Asian stocks steady after AI doubts drive Nasdaq rout

Fresh doubts about the cost of the artificial intelligence boom sent technology stocks sharply lower on Thursday, October 22. The Nasdaq Composite fell 2.6%, its steepest daily drop since early June, after earnings from Meta and Tesla did little to calm investors worried about AI spending, Reuters reported. The selloff spread to Asia on Friday, but it eased as the session went on.reuters.com

The S&P 500 ↗ 0.21% lost 1.2% to close at 7,663.43, its worst day since July. The Dow Jones Industrial Average edged up 11.89 points, as about two of every three S&P 500 stocks rose even as heavyweight tech names fell, according to AP.apnews.com

Chips lead the rout

The Philadelphia SE Semiconductor Index PHLX Semiconductor Sector Index ↗ 0.87% dropped 6.7%, its biggest one-day fall since June 23. It now sits more than 26% below its June 22 record close. Intel ↗ 0.15%, AMD Advanced Micro Devices, Inc. ↗ 1.25%, Sandisk ↗ 6.07% and Marvell ↗ 2.25% each fell more than 8%, Reuters reported.finance.yahoo.com

Meta Platforms ↘ 1.09% fell 7% even though its revenue beat forecasts. The company reported its first cash outflow in more than a decade and said it would issue non-voting shares to help pay for AI. Tesla ↘ 1.58% dropped 3.1% after cutting its 2026 capital spending plans. Nvidia ↘ 0.35% fell 4.4% and was the biggest single drag on the S&P 500, while Lam Research ↗ 5.12% sank 11.8% and CoreWeave ↗ 1.11% lost 10.1%, AP reported.apnews.com

"Investors are starting to realize that there are some holes in the AI story," Paul Nolte of Murphy & Sylvest told Reuters. Defensive stocks held up. Procter & Gamble The Procter & Gamble Company ↗ 0.16% rose 5.6% after beating earnings estimates.finance.yahoo.com

Oil and bonds add to the pressure

Brent crude jumped 4% to $113.17 a barrel, its highest level in five months, as Houthi attacks on Saudi targets raised fears of supply disruptions. Investors bought Treasuries as a safe haven, pushing the 10-year yield down to 4.97%, AP reported.apnews.com

Asia wobbles, then steadies

On Thursday, South Korea's Kospi fell 3.5%, Hong Kong's Hang Seng lost 3%, and Japan's Nikkei 225 dropped 2.7%. On Friday, the Kospi fell as much as 4.1% early as SK Hynix ↗ 12.94% and Samsung Electronics slid. It then reversed to close 0.3% higher as chipmakers bounced back, Bloomberg reported. The Nikkei slipped 0.3% on Friday and ended the week down more than 4%, while the Hang Seng gained 0.7%, The Business Times reported.bloomberg.com+1

Before Friday's open, Nasdaq futures were slightly lower, and Brent rose further, to about $114.92, according to AP. Next week brings earnings from Microsoft ↘ 0.65%, Amazon Amazon.com, Inc. ↘ 0.17% and Alphabet ↗ 0.97%, along with a Federal Reserve policy decision, The Business Times noted.businesstimes.com.sg+1

"The equity market is increasingly pricing in the risk that the AI boom or bubble is coming to an end," said Tomoichiro Kubota of Matsui Securities, according to The Business Times.businesstimes.com.sg