U.S. markets saw a broad sell-off as investors reacted to rising artificial intelligence spending and increased geopolitical tensions. The tech-heavy Nasdaq tumbled over 2%, its worst single-day performance since June, while the S&P 500 dropped 1.2%, marking its steepest decline since July.
The downturn coincided with a surge in oil prices and a shift toward bond markets. Brent crude futures climbed 4% to close at $113.17 per barrel, the highest level for the benchmark since May 4, while the benchmark 10-year U.S. Treasury yield fell more than 17 basis points to 4.972%.
Meta Capital Expenditures Trigger Tech Slide
Meta led the losses among major technology firms, with shares slumping nearly 7% on Thursday. The decline followed the social media giant’s third-quarter earnings report, which showed negative free cash flow of $2.12 billion.
Meta raised the floor of its full-year capital expenditures, stating it now expects the range to be between $135 billion and $145 billion. This is an increase from the previous bottom range of $130 billion. The report intensified investor concerns regarding the high cost of AI infrastructure spending.
Geopolitical Tensions Drive Oil Prices Higher
Energy markets reacted to reports from the New York Times, which cited U.S. officials stating that U.S. and Israeli militaries have developed specific plans for renewed strikes on Iran. These strikes are reportedly planned for after next month’s midterm elections.
Brent crude futures reached $113.17 per barrel, while U.S. West Texas Intermediate gained 2.4% to settle at $99.47. The surge continued into early Asia trade. Higher crude prices have pressured stocks throughout the year, with U.S. oil up 72% and Brent crude up 83% in 2026.
Elon Musk Increases Federal Contracts and Political Spending
Did you know? The 10-year U.S. Treasury yield’s recent drop to 4.972% represents the biggest one-day decline since March 2023 and the first time yields dipped below 5% in about a month.
Pershing Square Forecasts 2027 Recovery
Despite current volatility, Pershing Square CEO Bill Ackman expressed optimism for the following year during a CNBC “Squawk on the Street” appearance. Ackman identified elevated inflation, high interest rates, and conflicts in Ukraine-Russia and Iran as the primary factors suppressing a “booming market environment.”
Ackman stated that the conclusion of these wars would lead to lower energy prices, which he believes will benefit the markets.
Market Data Comparison: 2026 Energy Trends
| Energy Benchmark | 2026 Price Increase | Recent Closing Price |
|---|---|---|
| Brent Crude | 83% | $113.17 |
| U.S. Oil (WTI) | 72% | $99.47 |
Market Volatility FAQs
Why did Meta’s stock drop despite AI growth?
Meta’s shares fell because the company reported negative free cash flow of $2.12 billion and increased its projected full-year capital expenditures to a range of $135 billion to $145 billion.
How is the U.S. Treasury yield reacting to the stock sell-off?
Investors moved capital from stocks to bonds, causing the 10-year U.S. Treasury yield to slide more than 17 basis points to 4.972%, the largest one-day drop since March 2023.
What is driving the current spike in oil prices?
Prices rose following reports that U.S. and Israeli militaries have plans for strikes on Iran after the midterm elections, pushing Brent crude to its highest level since May 4.
“We’re going to have an amazing 2027,” Ackman said.
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