Nasdaq Futures Tumble Nearly 600 Points as Meta and Tesla Earnings Revive AI Bubble Fears

Wall Street pointed to a sharply lower open on Thursday as investors dumped risk assets around the world, with futures tied to the Nasdaq Composite falling nearly 585 points and S&P 500 futures called 82 points lower. The selling followed mixed third-quarter earnings from Meta Platforms and Tesla that revived fears the artificial intelligence investment boom is overdone.

The flight to safety lifted Treasury bonds. The yield on the 10-year Treasury note dropped to 5.065%, the lowest in nearly a month, while the 30-year yield fell to 5.369%, according to Barron’s live market coverage.

Tech stocks were at the center of the decline. Meta, which had risen as much as 4% in after-hours trading on Wednesday, was set to fall 1.5% at the opening bell, while Tesla was called 5% lower. “Fears about an impending AI bubble continue to dog stock markets, with the AI selloff resuming in Asia today and US futures turning negative,” said Raffi Boyadjian, lead market analyst at Trading Point.

Oil climbs to a five-month high

Energy added to the pressure. Brent crude futures for December delivery jumped 3.1% to $112.18 a barrel, the global benchmark’s highest level in five months, while U.S.-focused WTI futures rose 2.3% to $99.49. Prices climbed after another round of deadly attacks in Saudi Arabia and on reports that the U.S. and Israel are drawing up plans for a renewed attack on Iran after next month’s midterm elections. Crude has swung widely in recent weeks on attacks around the Strait of Hormuz, when oil last pushed above $110 a barrel.

A shaky rebound

The selloff follows a fragile recovery. “The start of the Q3 earnings season has been unable to revitalize Wall Street thus far,” Boyadjian said. “Although all three benchmark U.S. indices have recouped a large chunk of last week’s heavy losses, the rebound is on shaky ground.”

Reporting based on coverage by Barron’s.