Meta Platforms reported profits above analyst expectations, and its shares still finished 7.0% lower. The pressure came from the cash statement: the Facebook parent posted its first cash outflow in more than a decade, a result of its spending on artificial intelligence, and said it would issue non-voting stock through a two-for-one split to fund more of that spending.
That pattern, solid earnings paired with very heavy investment, shaped Thursday's session in the United States. The selling concentrated in the part of the market that has led this year's advance rather than spreading evenly across sectors.
Key numbers
- 2.60% the Nasdaq Composite's fall on Thursday, 694.00 points, to 26,008.86
- 1.21% the S&P 500's fall, 93.74 points, to 7,663.43
- 6.7% the drop in the Philadelphia SE Semiconductor Index, its sharpest one-day percentage decline since 23 June
- 0.02% the Dow Jones Industrial Average's gain, 11.89 points, to 52,867.98
Chipmakers carried the decline
Semiconductors did most of the damage. Intel, AMD, Sandisk and Marvell each shed more than 8%, according to the report carried by Free Malaysia Today.
The scale of the move is easier to read against where the sector started. The semiconductor index, commonly called the SOX, now sits more than 26% below the record close it set on 22 June, yet it is still 51.5% higher so far this year. The S&P 500 is up 11.9% over the same stretch.
Tesla fell 3.1%, even after the carmaker reported unexpected positive free cash flow for the quarter and trimmed its 2026 capital spending plans.
"Investors are starting to realise that there are some holes in the AI story," said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest in Elmhurst, Illinois. He described technology as the one part of the market under real strain, after leading gains until around June.
In plain words: the S&P 500 and the Nasdaq weight their members by market value, so the largest companies move the index most. Technology and chip names are now among the biggest of them. When that cluster falls together, a headline index can close well down even on a day when roughly as many stocks rose as fell.
Plenty of stocks outside technology rose
Breadth tells the other half of the story. On the New York Stock Exchange, advancing issues slightly outnumbered declining ones, by 1.01 to 1, while the Nasdaq saw 2,766 stocks fall against 2,022 that gained. Volume across US exchanges reached 18.79 billion shares, above the 17.19 billion full-session average of the previous 20 trading days.
Several earnings reactions ran the other way. Procter & Gamble rose 5.6% after topping estimates while cautioning that higher costs would eat further into profit. Lockheed Martin added 7.0% after raising its annual sales and profit forecast. Spotify gained 11.1% after guiding fourth-quarter profit above Wall Street estimates, pointing to AI-powered features to attract users. Union Pacific advanced 3.6% on a quarterly beat helped by core pricing, though the railroad flagged higher fuel costs.
Across the index, 111 S&P 500 companies had reported third-quarter results, and 83% of them came in above analyst estimates, according to LSEG data cited in the report.
Oil and the labor data sat in the background
Houthi forces, which the report describes as backed by Iran, launched fresh attacks on Saudi targets, and crude prices reached a five-month high. The concern described in the reporting is that a prolonged conflict in the Middle East keeps inflation elevated and complicates the US Federal Reserve's decisions on interest rates.
Labor Department figures, meanwhile, showed initial claims for unemployment benefits still hovering close to multi-decade lows. I read the session summaries as consistent on that point: the labor data was steady, and the day's movement came from earnings and the chip complex, not from the economic calendar.