Nasdaq Slumps 1.41% to 26,326.69 on Chip Selloff, Oil Surge

Mumbai, Oct 22: US stocks fell at the opening bell on Thursday, led by technology and semiconductor shares, as market participants digested earnings from Tesla and Meta Platforms while oil prices surged to a five-month high. The Nasdaq Composite (^IXIC) dropped 376.17 points, or 1.41%, to 26,326.69 at 9:35:43 AM EDT, after closing at 26,702.86 on Wednesday. The index opened at 26,308.41 and traded between 26,287.88 and 26,359.41, within a 52-week range of 20,690.25 to 27,722.75. Volume stood at 983,392,136, against an average volume of 8,131,094,531.

The Dow Jones Industrial Average (^DJI) slipped 130.01 points, or 0.25%, to 52,726.08 at 9:36:09 AM EDT, after a previous close of 52,856.09. The index opened at 52,788.41, traded between 52,531.40 and 52,788.41, and remained within a 52-week range of 45,057.28 to 54,744.33. Volume was 29,871,714, compared with an average volume of 448,318,437.

The S&P 500 (^GSPC) fell 63.26 points, or 0.82%, to 7,693.91 at 9:36:26 AM EDT, after closing at 7,757.17. It opened at 7,694.62, traded between 7,683.49 and 7,699.52, and held within a 52-week range of 6,316.91 to 7,844.52. Volume was 174,597,635, against an average volume of 5,063,044,687. The Russell 2000 Index (^RUT) was at 2,781.02, up 7.60 points, or 0.27%, after a previous close of 2,773.42. It opened at 2,780.33, traded between 2,772.32 and 2,791.72, and remained within a 52-week range of 2,303.46 to 3,069.71.

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The retreat followed a higher close on Wednesday, when the Dow rose 0.69% to 52,856.09, the S&P 500 added 0.58% to 7,757.17, the Nasdaq Composite climbed 1.05% to 26,702.86, and the Russell 2000 gained 0.27% to 2,781.02. The Nasdaq had added 278 points in that session. Wednesday’s gains were supported by strong profit reports from SpaceX, Capital One Financial and other companies, while Netflix fell 5.3% despite a stronger-than-expected profit as attention focused on slowing momentum.

Nasdaq Falls 1.41% as Chip Stocks Lead Broad Decline

The Nasdaq Composite’s 1.41% decline was driven by a broad selloff in chip and AI-linked shares. The iShares Semiconductor ETF (SOXX) fell about 4% in premarket trading, below Tuesday’s intraday low of $489.70, and was on track for its lowest close since 29 July. SOXX was also on course to flip direction for a fifth straight session, while the Nasdaq Composite was set for a seventh consecutive directional change.

Lam Research (LRCX) led the slide, down about 9% after its results on Wednesday night. Applied Materials (AMAT) and KLA (KLAC) were off about 6%, while AMD (AMD), Intel (INTC) and Sandisk (SNDK) fell 4% to 5%. Nvidia (NVDA) was off a milder 2%. At the opening bell, LRCX was down 10.25% to 234.07, AMAT was down 6.51%, KLAC was down 6.49%, AMD was down 5.47%, Intel was down 5.12%, and Nvidia was down 1.58%. Broadcom (AVGO) fell 2.71%, Micron (MU) slipped 2.11%, ASML (ASML) lost 3.61%, ARM (ARM) dropped 5.15%, Marvell (MRVL) fell 5.35%, and Qualcomm (QCOM) declined 1.68%.

The Roundhill Memory ETF (DRAM) dropped 4% before the bell, pulled lower by Micron, Sandisk, Seagate Technology (STX) and Western Digital (WDC). The Roundhill Magnificent Seven ETF (MAGS) was about 2% lower premarket, with a nearly 5% drop in Tesla shares following its earnings report weighing, while Meta slipped. Despite the selloff, semiconductor ETFs saw record flows over the past week, according to market data, and dip buyers continued to appear. Market strategists said every index is basically an AI index, leaving little room to hide.

CoreWeave fell nearly 4% amid concerns over AI financing and profitability. Nvidia CEO Jensen Huang said neocloud demand was “off the charts” but capital shortages were limiting growth. Industry research warned that up to $3.5 trillion in AI investment could be at risk, with over 80% of neoclouds potentially losing their independence by 2030. Meta’s premarket decline and renewed Iran-related risks also weighed on sentiment.

