US Stocks Close: Nasdaq Drops 2.6%, SOX Falls Over 6%; Jensen Huang's Remarks on Capital Shortage Spark Financing Concerns, Meta Drops 7% After Earnings

TradingKey - On Thursday, October 22, Eastern Time, US stocks fell, with tech and AI-related stocks coming under pressure. Meta disclosed massive future spending commitments, which, combined with comments from Nvidia CEO Jensen Huang regarding capital shortages, reignited market concerns over AI infrastructure financing and investment returns. Geopolitical tensions drove oil prices higher, also weighing on market sentiment.

At the close, the Dow Jones Industrial Average rose 0.02% to 52,867.98; the Nasdaq Composite Index fell 2.60% to 26,008.86; and the S&P 500 Index dropped 1.21% to 7,663.43.

Tech Stock Performance

Meta Platforms (META) fell 6.98% post-earnings to $648.85.

Although the company's revenue exceeded market expectations and it provided upbeat guidance, investors shifted their focus to expanding AI spending and future payment commitments. Meta disclosed that future lease and contractual expenditure commitments total approximately $825 billion, up from nearly $700 billion disclosed in July, with much of it involving AI computing power and infrastructure. This figure covers multi-year payment commitments rather than capital expenditures for a single year. According to data from ICE Data Services, Meta's five-year CDS quotes rose by up to 8.9 basis points intraday to around 119.3 basis points, reaching an intraday high since the contract began trading. The company's bonds also weakened relative to U.S. Treasuries, reflecting heightened investor concern over its financing and spending risks.

The performance of mega-cap tech stocks today is shown below:

The Philadelphia Semiconductor Index fell 6.72% to 10,731.98, its lowest level since July 29, 2026. All 30 constituents declined.

Company News

Elon Musk Said to Invest Around $1 Billion in Skydance

Elon Musk has invested around $1 billion in Skydance (SKYD) to fund cost cuts and advance business adjustments, Semafor reported, citing people familiar with the matter. The investment was completed around the same time as capital injections from other investors, including board member Laurene Powell Jobs. The report noted that Skydance Chief Executive David Ellison had previously been considering bringing in multiple wealthy investors. Musk has long-standing ties with the Ellison family, but Musk and Paramount did not immediately respond to requests for comment on the investment news.

Moderna Shares Fall Nearly 25% Intraday Amid Suspected Early Leak of Cancer Vaccine Data

Moderna (MRNA) fell nearly 25% intraday Thursday, while Merck (MRK) dropped about 3.7%. Trial data for an experimental cancer vaccine jointly developed by the two companies reportedly appeared prematurely on the medical website Oncology Central before being taken down. The full results were originally scheduled to be announced this Saturday at the European Society for Medical Oncology (ESMO) Congress. The briefly disclosed details indicated that the vaccine, when used in combination with Merck's cancer drug Keytruda, reduced the risk of melanoma recurrence or death. The two companies previously announced that the Phase 3 trial met its primary endpoint, with detailed results pending official release.

Barclays Plans to Cut Around 5,000 Jobs This Year as AI Helps Reduce Operating Costs

Barclays stated that it expects to cut about 5,000 jobs throughout 2026, representing roughly 5% of its global workforce. About 1,000 jobs were already cut in the first half of the year, with the remaining roughly 4,000 planned for the second half. The bank said it is reducing costs by simplifying its organizational structure and making structural adjustments to free up resources for future investment, with AI and other technologies enhancing operational efficiency.

Industry & Macro News

US Initial Jobless Claims Drop to 194,000, Hitting Three-Month Low

The U.S. Department of Labor reported Thursday that seasonally adjusted initial jobless claims for the week ended October 17 fell by 6,000 to 194,000, below economists' expectations of 200,000 and reaching the lowest level in three months. Meanwhile, continuing jobless claims for the week ended October 10 rose by 25,000 to 1.728 million. The two metrics cover different survey weeks; the decline in initial claims indicates that new layoffs remain limited, while the rise in continuing claims reflects an increase in the number of people receiving unemployment benefits.

JPMorgan: Semiconductor Long Positions Contract Significantly, Potentially Limiting Further Downside

JPMorgan global market strategist Nikolaos Panigirtzoglou and his team believe that the recent decline in the semiconductor sector indicates that most long positions have been unwound, including those of momentum investors. Although short-term headwinds persist, positioning adjustments may have limited room for further market declines. Regarding financing risks for emerging cloud companies, the team noted that while financing pressures do exist, robust demand for computing power may allow companies to pass some financing costs on to customers. Even if some firms struggle to secure further funding, the timing mismatch between capital expenditures and revenues will not necessarily disrupt the overall industry growth cycle.