The information technology sector faced significant headwinds on October 22 after earnings reports from Tesla and Meta Platforms renewed investor concerns about the cost of competing in the AI race.
Tesla cut its annual capital expenditure forecast after the market closed the previous day. Meta signaled higher spending to fund its AI push and announced a new class of non-voting stock.
The announcements overshadowed recent strong revenue figures and shifted attention to the risk that heavy infrastructure investment could weaken profitability and cash flow, with uncertain near-term returns. Rising oil prices linked to geopolitical tensions added to the risk-off mood.
In pre-market trading, Nasdaq 100 futures fell nearly 2%. Tesla shares dropped more than 5%, while Meta shares slipped almost 2%.
Selling spread across the Magnificent 7 and the broader semiconductor industry. Nvidia, Amazon, AMD, and Intel fell between 1.6% and 5.3%.