Stock Market Today: Nasdaq Plunges 2.6% as AI Selloff Deepens; Dow Ekes Out Gain; Oil Surges to 5-Month High

New York, Oct. 23, 2026 — U.S. stocks closed mostly lower on Friday, with the Nasdaq Composite suffering its worst session since June as a renewed rout in artificial intelligence shares overwhelmed positive economic data and sent investors fleeing toward the safety of government bonds.

The Nasdaq Composite plunged 694 points, or 2.6%, to close at 26,008.86 . The S&P 500 tumbled 1.2% to 7,663.43 . The Dow Jones Industrial Average managed a marginal gain of 11.89 points, closing at 52,867.98 after a choppy session that saw the blue-chip index swing between gains and losses .

Why Did the Nasdaq Fall So Sharply Today?

The AI trade, which has been the market’s primary engine of gains this year, came under intense pressure once again as investors questioned the sustainability of the massive capital expenditures driving the sector.

1. Nvidia’s CEO sounded the alarm on AI financing. Jensen Huang told CNBC that capital to fund the AI investment boom was becoming scarce due to higher interest rates and a glut of existing spending commitments, adding fuel to Thursday’s Nasdaq slide . The comments crystallized fears that the debt-fueled buildout of AI infrastructure may be approaching a funding wall.

2. OpenAI’s valuation slipped. According to Bloomberg, OpenAI — which is seeking to raise roughly $30 billion** in a new funding round — is negotiating a valuation of **$1.25 trillion, down $150 billion** from the **$1.4 trillion it aspired to just last month . The downward revision signaled growing skepticism about AI economics.

3. Semiconductor stocks bore the brunt. The Philadelphia Semiconductor Index (SOX) fell more than 6.7%, its steepest drop since July . SK Hynix was a rare bright spot, rallying after scrapping plans for a potential $10 billion U.S. listing of its Solidigm unit, a move that had faced strong opposition from regulators and shareholders .

Which Stocks and Sectors Moved?

Telecom stocks suffered steep losses on reports that SpaceX is in talks with at least one major tower operator to build out 80,000 cell sites across the U.S., a move that would position the company as a de facto fourth major wireless carrier . T-Mobile, AT&T, and Verizon all fell sharply . Tower operators Crown Castle and American Tower rallied on the SpaceX news .

Western Digital dropped after the company said capital expenditures would be slightly higher over the next two years . Newmont fell after warning of higher unit costs in 2027 .

Citigroup was little changed after receiving approval to launch a wholly-owned securities business in China, ending a nearly five-year journey marked by regulatory friction .

What Are Treasury Yields and Oil Prices Saying?

The 10-year Treasury yield fell below 5% for the first time in a month as investors sought safe havens from the equity selloff . The yield declined 0.110 percentage point this week to 4.987%, its third consecutive weekly decline and the largest three-week drop since April 2025 . Five- to 30-year yields reached their lowest levels in nearly a month .

Brent crude surged above $115 a barrel, its highest level in five months, as Middle East tensions and fears of supply disruptions intensified . The energy spike added to inflation concerns, though equities largely overlooked the move amid the AI-focused selling.

What Economic Data Was Released Today?

The S&P Global U.S. Composite PMI for October came in at 57.6, matching expectations but slightly below the prior reading of 58.4 . The Manufacturing PMI rose to 56.0, beating the 55.5 forecast, while the Services PMI slipped to 57.9, just below expectations . The data indicated continued economic expansion, though at a marginally slower pace.

What’s Next for Investors?

Attention remains on the Federal Reserve’s October 28 meeting, though markets have largely priced out a rate hike at this month’s gathering. The bigger question is whether the AI-driven selloff represents a healthy correction or the beginning of a broader repricing of technology valuations.

As Ed Yardeni of Yardeni Research put it: “Letting some air out of the AI bubble is a good thing. I don’t think it will burst and cause problems for the whole economy” . But with the 10-year yield near 5% offering a viable alternative to high-risk equity bets, the pressure on AI names may not ease soon.

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Key Takeaways (Quick Summary)

• Nasdaq plunged 2.6% to 26,008.86, its worst day since June; S&P 500 fell 1.2%; Dow eked out a gain of 12 points
• Nvidia CEO warned that capital for AI is becoming scarce due to higher rates and spending commitments
• OpenAI’s valuation slipped to $1.25 trillion, down $150 billion from last month’s target
• Semiconductor index fell 6.7%, its steepest drop since July
• SpaceX’s wireless ambitions hammered telecom stocks; T-Mobile, AT&T, Verizon all fell
• 10-year Treasury yield fell below 5% for the first time in a month as investors sought safety
• Brent crude surged above $115, a five-month high, on Middle East supply fears