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U.S. stocks mostly fell Thursday, with the Nasdaq Composite down 2.6% to 26,008 as Meta dropped 7% after reporting earnings and raising the lower end of its capital spending outlook. Investors also weighed higher oil prices and concerns about inflation and interest rates before next week’s Federal Reserve meeting.
The Nasdaq Composite fell 694 points, or 2.6%, to 26,008 on Thursday, as Meta Platforms shares slumped after the company reported earnings and lifted its capital spending outlook. The broader technology sell-off came amid concern about the cost of artificial intelligence investment and ahead of next week’s Federal Reserve meeting, while higher oil prices added to inflation worries.
The S&P 500 declined 1.2% to 7,663, while the Dow Jones Industrial Average edged up 0.02% to 52,867, leaving the major indexes with mixed results. Technology shares were among the session’s weakest performers after investors responded poorly to earnings from several large companies.
Meta fell 7%, its worst daily performance since July, and was one of the biggest drags on the Nasdaq. The company reported third-quarter revenue of $64.6 billion, above Wall Street’s estimate, and its fourth-quarter revenue forecast also exceeded expectations. Earnings of $3.83 per share, however, fell short of estimates, while free cash flow turned negative as spending on AI initiatives increased.
Meta raised the low end of its full-year capital expenditure forecast to $135 billion, from a previous range of $130 billion to $145 billion. Tesla also declined after results: the electric-vehicle maker fell 3.1% after reporting quarterly earnings and revenue above analysts’ estimates, but earnings were lower than a year earlier and operating expenses rose 39%. By contrast, Procter & Gamble gained 5.6% after reporting better-than-expected fiscal first-quarter results.
Thursday’s decline showed how investors are weighing technology companies’ earnings not only by revenue growth, but also by the cost of delivering it. Meta’s sales topped estimates, yet its earnings miss, negative free cash flow and larger expected investment in AI accompanied a sharp fall in its shares. The session’s market reaction underscores that substantial spending plans can unsettle investors even when revenue forecasts are strong.
The loss in the Nasdaq was broader than Meta alone: the source report described a sell-off across the technology sector after results from several of the largest technology companies. The index’s 2.6% fall contrasted with the Dow’s slight gain, illustrating how different index compositions can produce sharply different daily returns. The move matters to investors tracking technology-heavy portfolios, but one session does not establish a longer-term market trend.
Oil prices and the Fed outlook added another source of uncertainty. Higher crude prices can feed into inflation concerns, which investors watch when considering the path of interest rates. The source report described market participants as concerned about the effect of oil on inflation and rates before the central bank’s meeting next week; it did not establish what decision the Fed will make.
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Earnings, Oil and Fed Concerns
The sell-off followed a week of earnings from prominent U.S. companies, including members of the group commonly called the Magnificent 7. The source report said investor reactions to those results and worries about AI spending contributed to Thursday’s technology weakness. It did not provide a full breakdown of every company’s contribution to the Nasdaq’s decline.
Energy markets also moved during the session. Front-month West Texas Intermediate crude futures rose 3% to $100.06 a barrel, according to the report, and were up nearly 11% month to date. Oil climbed after President Donald Trump said late Wednesday that the United States was not currently negotiating with Iran to end the war in the Middle East. Those developments formed part of the backdrop to market concerns about inflation.
Meta also announced a planned share-class change. Its board approved the establishment of publicly traded, non-voting Class C shares, which the company said would be distributed to holders of its Class A common shares and Class B super-voting shares. Meta said the new shares are expected to begin trading in January 2027 and that the Class A share price would reflect the effect of a two-for-one stock split.
“The price of the Class A shares will “reflect the effect of a two-for-one stock split.””
— Meta Platforms
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Investor Response Remains Unsettled
It is not yet clear whether Thursday’s technology declines will continue, or whether investors will view the pullback as a short-term reaction to earnings and spending plans. The report gives closing index levels and individual share moves for the session, but does not establish the causes of every market move or quantify how much of the Nasdaq decline came from Meta.
The Fed’s next decision and its effect on markets remain unknown. The source describes concerns about oil, inflation and interest rates before next week’s meeting, but does not report a policy decision or a confirmed change in the rate outlook. Meta’s long-term returns from AI investment are also uncertain; UBS analyst Stephen Ju’s positive view is an attributed assessment, not a guaranteed outcome.
The report says Meta’s Class C shares are expected to start trading in January 2027. Further details about the distribution and the effect on individual shareholders were not provided in the source material.
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Fed Meeting and Earnings Ahead
Investors will look to next week’s Federal Reserve meeting for the central bank’s decision and its assessment of economic conditions. Inflation data and oil-price movements may also shape expectations, though the source report does not specify a particular upcoming data release or predict the Fed’s action.
Markets will continue to assess company results and spending plans as more earnings information becomes available. For Meta, investors are likely to track whether AI investment translates into revenue and advertising performance, alongside cash flow and capital expenditure. The company’s planned Class C shares are scheduled to begin trading in January 2027, according to its announcement.
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Key Questions
How much did the Nasdaq fall Thursday?
The Nasdaq Composite fell 694 points, or 2.6%, to 26,008 at Thursday’s close.
Why did Meta shares decline?
Meta fell 7% after earnings per share came in below estimates and free cash flow turned negative as AI spending increased. Its revenue and fourth-quarter revenue forecast exceeded Wall Street estimates, while the company raised the low end of its full-year capital expenditure outlook.
Did all major U.S. stock indexes fall?
No. The S&P 500 fell 1.2%, and the Nasdaq declined 2.6%, but the Dow rose 0.02% to 52,867.
What role did oil prices play in the market concerns?
Front-month WTI crude futures rose 3% to $100.06 a barrel, according to the report. Investors were concerned that higher oil prices could affect inflation and interest rates ahead of next week’s Federal Reserve meeting.
Meta’s board approved the creation of publicly traded, non-voting Class C shares, which the company said would be distributed to existing Class A and Class B shareholders. The shares are expected to begin trading in January 2027; further details were not included in the source report.
Source: rss
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