4:25pm: AI enthusiasm faces reality check
Wall Street ended Thursday mixed, with the Dow Jones holding steady while the S&P 500 and Nasdaq fell sharply as investors questioned whether the massive spending on artificial intelligence infrastructure will deliver returns quickly enough to justify the cost.
The tech-heavy Nasdaq Composite bore the brunt of the selling, falling 694 points, or 2.6%, to 26,009.
The Dow Jones Industrial Average edged up 12 points to 52,868, while the S&P 500 dropped 94 points, or 1.2%, to 7,663.
Disappointing corporate outlooks and rising capital spending projections from AI heavyweights Meta Platforms and Tesla unsettled investors, adding to concerns about the near-term profitability of the technology boom.
While companies continue to invest heavily in the computing power and infrastructure needed to support AI, investors are becoming more demanding about when those investments will translate into sustainable earnings growth.
The divergence between the Dow and the tech-heavy indexes reflected the pressure on growth stocks as markets reassessed the outlook for AI spending. With expectations running high, even strong underlying business performance may not be enough to reassure investors if the costs of expansion continue to climb.
3:35pm: Small cap wrap
- U.S. Global Investors (NASDAQ:GROW) has listed its actively managed Technology and Aerospace & Defense ETF, WAR, on the Lima Stock Exchange, marking the fund’s first listing outside the United States and the company’s fourth ETF available in Peru.
- Nextech3D.AI (CSE:NTAR, OTCQX:NEXCF, FRA:1SS) said its Map D platform has generated its first AI-created customer floor plan for the Florida Home Builders Association’s Southeast Building Conference 2027, featuring interactive booth registration and exhibitor information.
- Gunnison Copper Corp (TSX:GCU, OTCQB:GCUMF, FRA:3XS0) hosted US Interior Secretary Doug Burgum, Congressman Juan Ciscomani and other government officials at its producing Johnson Camp Mine in Arizona to showcase its copper operations and the growth potential of its flagship Gunnison Copper Project.
2:30pm: Market movers
- Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) reported a 26% increase in third-quarter revenue to $64.6 billion and issued stronger-than-expected fourth-quarter guidance, while analysts remained positive on its advertising business and Muse AI initiative despite concerns over AI spending.
- Tesla Inc (NASDAQ:TSLA) reported better-than-expected third-quarter earnings as investors weighed improving vehicle demand and growth in its software and energy businesses against speculation about a potential merger with SpaceX.
- International Business Machines Corp (NYSE:IBM) maintained its full-year revenue growth and free cash flow targets after first-quarter software strength helped expand margins and improve cash generation, with revenue rising 1% year on year to $14.5 billion.
- CoreWeave is forecast by Bank of America to deliver 168% year-on-year third-quarter revenue growth as new data centre capacity comes online, with the bank reiterating its Buy rating and US$140 price target.
- Micron Technology Inc (NASDAQ:MU) could strengthen its competitive position by pursuing 3D technology rather than 4F² DRAM architecture, according to Wedbush, which views its manufacturing progress as a key advantage.
- American Airlines Group Inc (NASDAQ:AAL, XETRA:A1G) reported record third-quarter revenue of $16.3 billion, up 19.3% year on year, but rising fuel expenses contributed to an adjusted net loss of $182 million.
- Comcast Corporation (NASDAQ:CMCSA, XETRA:CTP2) reported a 6% decline in third-quarter revenue to $29.3 billion and a 4% fall in adjusted earnings per share to $1.07 as weakness in its connectivity business offset stronger streaming and film results.
- Spotify Technology SA (NYSE:SPOT) increased third-quarter revenue by 16% year on year to €5 billion as premium subscribers rose 9% to 306 million and monthly active users grew 11% to 788 million.
- Procter & Gamble Co (NYSE:PG, XETRA:PRG) beat first-quarter revenue and adjusted earnings expectations as organic sales rose 4% across its portfolio, with revenue increasing 4% year on year to $23.28 billion and its full-year outlook unchanged.
- Southwest Airlines reported record third-quarter revenue of $8.4 billion, up 21% year on year, as stronger fares helped lift its operating margin to 4.5% despite an $821 million increase in fuel costs.
- SAP said it expects full-year 2026 cloud and software revenue to reach the upper ends of its forecasts after quarterly revenue rose 13% to €10.27 billion and its cloud backlog increased 28% to €24.1 billion.
1:20pm: Tech erases gains
Any tech gains made earlier this week have “turned to dust,” says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.
The Nasdaq was down 2.5% on Thursday afternoon, dragging the major indexes along with it.
