Week ending 16 October 2026
Nasdaq 100: −5.49%
S&P 500: −1.95%
My portfolio: −5.00%
Market pulse
American equities declined as a sharp selloff in AI and semiconductor stocks outweighed resilience elsewhere. The Nasdaq 100 fell 5.49%, while the S&P 500 lost 1.95%. Semiconductor shares were particularly weak, with the Philadelphia Semiconductor Index dropping 11.4%. Rotation into healthcare and other sectors cushioned the broader market, allowing the Dow to finish approximately 0.7% higher despite the technology retreat.
The financing behind the AI investment boom became the central concern. Pressure on CoreWeave’s shares and bonds intensified scrutiny of the debt supporting infrastructure expansion and the financial relationships between equipment suppliers and their customers. Investors increasingly questioned whether projected revenues would justify enormous spending commitments. Reports of technological progress at Chinese memory producer CXMT added competitive concerns for memory-chip manufacturers. By Friday, the selling had spread decisively into software, undermining the distinction between infrastructure providers and companies expected to benefit from applying AI.
Inflation reinforced the pressure. September consumer-price inflation accelerated to 3.7% year-on-year, while the monthly core increase of 0.3% exceeded expectations. Producer prices subsequently jumped 1.3%, substantially above forecasts, reviving concerns about further Federal Reserve tightening. Oil compounded the problem: Brent gained 4.9% over the week to $109.86 a barrel amid renewed Middle Eastern supply concerns and uncertainty surrounding Russian fuel supplies. Treasury yields nevertheless finished lower as investors sought safety, indicating that the equity selloff was not simply a response to rising government borrowing costs.
Crowd vs. price
The market became less willing to treat AI spending as an automatic positive. For chipmakers, the question was whether customers could continue financing expansion at the expected pace. For platforms such as Meta, it was whether additional investment would generate enough revenue to protect profitability and cash flow. For highly valued software companies such as Palantir, even supportive analyst commentary offered limited protection once investors began reducing exposure. The week was less about AI losing its commercial potential than about investors demanding stronger justification for the valuations and financial commitments built around it.
Holdings & Watchlist Notes
Meta: −1.30%
Meta’s modest weekly decline concealed a sharp reversal. The shares gained 6.10% through Tuesday’s close following the launch of new AI models, before falling 6.97% over the remaining three sessions. Wednesday’s inflation-driven technology selloff and renewed selling on Friday overwhelmed the early optimism. The prospective cost of Meta’s strategy also remained in focus: Guggenheim increased its estimate of 2027 capital expenditure to $225 billion from $203 billion. This was an analyst forecast rather than new company guidance, and the broker retained its Buy recommendation. The week highlighted the tension between enthusiasm for Meta’s AI progress and concern about the spending required to commercialise it.