Markets experienced a significant sell-off on October 23, 2026, driven by renewed concerns about artificial intelligence spending by major technology companies [1]. The tech-heavy Nasdaq tumbled over 2%, marking its worst day since June, while the S&P 500 recorded its largest decline since July, dipping 1.2% [1]. Meta was particularly hard hit, slumping nearly 7% on Thursday after reporting negative free cash flow of $2.12 billion during Q3 and raising the floor of its full-year capital expenditures to a range of $135 billion to $145 billion, up from a previous floor of $130 billion [1].
Fixed income markets reflected the broader risk-off sentiment, with the benchmark 10-year U.S. Treasury yield sliding more than 17 basis points to 4.972%, marking the first time yields went below 5% in about a month and representing the biggest one-day drop since March 2023 [1]. Energy markets moved in the opposite direction, with Brent crude futures gaining 4% to close at $113.17 per barrel—the highest level for the international benchmark since May 4—and U.S. West Texas Intermediate gaining 2.4% to settle at $99.47 [1]. The oil price surge was attributed to reports that U.S. and Israeli militaries have drawn up specific plans for renewed strikes on Iran after next month's midterm elections [1]. Year-to-date, U.S. oil is up 72% in 2026, while Brent crude has surged 83% [1].
Despite the near-term market turbulence, Pershing Square CEO Bill Ackman expressed optimism about 2027, telling CNBC's "Squawk on the Street" that two geopolitical conflicts—the Ukraine-Russia and Iran wars—along with elevated inflation and interest rates are currently holding back an otherwise "booming market environment," predicting "We're going to have an amazing 2027" [1].
CONCLUSION
The market sell-off reflects investor anxiety over escalating AI capital expenditures by major tech companies, exemplified by Meta's negative free cash flow and raised CapEx guidance, which triggered broad equity declines and Treasury yield compression. However, geopolitical tensions are simultaneously driving energy prices higher, while some market observers remain constructive on 2027 prospects pending resolution of current conflicts and inflation pressures.