Renewed AI Financing Concerns Coupled with Escalating Middle East Tensions! Nasdaq Posts Largest Single-Day Drop Since June; International Oil Prices Surge

U.S. stocks closed mostly lower on Thursday, as massive capital expenditures and financing pressures in the artificial intelligence (AI) sector once again sparked investor concerns, triggering a large-scale selloff in technology stocks. Meanwhile, rising geopolitical tensions in the Middle East pushed international oil prices sharply higher, while safe-haven funds flowed into U.S. Treasuries, driving Treasury yields significantly lower. At the close, the Nasdaq Composite fell 2.6% to 26,008.86 points, marking its largest single-day drop since June; the S&P 500 declined 1.21% to 7,663.43 points, its worst single-day performance since July; the Dow Jones Industrial Average edged up 11.89 points, or 0.02%, to 52,867.98 points. Technology stocks were the main drag on the market that day. Meta (META.US) fell about 7%, despite the company's latest quarterly revenue beating market expectations and issuing optimistic guidance, as its massive AI investment needs continued to unsettle investors. Other technology stocks also came under pressure. AMD (AMD.US) dropped more than 8%, Micron Technology, Inc. (MU.US) fell 6%, and NVIDIA Corporation (NVDA.US) declined 4%. AI cloud infrastructure provider CoreWeave (CRWV.US) fell 10%. Its bond yields and credit default swap (CDS) prices had remained elevated, highlighting investor concerns about its debt burden and financing capacity. Notably, NVIDIA Corporation CEO Jensen Huang said in an interview on Thursday that market demand for new cloud computing service providers is extremely strong, but capital shortages are limiting the pace of expansion for related companies. Wells Fargo & Company traders noted in a report that Huang's remarks about capital scarcity unsettled the market, reigniting concerns about the credit market's risk tolerance and whether financing channels are becoming saturated. The bank also said that Meta's comments about AI development requiring substantial funding support similarly heightened market worries about the scale of capital expenditures by technology companies, weighing not only on its own stock price but also on the broader market. JPMorgan traders noted that the relatively optimistic sentiment on Wednesday reversed overnight. Meta's stock weakened in pre-market trading, combined with increased discussion about a possible further escalation of the Iran situation after the U.S. midterm elections, which together weighed on investor confidence. The bank said that judging from market price action and trading desk feedback, the market narrative surrounding AI financing remains very fragile. After the recent adjustment in technology stocks, investors have not yet regained sufficient confidence, nor do they have the willingness to significantly increase risk exposure again. Meanwhile, rising geopolitical risks in the Middle East pushed international crude oil prices sharply higher. According to media reports citing people familiar with the matter, the United States and Israel plan to launch a new round of strikes against Iran after the U.S. midterm elections next month. U.S. President Trump told reporters on Wednesday evening that Washington is not currently negotiating with Tehran and said certain things will happen "soon." The news intensified market concerns about further escalation of conflict in the Middle East and potential disruptions to global crude oil supply. At Thursday's close, international benchmark Brent crude futures rose 4% to $113.17 per barrel; U.S. West Texas Intermediate (WTI) crude futures rose 2.39% to $99.47 per barrel. Under the dual impact of technology stock declines and rising geopolitical risks, investors accelerated their shift toward safe-haven assets such as U.S. Treasuries, driving Treasury prices higher and yields sharply lower. The yield on the U.S. 10-year Treasury fell more than 17 basis points to 4.972%, the lowest level in nearly a month; the 2-year Treasury yield, which is more sensitive to monetary policy expectations, also fell more than 16 basis points to 4.659%. Overall, Thursday's market action reflected a shift in the focus of investors' attention regarding the AI investment boom. Although demand for AI computing power remains strong, the financing capacity, cost of capital, and corporate cash flow needed to support large-scale infrastructure buildout are becoming important factors affecting technology stock valuations. At the same time, uncertainty surrounding the geopolitical situation in the Middle East further exacerbated market volatility. Against the backdrop of intertwined AI financing concerns and geopolitical risks, investors' risk appetite has clearly cooled, with the U.S. technology sector under significant selling pressure, while crude oil and U.S. Treasuries became the main destinations for capital reallocation.