Dow Slips 0.25% to 52,726.08 as S&P 500 Drops 0.82%

The Dow’s 0.25% decline was milder than the Nasdaq’s, helped by gains in defensive and energy-linked names. Procter & Gamble (PG) rose 5.53% to 165.57, Lockheed Martin (LMT) gained 5.53% to 582.50, Chevron (CVX) added 0.75%, Coca-Cola (KO) rose 1.09%, Johnson & Johnson (JNJ) gained 0.70%, Merck (MRK) added 0.31%, UnitedHealth (UNH) rose 0.52%, and Walmart (WMT) gained 0.76%. On the downside, Caterpillar (CAT) fell 3.63%, IBM (IBM) dropped 2.75%, Cisco (CSCO) lost 1.41%, and Microsoft (MSFT) slipped 0.42%.

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In the S&P 500, LMT rose 7.97%, PG gained 5.43%, NEE added 1.90%, UNP rose 1.95%, and RTX gained 1.00%, while LRCX fell 10.12%, AMAT lost 6.51%, GLW dropped 5.75%, DELL fell 4.40%, ANET lost 4.41%, SNDK fell 4.42%, APH dropped 3.66%, ETN lost 4.20%, GEV fell 3.67%, CAT lost 3.63%, ABBV fell 1.88%, and NEM dropped 3.52%. The S&P 500’s 0.82% decline reflected weakness in technology, communication services and consumer cyclical shares, partly offset by gains in consumer defensive, healthcare and energy.

Tesla Falls 2.23% After Q3 Revenue Miss, Capex Cut

Tesla (TSLA) shares fell 2.23% to 377.54 at the opening bell after the electric vehicle maker reported mixed third-quarter results. Tesla, ticker TSLA, is an electric vehicle, energy storage and AI company headquartered in Austin, Texas. Revenue came in at $28.05 billion, slightly below the $28.13 billion consensus, while adjusted earnings per share were $0.48 against an estimate of $0.44. Adjusted EBITDA was $3.90 billion, above the $3.66 billion estimate.

Operating income of $718 million was 56% lower than a year earlier and about half the $1.47 billion expected. Tesla attributed the bulk of that miss to increased operating expenses driven by higher artificial intelligence investments, increased research and development spending, and lower revenues from regulatory credits and the energy storage division.

The company cut its full-year capital expenditure guidance to about $20 billion from more than $25 billion and revised the timeline for scaling the Optimus robot. Investors also weighed lower 2026 capex against higher spending in 2027 and 2028 on Optimus, Cybercab and Terafab.

Reports suggested that a merger between Tesla and SpaceX could potentially be announced as soon as the first half of 2027, with the companies carrying a combined market value of about $3.7 trillion, though independent committees had yet to agree on deal terms. SpaceX shares were down 2.5% before the bell after leading the Nasdaq 100 with an 8% advance on Wednesday following its first quarterly profit. Tesla had risen 3.4% on Wednesday.

Meta Slides 5.61% Despite $64.6 Billion Revenue and Stock Split

Meta Platforms (META) fell 5.61% at the opening bell even after the social media and artificial intelligence company, ticker META, headquartered in Menlo Park, California, reported quarterly revenue above expectations. Revenue climbed 26% to $64.6 billion, surpassing the $63.4 billion estimate. Earnings per share of $3.83 missed projections of $5.46 due to a $9.89 billion legal charge; excluding that charge, earnings would have been $7.40 a share.

The board approved a new class of non-voting Class C common stock to be distributed through a one-time stock dividend, effectively creating a 2-for-1 split. Meta said the fresh stock would help raise capital, structure employee compensation and fund potential acquisitions amid AI competition.

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CEO Mark Zuckerberg highlighted the success of Meta’s Muse, noting it had attracted over 10 million users in the US and Canada since its 8 September launch, with the company eyeing a billion users in the next few years. Investors weighed the fast-growing AI agent business against the mounting costs of funding its AI expansion.

Lam Research Sinks 10.25% as SOXX Falls 3.84% Below $490

Lam Research (LRCX) dropped 10.25% to 234.07 after reporting first-quarter 2027 earnings of $2.20 per share on revenue of $8.22 billion, against estimates of $2.18 per share and $8.15 billion. The chief financial officer said guidance “would have been a bit higher” without near-term supply constraints.

SOXX was down 3.84% to 490.74, below Tuesday’s intraday low of $489.70, which had been the floor of a bear trap — a breakdown that quickly reverses, catching traders betting on further losses. A close above $490 would keep the bulls’ hopes alive, barely.

The memory segment remained under pressure, with Western Digital (WDC) down 5.49%, Seagate (STX) down 4.66%, Micron down 2.11%, and Sandisk down 4.42%. Western Digital was scheduled to report results after markets closed, with analysts expecting first-quarter 2027 earnings of $4.08 per share and revenue of $4.13 billion. Western Digital shares were down 2.92% premarket.

