Wall Street worst day since July: the Nasdaq falls 2.6 percent, chips rout, and oil jumps to a five month high

Two fears hit the market at the same time on Thursday, and technology stocks were standing where they met. The first was war. Reporting that the United States and Israel have prepared renewed strikes on Iran after the midterm elections, together with Houthi attacks on Saudi oil sites and Iran claims in the Strait of Hormuz, pushed Brent crude up 4 percent to settle at 113.17 dollars a barrel, its highest settlement since May 4, as of October 22.

The second fear was the bill for artificial intelligence. Lam Research, which makes chip equipment, fell 11.8 percent after results and guidance that investors read as a warning about the pace of spending. Nvidia fell 4.4 percent. CoreWeave, which rents computing power for AI work, fell 10.1 percent. The Philadelphia Semiconductor Index lost 6.72 percent in one session, with every one of its 30 members down. Meta fell about 7 percent after it reported revenue above forecasts but profit below them and said it would create a new class of stock to raise money for AI investment. Tesla slid 3.1 percent a day after its earnings.

The headline numbers were severe. The Standard and Poor 500 closed at 7,663.43, down 93.74 points, a fall of 1.2 percent and its worst day since July. The Nasdaq Composite fell 2.6 percent to 26,008.86. Asian and European markets fell with it. South Korea Kospi lost 3.5 percent, Hong Kong Hang Seng lost 3 percent, Japan Nikkei 225 lost 2.7 percent, and Paris CAC 40 lost 1.4 percent.

Underneath the indexes, the day looked different. The Dow Jones Industrial Average edged up about 11 points. More stocks on the New York Stock Exchange rose than fell, by 2,319 to 1,596. An equal weight version of the Standard and Poor 500, which counts small and giant companies the same, rose 0.73 percent. Consumer staples gained 3.31 percent, utilities 2.07 percent and health care 1.32 percent. Investors were not fleeing stocks as a whole. They were fleeing the most expensive corner of the market and hiding in companies that sell food, power and medicine.

Bond buyers made the same judgment. Demand for Treasury bonds rose and the yield on the 10 year note fell below 5 percent for the first time since late September, as of October 22. That is a flight to safety, and it came in the same session that weekly jobless claims printed near a 57 year low. The labor market is not cracking. What cracked on Thursday was confidence that war risk and AI spending can both keep rising without something giving. This story reports market movement only and is not investment advice. (Picture: generated illustration.)