“It is understandable that investors thought a bottom had occurred over the weekend, but investing is rarely that easy,” Beauchamp commented.
“The peak-to-trough move earlier in October was only 7%, falling short even of July’s modest 11% pullback. While the losses of the last three weeks have been painful, a longer-term view shows that the Nasdaq 100 is still up nearly 30% from the end of March.
“A little bit more fear might, in the long-run, be healthy for tech.”
12:10pm: FTSE finishes lower
The FTSE’s late afternoon surge lost steam towards the close to finish at 10,725, a 0.3% loss on the day.
“Surging crude oil above $112 and earnings-driven gains in Rentokil and LSEG absorbed heavy selling across banks and miners,” noted Tickmill’s Patrick Munnelly.
“While sticky inflation metrics and expanding public borrowing reinforce expectations for a November BoE rate hike, energy sector strength helped the FTSE 100 navigate macro friction.”
11:10am ET: Nasdaq under pressure
Following another big round of earnings last night that sent Meta higher and Tesla lower this morning, Swissquote analyst Ipek Ozkardeskaya believes technology offers the strongest rebound potential as AI enthusiasm drives investment, but growing reliance on debt to fund the AI buildout is raising concerns about the sustainability of that growth.
“Earnings are coming in stronger than expected, triggering positive knee-jerk reactions. Yet gains are either rapidly given back or fail to snowball into broader, lasting enthusiasm,” Ozkardeskaya said.
The Swissquote analyst noted that the Nasdaq is under pressure this morning, suggesting that even strong earnings “may no longer help investors overlook troubles elsewhere.”
10:00 am ET: US stocks slide
As indicated by stock futures, Wall Street’s main indexes opened lower on Thursday.
At open, the Dow Jones Industrial Average fell 67.7p, or 0.13%, to 52,788.41, while the S&P 500 dropped 62.6p, or 0.81%, to 7,694.62 and the Nasdaq Composite declined 394.5p, or 1.48%, to 26,308.407.
Selling intensified after the opening bell, with the Nasdaq 100 losing about 500 points in the first about 13 minutes of trading.
US markets are under pressure from doubts over returns on heavy AI spending, disappointing reactions to Tesla and Meta’s results, surging oil prices stoking inflation fears, and concerns over a possible escalation of the Middle East conflict.
Tesla shares were down 1.91% at US$379.10 by 9.39 am EDT on Thursday, while Meta Platforms fell 6.51% to US$652.10. Nvidia was down 1.76% at US$218.07, as technology stocks came under pressure amid concerns over AI spending and returns.
Oil prices climbed on Thursday to their highest levels since May, reported Yahoo Finance, amid concerns that the Middle East conflict could escalate after the US midterm elections on 3 November.
Brent crude rose above US$111 a barrel, while West Texas Intermediate traded above US$98, after the New York Times reported that the US and Israel had drawn up plans for renewed strikes on Iran following the elections, citing unnamed US officials.
Gold prices fell on Thursday as a fresh rise in oil prices fuelled concerns about energy-driven inflation.
By 9:35 am EDT, spot gold was down 1.46% at US$4,071.56 an ounce, while gold futures fell 1.3% to US$4,098.67 an ounce.
Bitcoin remained under pressure on Thursday, surrendering most of its overnight recovery as a sharp sell-off in AI stocks and rising oil prices weighed on risk-sensitive assets. It was at $81,795 at about 9: 35 am EDT.
The FTSE 100 edges into positive territory, rising 0.01% to 10,754.13 after earlier losses at 2: 58 pm BST, while the FTSE 250 remains under greater pressure, down 0.63% at 24,285, as mid-cap stocks continue to underperform the blue-chip index.
9:00 am EDT: Best of the brokers
LSEG (London Stock Exchange Group PLC (LSE:LSEG)): ‘Buy’ ratings maintained by Jefferies (£110 target) and UBS (11,700p target) after 2026 guidance raised and $3.5bn Octus acquisition announced
Sainsbury’s (J Sainsbury PLC (LSE:SBRY)): ‘Hold’ maintained by Jefferies, 340p target; softer grocery trading could offset lower expected interest costs
XP Power (XP Power Ltd (LSE:XPP)): Upgraded to ‘buy’ from ‘hold’ by Deutsche Bank, target raised to 2,285p from 1,400p
Ilika (Ilika PLC (AIM:IKA, OTCQX:ILIKF)): ‘Buy’ maintained by Cavendish, 118p target; new marine battery brand implies 424% upside from 22.5p
Inchcape (Inchcape PLC (LSE:INCH)): ‘Hold’ maintained by Panmure Liberum, 855p target; margin downgrade could weigh on earnings until 2027
US initial jobless claims fell by 6,000 to a seasonally adjusted 194,000 in the week to 17 October, nearing their lowest level in 57 years and signalling continued labour market stability.
