Meta’s plan to boost capex reignited investor concerns as more tech firms look to raise debt to fund AI growth.
- The S&P 500 ended Thursday 1.2% lower, the Nasdaq 100 slipped 2.9%, and the Dow Jones Industrial Average was flat.
- The Philadelphia Semiconductor Index dropped 7%.
- Renewed geopolitical concerns drove Brent crude prices up 4% to $113.17 per barrel.
The S&P 500 and Nasdaq ended lower on Thursday as fears of soaring capex among large hyperscalers, along with fresh geopolitical tensions pushing oil prices higher, dampened investor sentiment.
The S&P 500 ended Thursday 1.2% lower, the Nasdaq 100 slipped 2.9%, and the Dow Jones Industrial Average was flat. The Russell 2000, which tracks small-cap stocks, gained 0.1%.
However, index futures appear to have recovered slightly. Dow Jones Industrial Average futures advanced 36 points, or 0.07%. S&P 500 futures gained 0.07%, and Nasdaq-100 futures slipped 0.04%.
The SPDR S&P 500 ETF (SPY) fell 1.1%, and the SPDR Dow Jones Industrial Average ETF (DIA) added 0.1%. Meanwhile, the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) dropped 3% on Thursday.
Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF slumped between 6% and 7% on Thursday amid weakness in Micron Tech (MU), Nvidia (NVDA), Broadcom (AVGO), and most other silicon makers. The broader Vanguard Information Technology ETF (VGT) fell 3%.
Retail sentiment on Stocktwits for SPY, DIA and QQQ was ‘bearish’ with ‘high’ message volumes.
US Market Drivers
| Index | Move | Close |
| Dow Jones Industrial Average | Flat | 52,867.98 |
| S&P 500 | -1.2% | 7,663.43 |
| Nasdaq 100 | -2.9% | 28,958.69 |
Meta Platforms (META) share price eased about 6% on Thursday as investors turned anxious over the Instagram maker’s negative cash flow amid elevated capex to fund its AI ambitions.
The social media titan posted negative free cash flow while raising its baseline capital expenditure projections in its quarterly earnings filed after-hours on Wednesday, fueling Wall Street's scrutiny over ballooning technology costs.
Meta reported that its free cash flow fell to negative $2.12 billion during the quarter. Compounding these numbers, the company updated its full-year capital expenditure forecast, raising the floor of its projected spending range from $130 billion up to between $135 billion and $145 billion. These figures highlight an aggressive, capital-heavy strategy as the company races to scale its AI infrastructure.
“When you think about a bubble, you think about building capacity and then hoping the demand comes,” Blackstone President Jon Gray told Bloomberg Television after the firm reported its third-quarter results. “With AI, you’re building capacity, and you’re hoping you can keep up with the demand.”
Concurrently, crude prices surged following reports indicating that American and Israeli forces are preparing potential military action targeted at Iranian sites after the upcoming domestic midterms. President Donald Trump indicated on Wednesday evening that dialogue with Tehran remains off the table.
Global benchmark Brent crude gained 4% to finish at $113.17 a barrel, while West Texas Intermediate futures climbed 2.39% to reach $99.47 per barrel on Thursday.
Key Trending Stocks
Shares of SpaceX (SPCX) rose 1.4% after hours on Thursday following reports that it is pursuing agreements for a minimum of 80,000 cell sites across the United States as it advances plans to build a fourth nationwide wireless carrier.
Bloom Energy (BE) share price fell over 3% in after-hours trading on Thursday as a negative cash flow print for the quarter ending September spooked investors even after the fuel-cell manufacturer reported better-than-expected third-quarter earnings and raised full-year guidance.
Shares of Moderna (MRNA) slumped about 18% on Thursday after the company’s trial data on its melanoma vaccine, slated to be announced over the weekend, leaked and fell short of elevated Wall Street expectations.
Datadog Inc. (DDOG), a data organization software developer, has set its sights on expanding its security footprint with an attempt to acquire cloud security startup Upwind, as per an exclusive report by The Information.
Billionaire Elon Musk has reportedly invested about $1 billion in Skydance (SKYD), providing the entertainment company with fresh capital as it seeks to cut costs and support its share price after a costly merger that increased its debt pile.
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