AI Stocks Drag Down Markets, While Other Sectors Show Strength
The S&P 500 and Nasdaq experienced significant drops driven by AI stock volatility, though broader market performance offered a mixed picture.
Major U.S. stock indexes experienced a downturn on Thursday, primarily influenced by a significant slump in artificial intelligence-related stocks. The S&P 500 closed down 1.2%, marking its largest daily decline since July, while the Nasdaq composite saw a more substantial drop of 2.6%.
Despite the weakness in technology shares, a majority of U.S. stocks actually advanced, indicating underlying strength in other market sectors. The Dow Jones Industrial Average, however, reflected this mixed sentiment by inching up less than 0.1%.
The fluctuations in AI stocks are largely attributed to concerns that their rapid growth may be threatened by the persistence of high interest rates. This market nervousness contributed to a sharp decrease in Treasury yields. Concurrently, oil prices saw an increase due to heightened concerns surrounding the conflict with Iran.
On Thursday, October 22, 2026, the S&P 500 fell 93.74 points to 7,663.43. The Dow Jones Industrial Average gained 11.89 points, settling at 52,867.98. The Nasdaq composite lost 694 points to reach 26,008.86, and the Russell 2000 index of smaller companies rose 3.01 points, or 0.1%, to 2,784.03.
Looking at weekly performance, the S&P 500 is up 0.1% for the week. The Dow has seen a more considerable gain of 1.7%, while the Nasdaq is down 0.5%. The Russell 2000 has performed strongly, up 2.3% for the week.
Year-to-date, the S&P 500 has increased by 11.9%, and the Dow is up 10%. The Nasdaq has also climbed 11.9% over the year, and the Russell 2000 has seen a gain of 12.2%.