Nasdaq 100 drops 1.8% as Meta tumbles and oil prices climb

West Texas Intermediate crude oil rose 1.8% to $98.94 a barrel, while yields on 10-year Treasuries retreated to 5.02%. The US ordered some diplomats and their families out of Saudi Arabia because of the threat from Houthi militants, and at least four people were killed by attacks on an Aramco oil site and a Saudi Arabian airport on Wednesday. “Investors should stay invested for further equity gains via broadly diversified exposure across sectors and regions,” while building resilience via fixed income and commodities, Ulrike Hoffmann-Burchardi, UBS global equities head said in a note.

Meta slid 6.1%, the most intraday since late July, even after reporting better-than-expected results and boosting its capital spending outlook. Shares had initially traded higher following the results, as CEO Mark Zuckerberg touted its AI agent Muse. On Thursday, a gauge of the company’s credit risk surged to a fresh record as spending plans reignited fears tech giants will issue more debt in an already-saturated market.

Tesla Inc. shares shed 0.072% after the electric-car maker cut its spending plans. Elevated operating expenses underscored the cost of its AI, robotics and autonomy push. The sector faces broad threats, according to Apollo Chief Economist Torsten Slok. “If the AI payoff is slow to materialize or never arrives, venture capital returns would come under pressure, since the capital funding today’s token spending would have little to show for it, and a pullback in venture funding could in turn weaken demand for compute,” he warned in a note.

Chipmakers and other tech stocks fell after reports from Tesla, Lam Research Corp. and IBM underwhelmed, weighing on growth sectors and pushing cryptocurrency-linked names lower. Lam Research’s weaker-than-expected guidance weighed on the broader chip-equipment complex, overshadowing a beat from Texas Instruments Inc. Apple Inc. rose 0.2% as it’s Wall Street’s favorite AI haven. Developments in Europe also spurred unease, as French bond stress deepened with investors ditching riskier assets around the world.

“German bunds and US Treasuries are the flight to safety trade in the face of this, for now,” Peter Boockvar, author of The Boock Report, wrote in a note. He expects that “at least in the short term, yields in the US have seen a temporary peak.”