Brent Tops $111 on Iran Strike Reports, WTI Above $98

Oil prices rose to their highest level since May after reports said the US and Israel had drawn up plans for renewed attacks on Iran after the 3 November mid-term elections. Brent crude (BZ=F) rose 3.25% to $112.36 a barrel, while West Texas Intermediate (CL=F) advanced 2.82% to $99.80. Brent had been bouncing between $97 and $112 in recent days on uncertainty about when the war with Iran would allow the global energy industry to return to normal.

Middle East tensions escalated after Saudi Arabia said it suffered attacks at the airport of Dammam and an Aramco oil field. Iran’s state television reported that seven oil tankers caught fire and were damaged in the Strait of Hormuz; if verified, it would be the largest number of vessels damaged in the waterway in a single day since the start of the Iran war on 28 February. President Donald Trump told reporters that Washington was not negotiating with Tehran and that something would happen “fairly soon.”

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Iranian Foreign Minister Abbas Araghchi said Tehran was willing to resume diplomacy with the Trump administration and would reconsider negotiations if Washington genuinely committed to building trust and reaching a fair agreement, adding that if the US chose war over diplomacy, it would result in an even greater strategic failure. The US State Department ordered some diplomats and family members to leave its missions in Saudi Arabia following Houthi attacks.

Jobless Claims Fall to 194,000, Lowest in Three Months

Initial filings for unemployment insurance slipped last week to their lowest level since mid-July. Claims totalled a seasonally adjusted 194,000 for the week ending 17 October, down 6,000 from the prior period and below the 200,000 consensus. That was the lowest total since 18 July as employers remained reluctant to let go of employees even as hiring slowed.

Continuing claims, which run a week behind, rose 25,000 to 1.73 million. The four-week average dropped slightly to 197,750. Weekly claims have stayed historically low all year, consistently holding below 230,000. The labour market remains resilient despite rising energy costs caused by the ongoing conflict with Iran, though overall hiring has been slow, creating a low-fire, low-hire environment where monthly job growth averages 68,000 and unemployment stands at 4.2%.

10-Year Treasury Yield Drops to 5.048% on Safety Demand

US Treasury yields declined as market participants turned towards government bonds amid pressure on equities. The benchmark 10-year Treasury yield fell more than 9 basis points to 5.048%, while the two-year yield shed 9 basis points to 4.733%. The 30-year Treasury yield was 5.377%.

The iShares 20+ Year Treasury Bond ETF (TLT) was up 0.55%. Market pricing showed an 87.3% likelihood that the Federal Reserve would keep interest rates unchanged after its October meeting, while December was less certain. The US dollar index, which tracks the value of the greenback against a basket of foreign currencies, slipped 0.1% to 101.64; it was later 0.17% lower at 101.5185.

The dollar fell to 157.22 Japanese yen from 158.14 yen late Wednesday, while the euro slipped to $1.1231 from $1.1233. Gold futures fell 1.1% to $4,105 an ounce, while spot gold fell 1.36% to $4,085. Bitcoin declined to roughly $82,000 from overnight highs around $84,800, and was later at $81,722, down nearly 1.5% over 24 hours. The CBOE Volatility Index rose 1.57 points to 18.25 after three straight sessions of losses.

Spotify Jumps 10.85% While Lockheed Martin Gains 5.53%

Spotify Technology (SPOT) shares jumped 10.85% to 582.00 despite a slight miss on both operating income and revenue in its third-quarter report. The company reported 306 million subscribers, slightly above estimates of 305.11 million, and its fourth-quarter operating income forecast came in above estimates. Lockheed Martin (LMT) rose 5.53% to 582.50 after the defence contractor reported better-than-expected third-quarter results and raised its 2026 earnings and revenue guidance.

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Lockheed now expects 2026 sales of about $80 billion to $82 billion, up from its previous outlook of $79.75 billion to $81.75 billion. Sales touched $20.6 billion, an increase of 11% from a year earlier, and the order backlog jumped to a record $292 billion, boosted by a $52.5 billion multiyear contract for PAC-3 missile interceptors. Procter & Gamble (PG) rose 5.53% to 165.57 after posting adjusted earnings of $2.00 per share on revenue of $23.28 billion, above the $1.88 and $22.80 billion estimates.

The Tide and Pampers parent raised its full-year revenue guidance to a range of 2% to 4%, up from 1% to 3%. Badger Meter (BMI) gained 5.47% to 139.33, CSX (CSX) rose 5.18% to 50.90, Nasdaq Inc. (NDAQ) added 5.04% to 100.96, Sasol (SSL) gained 4.91% to 16.99, Cloudflare (NET) rose 4.85% to 321.98, Palo Alto Networks (PANW) added 4.10% to 361.49, and Roper Technologies (ROP) gained 3.58% to 411.79.

