Investor anxiety is mounting as Halloween nears, with financial markets already feeling the pressure. U. S. stocks have taken a hit due to worries over investments in the artificial intelligence sector. The Nasdaq, heavily weighted with tech stocks, fell more than 2%, marking its sharpest decline since June. The S&P 500 also dropped, losing 1.2%, which is its largest decrease since July. Market participants are closely watching these trends.
Market Movers: Meta's Financial Struggles
Meta, the social media giant, faced substantial losses. Its shares plunged nearly 7% on Thursday. The company reported a negative free cash flow of $2.12 billion for the third quarter. It also increased its full-year capital expenditure forecast, setting a new range of $135 billion to $145 billion, up from the previous $130 billion estimate. Investors are taking note.
Bonds and Oil on Opposite Courses
As stocks plunged, bonds moved in the opposite direction. The yield on the 10-year U. S. Treasury note fell by over 17 basis points to 4.972%. This was its first drop below 5% in about a month and its largest single-day decline since March 2023.
Oil prices, however, surged amid rising geopolitical tensions. Brent crude futures jumped 4%, reaching $113.17 per barrel, a level not seen since May 4. U. S. West Texas Intermediate also rose, climbing 2.4% to settle at $99.47. This increase came after reports from the New York Times on potential renewed military actions by the U. S. and Israel against Iran post-midterm elections.
Political Contributions and Business Deals
In political news, Elon Musk is in the spotlight with significant financial contributions. The Tesla CEO has pledged about $366 million for the 2026 election cycle, making him a major individual donor. Of this, at least $276 million has been allocated to Republican groups and Musk's political initiative, America PAC, since July.
On the business front, Musk's aerospace firm SpaceX has secured at least $6.78 billion in federal contracts as of October 1 this year. This amount nearly doubles its total for 2024. Musk has also invested about $1 billion in Skydance, aiming to secure equity investments.
Market Optimism Despite Challenges
Looking forward, Bill Ackman, CEO of Pershing Square, remains optimistic about market prospects. In a CNBC "Squawk on the Street" interview, he expressed confidence that despite current geopolitical tensions and economic challenges, a "booming market environment" is likely once these issues are resolved. Ackman believes that resolving conflicts involving Ukraine-Russia and Iran, along with falling energy costs, will benefit the markets.
Yet, concerns over rising crude prices persist. Traders are worried that consistently high energy prices could worsen inflationary pressures, potentially leading the Federal Reserve to raise interest rates.
Nvidia's Confidence in Memory Supply
In the tech sector, Nvidia CEO Jensen Huang is confident about future memory supply. Despite recent declines in memory stock values due to surplus concerns, Huang told CNBC that overstocking is unlikely by 2029. "One of the things that's really great about memory is that you can always use more of it, " he said during an interview at the company's GTC Berlin conference.