The figures, released by the Labor Department on Thursday, cover the period used to survey businesses for October’s non-farm payrolls report, following job gains of 29,000 in September and 133,000 in August.
8:00 am EDT: US futures extend losses
US stock futures have extended their losses in the last hour or so, with the Nasdaq contract leading the decline, echoing the weakness across European markets as investors remain wary of rising oil prices and doubts over returns from heavy AI spending.
At 7:41 am EDT, Nasdaq 100 futures were down 1.84%, while S&P 500 futures were down 1.10%. Dow futures have fallen 0.66% and Russell 2000 futures are down 0.76%.
The sell-off has broadened beyond technology stocks, with all four major futures contracts lower.
Nasdaq futures are under the most pressure as investors reassess AI spending after Tesla cut its capital expenditure forecast and Meta’s funding plans renewed questions about the cost of its AI ambitions.
Rising oil prices are adding to inflation concerns and could keep markets on edge ahead of the opening bell.
Mixed results from the first Big Tech earnings of the season have done little to alter the main market narrative, leaving US index futures lower overnight as investors remain cautious.
Tesla shares fell about 5% in pre-market trading on Thursday after the electric vehicle maker cut its 2026 capital spending forecast.
The company lowered its forecast to about $20 billion from more than $25 billion on Wednesday after spending far less than expected on AI and robotics in the third quarter, resulting in a surprise positive free cash flow.
Blackstone, the world’s largest alternative asset manager, reported lower third-quarter earnings on Thursday as market turbulence hampered its ability to realise gains from investments.
American Airlines reported third-quarter results above analyst expectations but issued a fourth-quarter outlook below forecasts.
The airlines has withdrawn its previous earnings outlook and now expects to report a loss in 2026, as rising jet fuel costs outstrip fare increases and put pressure on profit margins.
Shares in the airline fell over 3% in premarket trading on Thursday.
Spotify shares rose after the streaming company reported third-quarter results, with premium subscribers increasing 9% year on year and AI remaining central to its strategy.
Revenue was nearly €5 billion (about US$5.6 billion), broadly in line with analyst expectations.
At 12:52 pm BST, the FTSE 100 and FTSE 250 were both lower, with mid-cap stocks bearing the brunt of the sell-off.
The FTSE 100 has fallen 0.29% to 10,721.90, while the FTSE 250 is down 0.83% at 24,236.36, a decline of 203.42p.
Earlier in the day, the FTSE 100 fell to a one-week low, Reuters reports, as steep losses among heavyweight banks and rising oil prices, while markets assessed a fresh batch of corporate results.
The blue-chip index touched 10,699.33p at 11.06 am BST, while the FTSE 250 mid-cap index too, fell and could be headed for its biggest one-day decline since 1 October.
Global markets have been unsettled by rising bond yields, expectations that interest rates will remain higher for longer and heightened volatility linked to the Iran war.
France’s fiscal and political problems are adding to pressure on European markets at a time when rising oil prices are already fuelling inflation concerns.
France’s 10-year government bond risk premium over German Bunds hit its widest level since November 2011 on Thursday, as concerns over public finances, political uncertainty and street protests unsettled investors.
On Wednesday, the bond yield had reached 5%, its highest level in 24 years, amid concerns about public finances and rising global energy prices.
The premium on Thursday rose to 173.58 basis points, while France’s 10-year yield climbed 11.5 basis points to 5.11%, its highest since July 2002, amid difficulties passing the 2027 budget and ahead of next year’s presidential election.
It means the government faces a higher cost when issuing new debt and refinancing maturing bonds, increasing pressure on public finances and on French banks, and further adding to inflation.
12:00 noon BST: London indices still in red
There’s no cheer to be reported from European markets at this hour.
Stocks are falling as surging oil prices fuel inflation concerns and raise the prospect of interest rates staying higher for longer.
Disappointing reactions to results from Tesla and Meta have renewed doubts about whether heavy AI spending will deliver sufficient returns.
French fiscal concerns are adding to the pressure, while London’s FTSE 100 is also being dragged lower by broader risk aversion.
The spotlight is on banking sector and trade in London.
