in Q3 2026 as regulators addressed AI development, algorithmic pricing, merger reviews, and dominant-firm conduct, with a new lawsuit challenging alleged coordination among leading AI developers to slow technological advancement. The European Commission emphasized it will continue to pay attention to acquisitions of AI startups by dominant technology companies, including killer acquisitions that could eliminate future competitors, with AI signaling as a priority for EU competition enforcement.
Coca-Cola retains WPP Open X globally, including India, while Omnicom replaces Publicis in North America for media mandate, with the new arrangements taking effect from December 1.
The Jio Platforms initial public offering, open from 21 to 23 October, closes today, raising approximately u20b930,213 crore with a price band of u20b91,065u20131,119 per share, previous record set by Hyundai Motor India at u20b927,870 crore in 2024. Jio Platforms is the company behind Reliance Jio's mobile network, home broadband and a growing line-up of AI-powered products.
The tech selloff on AI spending doubts signals that business owners in software, cloud services, and IT infrastructure may face softer demand in the near term as customers delay purchases pending clarity on AI ROI. Tech budgets will come under scrutiny. Conversely, tight labor markets remain an operator's asset: jobless claims near 60-year lows mean recruiting and retaining staff remains challenging, limiting wage deflation and supporting employer leverage in negotiations. Plan for sustained wage pressure.
Higher energy costs from Middle East geopolitical risk will flow through to operations, logistics, and supply chains over the next quarter. Brent crude above $113 per barrel translates to elevated fuel surcharges, shipping costs, and utility expenses. Small manufacturers and transportation businesses should lock in fuel contracts where possible and revise pricing for Q4 clients. Monitor Fed policy at next week's October 28 meeting for any rate decisions that could impact borrowing costs.