Nasdaq Falls 2.6% and Chip Stocks Plunge as Brent Oil Jumps to $113 and Treasury Yields Slide

Wall Street split in two on Thursday. The Nasdaq Composite fell 2.6 percent to 26,008.86, its worst session since June, and the S&P 500 lost 1.21 percent to 7,663.43, while the Dow Jones Industrial Average edged up 11.89 points to 52,867.98, according to closing figures compiled by HDFC Sky.

The cause was a collision of two worries. Investors questioned how much the technology industry is spending on artificial intelligence, and oil jumped on reports that the United States and Israel are planning new strikes on Iran. That is a sharp reversal from Wednesday's rally, when AI earnings had lifted the Nasdaq more than 1 percent.

Why did chip stocks fall so hard?

The Philadelphia Semiconductor Index dropped 6.72 percent to 10,731.98. Lam Research fell 11.76 percent, CoreWeave 10.06 percent, Applied Materials 8.18 percent, Advanced Micro Devices 8.13 percent and Intel 8.03 percent. Nvidia lost 4.40 percent.

Meta Platforms, down 6.97 percent, was a focal point after it reported record revenue but also free cash flow below zero and a plan for a new class of non-voting shares, which we examine in our Meta earnings report. NBC News quoted Deutsche Bank's Henry Allen describing "another difficult 24 hours for markets," and said Nvidia chief executive Jensen Huang had called capital for the AI boom increasingly scarce. Tesla slipped 3.08 percent after cutting its annual capital spending forecast.

What happened to oil and bond yields?

Brent crude rose 4 percent to $113.17 a barrel and West Texas Intermediate gained 2.39 percent to $99.47, both the highest since early May. NBC News linked the move to a New York Times report that Washington and Jerusalem are preparing renewed strikes on Iran after the 3 November midterm elections, which we describe in our report on the plans.