U.S. stocks mostly fell on Thursday, with technology shares leading the decline. Meta and Tesla dropped after reporting results, prompting investors to reassess how quickly heavy AI spending might pay off. Oil also climbed above $100 a barrel, putting inflation and the interest-rate outlook back in focus ahead of next week’s Federal Reserve meeting.
Nasdaq falls 2.6% as oil tops $100
The Nasdaq Composite fell 2.6% to 26,008 at the close, while the S&P 500 lost 1.2% to 7,663. The Dow Jones Industrial Average edged up 0.02% to 52,867. The technology-heavy Nasdaq bore the brunt of the selling.
Oil added to pressure on risk appetite. The U.S. said it was not negotiating with Iran to end the war in the Middle East, heightening concerns about regional stability and supply. Front-month West Texas Intermediate crude futures rose 3% to settle at $100.06 a barrel, taking their gain for the month to nearly 11%. Sustained higher oil prices could add to inflationary pressure and influence expectations for interest rates.
Meta’s higher AI spending weighs on shares
Meta Platforms fell 7%, its worst one-day performance since July and one of the Nasdaq’s biggest decliners. Third-quarter revenue came in at $64.6 billion, above Wall Street expectations, and the company’s fourth-quarter revenue forecast also topped estimates. But earnings of $3.83 per share missed expectations, while rising investment in AI projects pushed free cash flow into negative territory.
Meta raised the lower end of its full-year capital spending forecast. It now expects to spend $135 billion to $145 billion, compared with its previous range of $130 billion to $145 billion.
Stephen Ju, an analyst at UBS Global Research, said Meta may be entering a phase in which AI investment begins to translate into commercial returns. Spending on advanced AI models over the past three years could start to show up in improved advertising performance and greater use of AI products, he said. Ju added that an optimized Muse model could improve ad targeting and content recommendations. Those expectations underpin UBS’s 2027 and 2028 revenue forecasts; they are not results Meta has already delivered.
Meta’s board also approved the creation of non-voting Class C shares. The shares will be publicly traded and distributed to holders of the company’s Class A common stock and Class B super-voting stock. Trading is expected to begin in January 2027. Meta said the Class A share price will reflect a two-for-one split.
The company said the new share structure would help preserve CEO Mark Zuckerberg’s voting control while supporting its AI expansion plans. The arrangement also relates to the potential effect of a proposed California wealth tax on Zuckerberg’s control of Meta and his ability to continue leading the company from the state. The outcome will depend on the policy process.
Tesla beats estimates, but costs rise
Tesla shares fell 3.1%. The company reported third-quarter earnings of 48 cents per share and revenue of $28 billion, both above analyst expectations, though revenue was lower than a year earlier. Operating expenses rose 39% year over year, adding pressure to margins.
Tesla also cut its full-year capital spending forecast to $20 billion from $25 billion. On the earnings call, CEO Elon Musk offered no new details about a potential merger with SpaceX, saying only that he had already disclosed what needed to be disclosed. SpaceX shares fell 9.1% on the day, while discussion of a possible deal remained without a confirmed plan or timetable.
P&G posts its strongest daily gain in more than six years
Not every company reporting results was caught in the sell-off. Procter & Gamble rose 5.6%, its biggest one-day gain since March 26, 2020, when the shares climbed 6.4%.
The consumer goods company reported fiscal first-quarter 2027 revenue and earnings above market expectations, with sales volume up 2.4% year over year. CFO Andre Schulten said P&G had found a balance among price increases, product improvements, packaging upgrades, brand communications and retail execution, but described that balance as fragile. The company aims to use innovation to support pricing while avoiding damage to revenue growth.
Thursday’s trading suggested investors were not indiscriminately selling stocks. Instead, they were focused on whether AI investment can translate into cash flow and profits, and on how companies balance costs, pricing and demand. The Federal Reserve’s meeting next week, oil prices and further capital spending plans from major technology companies remain central to market pricing.