The Bank of England allotted a record £143.083 billion ($191.80 billion) in seven-day funds through its weekly short-term repo operation on Thursday, surpassing the previous record of £140.845 billion set last week.
The central bank is increasingly using short-term repo operations to provide banks with reserves as it reduces its holdings of government bonds purchased under its quantitative easing programme, reports Reuters.
This is likely to help banks manage short-term funding needs and supporting the smooth functioning of money markets.
Barclays reported a 12% rise in quarterly profits to £2.3 billion, while investors are also weighing the prospect of higher bank taxes in next week’s Budget.
But Barclays also announced on Thursday that it plans to cut about 5,000 jobs, or 5% of its workforce, as part of a cost-reduction programme using AI and automation.
Barclays shares were broadly flat at 419.10p, down 0.02% from the previous close of 419.20p, despite trading between 407.70p and 423.30p during the session.
At noon, Lloyds Banking Group and Barclays were among the FTSE 100’s most actively traded shares, with 22.7 million and 12.7 million shares changing hands, respectively.
Clearly, the two stocks are attracting substantial activity from investors.
US futures seem to be following the European markets pattern at this hour.
They could remain under pressure ahead of the opening bell if oil prices stay elevated and investors continue to question the returns on AI investment.
Already at about 6:30 am EDT, Wall Street futures were pointing down.
Nasdaq futures fell more than 1% as Tesla and Meta Platforms’ earnings failed to ease concerns over AI spending, putting renewed pressure on high-growth stocks, while rebounding oil prices weighed on sentiment.
Meta, the first of the so-called AI majors to report quarterly results, posted better-than-expected third-quarter revenue late on Wednesday.
But optimism faded after it announced plans to issue non-voting shares, reigniting concerns over its rising capital spending commitments.
The court order by a New Mexico judge fining Meta $25 billion as penalty over data privacy violations could put pressure on its shares in pre-market trading and after Wall Street opens later Thursday.
Brent crude futures rose 2.2% on Thursday to about $111 as escalating Middle East tensions and reports of preparations for renewed US and Israeli strikes on Iran heightened fears of further disruption to oil supplies.
11:00 am BST: Small-cap Round-Up
Metals One PLC (AIM:MET1, FRA:HT7, OTCQB:MTOPF) has agreed to acquire full ownership of South African gold and power business Lions Bay Resources for £6.5 million in shares and appointed the former chief executive of Harmony Gold (NYSE:HMY) as chair.
Ilika PLC (AIM:IKA, OTCQX:ILIKF, FRA:I8A) has launched ORKA, a dedicated brand for its deep-sea battery systems, as it targets new commercial opportunities in the defence and marine markets.
Invinity Energy Systems PLC (AIM:IES, OTCQX:IESVF, AQSE:IES) has confirmed a £25 million fundraising to strengthen its working capital and accelerate product development.
European stocks are down at 11:00 am BST.
France’s CAC 40 leading losses, down 1.59% to 7,795.42, followed by Germany’s DAX, which dropped 1.13% to 25,354.68, while the pan-European Stoxx 600 fell 1.09% to 637.49.
UK’s FTSE 100 declined 72p, or 0.67%, to 10,680.61.
10.00 am BST: Rentokil leads the blue-chip risers
Rentokil Initial PLC (LSE:RTO) led the FTSE 100 with an 8.4% rise to 341.2p after reporting improved third-quarter trading and announcing a US$200 million share buyback.
The pest-control group delivered organic revenue growth of 3.4%, including 2.4% growth from North American pest-control services and 5.7% growth from its international pest-control division.
Rentokil maintained its full-year profit expectations, while improving customer retention and residential sales trends indicated that efforts to repair its North American operation were gaining traction.
London Stock Exchange Group PLC (LSE:LSEG) was the second-largest riser, gaining 3.7% after raising its full-year revenue, margin and cash-flow guidance and agreeing to acquire credit data provider Octus.
The wider London market remained firmly lower, with the FTSE 100 falling 78 points, or 0.7%, to 10,675.
The FTSE 250 declined 233 points, or almost 1%, to 24,207, while the FTSE 350 and All-Share lost 0.8%.
The AIM All-Share extended its decline to 1.1%, showing that selling pressure remained particularly strong among smaller companies.
Energy shares resisted the downturn as Brent crude traded above US$111 a barrel, helping Ithaca Energy PLC (LSE:ITH) gain 2.2% and BP PLC (LSE:BP.) rise 1%.
Mining shares remained the main drag on the blue-chip index as weaker gold and copper prices weighed on precious-metals and diversified producers.