Other gainers included ZGN at 13.38, up 3.56%; SentinelOne at 23.37, up 2.62%; Sony at 25.76, up 2.59%; Thomson Reuters at 118.70, up 2.98%; Kohl’s at 23.15, up 4.42%; and TLK at 12.10, up 2.72%. Biohaven (BHVN) led the gainers with a 36.59% rise to 16.06, while Allegion (ALLE) rose 8.19% to 171.90, Liberty Energy (LBRT) gained 6.63% to 17.77, Rentokil Initial (RTO) added 6.25% to 22.36, Waste Connections (WCN) rose 6.01% to 178.63, and Pool Corporation (POOL) gained 5.64% to 182.17.

TTM Technologies Sinks 20.22% as Kaiser Aluminum Falls 19.18%

TTM Technologies (TTMI) led the decliners, plunging 20.22% to $81.50, followed by Kaiser Aluminum (KALU), down 19.18% to $124.43, and Forgent Power Solutions (FPS), which fell 16.76% to $26.43. Carpenter Technology (CRS) dropped 15.00%, while Oceaneering International (OII) lost 13.32%.

Other notable losers included Lam Research, Hexcel (HXL), MSC Industrial Direct (MSM) and Graco (GGG), each declining more than 10%. In the Russell 2000, TTM Technologies fell 22.41%, Carpenter Technology dropped 14.49%, and FormFactor (FORM) declined 8.75%. Kratos Defense (KTOS), AeroVironment (AVAV) and Casella Waste Systems (CWST) bucked the trend, gaining 2.19%, 2.96% and 2.84%, respectively.

IBM Slips 2.75% Despite Q3 Beat and 4-5% Revenue Guidance

IBM (IBM) fell 2.75% to 244.15 after the company beat top- and bottom-line estimates and raised its full-year free cash flow forecast but maintained its 4% to 5% revenue growth guidance for 2026. Software revenue accelerated by 9%, but the chief financial officer said about a quarter of that growth came from closing “tens of slip deals” delayed from the second quarter, suggesting third-quarter software growth was partly driven by delayed revenue rather than entirely by new demand.

American Airlines (AAL) fell about 4% premarket after forecasting deeper losses this year as record revenue failed to help the airline recover from a spike in fuel costs. The carrier plans to slow capacity growth next year and expects to lose between $1 and $1.60 a share on an adjusted basis for the full year, compared with a previous forecast ranging from a loss of 65 cents to a profit of 65 cents.

Union Pacific reported a jump in third-quarter adjusted profit, helped by higher fuel surcharge revenue and core pricing strength, which more than offset cost pressures. Honeywell, Norfolk Southern, Comcast and Valero Energy were also among companies reporting. After the close, Bloom Energy, Deckers Outdoor, MaxLinear and Western Digital were on the earnings calendar. Reports said AI developer Anthropic could file for an initial public offering as soon as Friday.

Bitcoin Falls to $82,000 as VIX Rises to 18.25

Crypto-tied stocks, including Strategy (MSTR), Mara Holdings (MARA), Coinbase Global (COIN) and Robinhood Markets (HOOD), fell sharply as the price of bitcoin declined to roughly $82,000 from overnight highs around $84,800. The broader risk-off mood extended beyond technology stocks, with the CBOE Volatility Index rising 1.57 points to 18.25 after three straight sessions of losses.

The SPDR S&P 500 ETF Trust (SPY) was down 0.87% at $766.37, while the Invesco QQQ Trust (QQQ) declined 1.52% to $714.20. The State Street SPDR Dow Jones Industrial Average ETF Trust (DIA) was also lower. US equity futures had pointed sharply lower before the open, with Nasdaq-100 futures down 1.6%, S&P 500 futures down 0.9% and Dow futures down 0.6%. On the economic calendar, September leading indicators were due at 10:00 a.m. ET, the October Kansas City Fed manufacturing survey at 11:00 a.m. ET, and S&P Global Purchasing Managers’ Indexes for manufacturing and services alongside the University of Michigan consumer sentiment survey on Friday.

Market participants will monitor oil prices around $111 Brent and $98 WTI, the 10-year Treasury yield near 5.048%, chip ETF SOXX around $490, and upcoming earnings from Western Digital, Honeywell, Comcast and Valero. They will also watch jobless claims data, Fed rate expectations, Iran-related developments and the 3 November mid-term elections for fresh direction.

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