Nasdaq Tumbles on AI Spending Concerns and Jump in Oil Prices

The New York Stock Exchange saw trading activity on October 21, 2026, with stocks experiencing a decline due to renewed concerns surrounding the spending of artificial intelligence companies. This comes as oil prices surged following reports that the US and Israel have plans for renewed strikes against Iran after next month’s midterm elections.

Stocks tumbled on Thursday, driven by fears over the financial health of AI companies, particularly those in the neocloud segment. Neocloud leader CoreWeave saw its bond yields and credit default swaps remain elevated, leading to a decline of nearly 4%.

Nvidia CEO Jensen Huang’s comments about capital scarcity for the sector have been seen as spooking markets and reigniting concerns over AI financing. He stated that demand for neoclouds is ‘off the charts,’ but added that capital is scarce, impeding growth.

Wells Fargo traders noted in a note to clients that Meta’s comments on the large amount of funding needed for AI have caused shares to roll over and weighed heavily on overall market performance. They also pointed out that Huang’s commentary has reignited concerns around credit markets being full from a risk appetite standpoint.

JPMorgan traders observed that Wednesday’s bullish tone reversed overnight due to Meta shares rolling over in the premarket, along with increased chatter about renewed Iran kinetic-risk post US mid-term election. Additionally, they noted underlying price actions and feedback from their trading desk suggested a fragile narrative around AI financing concerns and lack of conviction/re-grossing from recent tech reversal.

Oil prices surged after The New York Times reported that the U.S. and Israel have plans for renewed strikes against Iran following next month’s midterm elections. Brent crude traded 2.7% higher at $111.77 per barrel, while WTI advanced 2% to $99.25 per barrel.

The jump in oil prices was driven by escalating geopolitical tensions in the region. President Donald Trump told reporters that Washington is not negotiating with Tehran and something will happen ‘fairly soon.’

Investors turned to U.S. Treasurys as a safe haven, leading to a drop in benchmark 10-year Treasury note yields by more than 9 basis points to 5.048%. The 2-year note yield also shed 9 basis points to trade at 4.733%.

CME Group shares advanced on JPMorgan’s upgrade of the stock from underweight to overweight, with a price target increase to $367 in December 2027. Analyst Kenneth Worthington described the current interest rate environment as ‘constructive’ for further growth in CME’s interest rate business.

Rollins reported weaker-than-expected third-quarter results due to continued challenges attracting residential customers. Revenue rose 6.2% from a year earlier, but adjusted earnings came in at 33 cents per share, below analysts’ expectations of 34 cents.

Lockheed Martin beat earnings expectations and raised its full-year forecast as missile demand surged. The company now expects sales of about $80 billion to $82 billion for 2026, up from its previous outlook of $79.75 billion to $81.75 billion.

Procter & Gamble shares added around 3% in premarket trading after the consumer goods company posted a beat on both top and bottom lines for its fiscal first quarter. Adjusted earnings came in at $2 per share, topping consensus estimates, while revenue exceeded expectations at $23.28 billion.

The jobless claims hit a three-month low amid a low-fire environment, with initial filings for unemployment insurance slipping to 194,000 for the week ending July 18. Continuing claims rose by 25,000 to 1.73 million.

President Donald Trump clarified that Washington is not negotiating with Iran but hinted at something happening ‘fairly soon.’ His comments come as investors worry about escalating tensions in the region following the midterm elections in November.

Nvidia CEO Jensen Huang stated that capital for the neocloud business model is scarce, citing a scarcity of capital and demand exceeding availability. An analysis from Gartner found that up to $3.5 trillion in investment spending could be at risk due to insufficient profitability for AI software.

Aevex rose over 11% after disputing a Bloomberg News report about performance issues with its GARC boat drone. Lockheed Martin shares also advanced, rising 3%, following better-than-expected results and increased guidance for 2026.

American Airlines forecast deeper losses this year due to record revenue failing to offset fuel costs. The carrier plans to slow capacity growth next year as a result, leading to a decline in its stock price by around 4% in premarket trading.

Spotify Technology delivered a slight miss on operating income and revenue compared to expectations but saw forecasts for the fourth quarter come in above estimates. U.S.-listed shares of the Swedish company were higher in premarket trading Thursday, rising more than 5% before the bell.

Hermes dropped nearly 7% after reporting third-quarter earnings highlighting a drop in demand from Chinese consumers. The French luxury brand saw total revenue rise 4.3% to $4.6 billion but flagged growth issues in some regions.

Asia stocks tumbled on Thursday, led by a sell-off in technology shares. Japan’s Nikkei 225 reversed earlier gains to decline 2.6%, while South Korea’s benchmark Kospi was down 3.52%. China’s CSI 300 index shed 1.8% and Hong Kong’s Hang Seng Index declined 3%.

European stocks opened in the red, with basic resources shedding 2.22% as travel and leisure stocks slumped 1.94%. Banks slipped 1.93%, while technology names were down 1.79%. Food and beverage stocks advanced more than 1%, however.

Nestlé CEO Philipp Navratil told CNBC that while third-quarter results were strong globally, the U.S. has been a tough market due to budget-strained consumers seeking value. He emphasized adapting portfolio prices for different budgets and consumer segments.

Defense electronics group Thales boosted its full-year outlook amid a major rearmament push among European defense primes. The company now expects organic sales growth toward the upper end of its guided range, potentially beyond 6% to 7%. Order intake rose 3% in the third quarter as customers ordered air defense radars and battlefield communications systems.

Barclays’ third-quarter pre-tax profit came in at £2.3 billion ($3.1 billion), up 12% year-on-year, and in line with LSEG-compiled forecasts of £2.3 billion.