9.00 am BST: Mining losses deepen London’s decline
Mining shares led London lower on Thursday as falling gold and copper prices added to wider concerns about rising energy costs and interest rates.
The FTSE 100 fell 77 points, or 0.7%, to 10,676, while the FTSE 250 dropped 199 points, or 0.8%, to 24,241.
The FTSE 350 and All-Share declined 0.7%, while the AIM All-Share underperformed with a 0.9% fall.
Anglo American PLC (LSE:AAL) led the blue-chip fallers with a 4.3% decline, followed by precious-metals producer Fresnillo PLC (LSE:FRES), down 4%, and copper miner Antofagasta PLC (LSE:ANTO), which lost 3.8%.
Diversified commodities group Glencore PLC (LSE:GLEN, ASX:GLC) fell 2.9%, while FTSE 250-listed gold producer Pan African Resources PLC (LSE:PAF, OTCQX:PAFRY, JSE:PAN) dropped 5%.
Copper fell more than 2% to around US$14,080 a tonne, while gold retreated towards US$4,100 an ounce as higher Treasury yields, a stronger dollar and uncertainty over US interest rates reduced demand for metals.
Outside mining, J Sainsbury PLC (LSE:SBRY) fell 4.1% following its interim results, Rolls-Royce Holdings PLC (LSE:RR.) dropped 3.2% and Standard Chartered PLC (LSE:STAN) declined 2.9%.
Rentokil Initial PLC (LSE:RTO) topped the FTSE 100 with a 9.2% gain after its trading update and share buyback announcement, while London Stock Exchange Group PLC (LSE:LSEG) advanced 3.6%.
Energy shares resisted the decline as Brent crude remained above US$111 a barrel, helping Ithaca Energy PLC (LSE:ITH) rise 2.1%.
Among mid-caps, Inchcape PLC (LSE:INCH) fell 6.7% and Bloomsbury Publishing PLC (LSE:BMY) lost 6.1%, while Princes Group PLC (LSE:PRN) led the risers with a 3.5% gain.
8.15 am BST: Selling spreads across London
London stocks opened sharply lower on Thursday as weakness across Asian markets and rising oil prices unsettled investors.
The FTSE 100 fell 82 points, or 0.8%, to 10,671, while the domestically focused FTSE 250 dropped 241 points, or 1%, to 24,199.
The weakness extended across the market, with the FTSE 350, All-Share and AIM All-Share each declining around 0.8%.
Mining shares were hit hard in London on Thursday as weaker copper prices, rising metal inventories and company-specific pressures triggered broad selling across some of the FTSE 100’s largest resources stocks.
Anglo American PLC (LSE:AAL) led the blue-chip fallers, dropping 4% to around 3,687p, while copper producer Antofagasta PLC (LSE:ANTO) fell 3% to 3,122p and precious metals miner Fresnillo PLC (LSE:FRES) declined 3% to 2,545p.
London Stock Exchange Group advanced 2.2% after third-quarter income grew 8.8% and the company raised its full-year revenue, margin and cash-flow guidance.
The group also agreed to acquire credit data provider Octus for US$3.54 billion as it expands in private and distressed credit markets.
Energy producers gained as Brent crude remained above US$111 a barrel, with Ithaca Energy rising 2.1%, BP adding 1% and Shell gaining 0.7%.
Defensive shares also attracted support, with Unilever, Imperial Brands and British American Tobacco gaining between 0.7% and 0.9%.
7:00 am: Asian sell-off weighs on London
London is set to open lower on Thursday as a sharp retreat across Asian technology shares outweighs an earnings-led advance on Wall Street.
The FTSE 100 was priced 44.5 points, or 0.4%, lower at 10,743.5 shortly before 7am, after the cash index closed 0.2% higher at 10,752.88 on Wednesday.
Wall Street advanced overnight, with the Nasdaq rising 1.1%, the Dow gaining 0.7% and the S&P 500 adding 0.6% following a series of strong corporate results.
The mood reversed across the ocean, where the ASX 200 closed 0.4%, lower, while Japan’s Nikkei fell 1.6%, South Korea’s Kospi dropped 2.6% and Hong Kong’s Hang Seng traded 2.7% lower.
Brent crude rose 2.4% to more than $111 a barrel, while gold fell 1.1% and copper declined 1.6%.
Sterling held near $1.33 following Wednesday’s stronger-than-expected UK inflation reading, while Bitcoin traded around $82,700.
Barclays, Sainsbury, London Stock Exchange Group, Rentokil Initial and InterContinental Hotels are among the companies updating investors today.
