U.S. stocks fell sharply on Thursday, October 22, 2026, as renewed doubts about artificial-intelligence spending combined with an oil price spike tied to Middle East tensions. The Nasdaq Composite dropped 2.1%, the S&P 500 fell 1.2% and the Dow Jones slipped 0.2%, Yahoo Finance reported, while Brent crude climbed above $112 a barrel, its highest level since May, according to RTE.
AI Stocks Lead a Broad Wall Street Selloff
U.S. stocks declined sharply on Thursday, October 22, 2026, as renewed doubts about heavy spending on artificial intelligence combined with a jump in oil prices to unsettle investors, according to Yahoo Finance. The Nasdaq Composite, which is weighted toward technology companies, fell 2.1% to 26,153.29, down 549.57 points. The S&P 500 dropped 1.2% to 7,667.98, while the Dow Jones Industrial Average slipped a more modest 0.2% to 52,766.12.
The declines came even though two closely watched AI-linked companies, Tesla and Meta Platforms, both beat Wall Street's third-quarter earnings estimates, Yahoo Finance reported. Tesla posted adjusted earnings of $0.48 a share against a $0.44 estimate, on revenue of $28.05 billion versus a $28.13 billion consensus. Meta's revenue rose 26% year-over-year to $64.6 billion, above the $63.3 billion analysts had expected, according to a KuCoin News summary of the results. Despite the beats, both Tesla and Meta shares fell more than 3% at Thursday's open, Yahoo Finance said, as investors focused on the companies' spending plans rather than their latest results.
Semiconductor stocks were hit hardest. The iShares Semiconductor ETF fell about 4%, Yahoo Finance reported, with Lam Research down 9%, Applied Materials and KLA each down roughly 6%, and AMD, Intel and Sandisk each losing 4% to 5%. The pullback came even as the U.S. labor market showed continued strength: weekly jobless claims fell to 194,000, the lowest level in three months, according to the same report.
How Major U.S. Stock Indexes Moved on October 22, 2026 (Yahoo Finance)
Index
Change
Points
Closing level
Dow Jones Industrial Average
-0.2%
-89.97
52,766.12
S&P 500
-1.2%
-89.19
7,667.98
Nasdaq Composite
-2.1%
-549.57
26,153.29
Meta's AI Spending Turns Cash Flow Negative
Behind the stock-specific moves was a milestone in Meta's finances. The company spent $34.91 billion on capital expenditure in the third quarter alone, mostly on data centers and AI computing equipment, more than the $32.79 billion its operations generated in cash, KuCoin News reported. That left Meta with negative free cash flow of $2.12 billion, compared with positive free cash flow of $10.63 billion a year earlier. KuCoin News and Seeking Alpha both reported it was the first quarter of negative free cash flow since Meta's 2012 initial public offering. Meta also raised its full-year capital-spending guidance to a range of $135 billion to $145 billion, and its long-term debt rose from $58.7 billion to $80.9 billion as it borrows to fund its AI buildout, KuCoin News said.
Oil Jumps to a Five-Month High on Iran Tensions
Oil prices climbed at the same time, adding to the pressure on stocks. Brent crude rose 2.9% to $112.01 a barrel and touched $112.68 intraday, its highest level since May 18, while U.S. West Texas Intermediate crude gained 2.5% to $99.56 a barrel, peaking at $100.09, Irish broadcaster RTE reported. A separate report from financial news site tippinsights put Brent at $111.74, up 2.68%, and WTI at $99.30, up 2.21%, at another point in the trading session, a modest gap that reflects the timing of each snapshot during a volatile day.
RTE reported that the increases followed Houthi attacks on Saudi Arabia that damaged oil infrastructure, as well as attacks on vessels in the Strait of Hormuz; Yahoo Finance similarly cited attacks at a Saudi airport and an Aramco oil field. Saudi Aramco told staff to work remotely, RTE said, and the U.S. State Department ordered non-emergency government personnel and their families to leave Saudi Arabia, citing increased Houthi attacks on civilian targets, according to both RTE and tippinsights. Separately, Yahoo Finance, RTE and tippinsights all cited reporting, including by the New York Times, that the United States and Israel have drawn up plans for renewed strikes on Iran after the November 3 U.S. midterm elections.
No de-escalation is anticipated until the US midterm elections, which should keep oil prices elevated.
— Tamas Varga, analyst at PVM Oil, quoted by RTE
Background: A Year of Oil Shocks Tied to the Iran War
Thursday's price surge extended a pattern that has run through much of 2026. Conflict between Iran and a U.S.-Israeli coalition, which traces to late February 2026 according to Wikipedia's summary of the episode, has repeatedly disrupted oil markets; the International Energy Agency has described it as the largest supply disruption in the history of the global oil market, per the same summary. Brent crude surged in early March, peaked near $118 a barrel in late March, fell back to around $70 by July 1, rebounded above $100 in late July, and climbed to $109 in early September before Thursday's move toward $112.
Nasdaq Composite -2.1%, S&P 500 -1.2%, Dow Jones -0.2% on Oct. 22, 2026, according to Yahoo Finance.
Brent crude topped $112 a barrel, its highest since May, amid reported US-Israeli plans for renewed Iran strikes.
Meta posted its first negative free cash flow since its 2012 IPO after $34.9 billion in quarterly AI capital spending.
Semiconductor stocks fell sharply, led by a 9% drop in Lam Research.
U.S. weekly jobless claims fell to a three-month low of 194,000, suggesting the labor market remained resilient despite the selloff.
Questions
What caused the stock market drop on October 22, 2026?
Yahoo Finance attributed the decline to an unwinding of the AI trade combined with geopolitical tensions, as a jump in oil prices and lingering doubts about the returns on heavy AI spending weighed on sentiment.
How much did the Dow, S&P 500 and Nasdaq fall?
According to Yahoo Finance, the Dow Jones Industrial Average fell 0.2% to 52,766.12, the S&P 500 dropped 1.2% to 7,667.98, and the Nasdaq Composite fell 2.1% to 26,153.29.
Why did oil prices jump to a five-month high?
RTE and tippinsights reported that Brent crude rose above $112 a barrel after Houthi attacks on Saudi Arabia, incidents in the Strait of Hormuz, and reports that the United States and Israel are preparing renewed strikes on Iran after the November 3 midterm elections.
What happened with Meta's and Tesla's earnings?
Both companies beat Wall Street's third-quarter estimates, per Yahoo Finance and KuCoin News, but their shares still fell more than 3% as investors focused on rising AI capital spending; Meta reported its first negative free cash flow since its 2012 IPO.
Which stocks were hit hardest in the selloff?
Semiconductor shares led the declines, Yahoo Finance reported, with the iShares Semiconductor ETF down about 4% and Lam Research falling 9%.
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