Stock Market Midday, Oct. 22: Tech Weakness Drags Nasdaq Lower as AI Spending Concerns Mount

Source Motley_fool

As of 11:35 AM ET, the S&P 500 (SNPINDEX:^GSPC) is down 1.28% to 7,658, the Nasdaq Composite (NASDAQINDEX:^IXIC) is down 2.18% to 26,121 on tech weakness, and the Dow Jones Industrial Average (DJINDICES:^DJI) has slipped 0.23% to 52,736.

Gold is trading at $4,054.09, down 2.10% as of 11:31 AM ET, and the 10-Year Treasury yield is up 0.24% to 5.01%. Consumer defensive and utility stocks are the biggest gainers, while industrials and basic materials are dragging the market lower.

Today's biggest moves

Meta Platforms is dragging indexes lower, despite an earnings beat, as artificial intelligence (AI) spending concerns resurface. AI bellwether Nvidia fell, and memory stocks like Micron Technology also declined. Tesla slipped on profit concerns following its Q3 results. Conversely, Spotify soared over 9% on improved margins, and Dow Inc edged upwards after its quarterly results beat expectations.

What this means for investors

AI jitters are driving markets again today after Lam Research warned of supply chain constraints. Meanwhile, crude oil prices are surging again as fears of escalating geopolitical tensions grow. Data from the Labor Department showed unemployment claims fell to a three-month low last week, suggesting stable labor market conditions.

A CoreWeave downgrade put further pressure on AI stocks. It doesn't take a lot to spook already-nervous investors, and any signs that demand may fall or heavy capital spending won't pay off can quickly trigger a sell-off. For investors, it is important to tune out headline-driven noise and focus on the long-term outlook. Watch for earnings from Alphabet, Microsoft, and Amazon next week, as these will give more information on AI spending and demand.

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Emma Newbery has positions in Amazon, Nvidia, and Spotify Technology. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, International Business Machines, Lam Research, Meta Platforms, Micron Technology, Microsoft, Nvidia, Spotify Technology, and Tesla. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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