Market Update: AI Spending Jitters and Oil Surge Hit Stocks

Markets are already experiencing some ‘heebie-jeebies,’ with a significant sell-off in U.S. equities as renewed concerns around AI spending and rising geopolitical tensions unsettle investors.

• U.S. equity markets experienced a significant sell-off, with the Nasdaq tumbling over 2% and the S&P 500 recording its largest decline since July, fueled by renewed concerns over AI company spending.
• Meta Platforms shares slumped nearly 7% after the social media giant reported negative free cash flow in its third quarter and raised its full-year capital expenditure forecast, highlighting substantial AI investment.
• The benchmark 10-year U.S. Treasury yield saw a sharp decline of over 17 basis points to 4.972%, marking its biggest one-day fall since March 2023 and dipping below 5% for the first time in a month as investors sought safer assets.
• Oil prices surged, with Brent crude futures gaining 4% to reach $113.17 per barrel, the highest since May, following reports that U.S. and Israeli militaries have prepared plans for potential strikes on Iran, escalating geopolitical tensions.
• Nvidia CEO Jensen Huang pushed back against fears of a memory glut by 2029, asserting that demand for memory, particularly HBM, remains robust, a perspective that counters recent weakness in memory stock performance.