AI Selloff Returns, Oil Tops $110 a Barrel — Update

By Joe Stonor

A recovery in artificial intelligence stocks faltered while benchmark oil prices jumped above $111 a barrel, as investors once again pulled back from risk.

Nasdaq futures fell 0.7%, putting an abrupt brake on the index's Monday rally. AI infrastructure stocks came under pressure across the globe, with signs of strain visible in Asia and Europe. Shares in South Korean data-center startup Elice tumbled as much as 33% on its stock market debut, while Swiss engineering group ABB fell close to 6% even after raising its full-year guidance. Chip makers and AI infrastructure groups slid in U.S. premarket trade, too. CoreWeave--whose soaring credit costs helped prompt last week's selloff in AI stocks--dropped 4% premarket. Futures for the S&P 500 fell 0.3%, while Dow Jones Industrial Average futures were flat.

The fresh run-up in oil prices further damped market sentiment. Front-month Brent crude contract topped $111 a barrel, on track for its highest close since May, as supply risks in the Middle East mounted. Analysts at ANZ pointed to a marked increase in attacks on ships in the Persian Gulf.

Treasurys strengthened despite the rise in oil prices. Ten-year Treasury yields traded below 5.110%, while 30-year yields hovered around 5.455%, as government bonds again benefited from a flight to safety. Markets have significantly pulled back on their bets for an October Federal Reserve rate hike, with investors pricing an 82.8% chance of a hold, according to LSEG.

The dollar weakened and bitcoin fell by 0.7% to $81,332. New York gold contracts slipped below $4,150 a troy ounce.

SpaceX reports third-quarter earnings after the closing bell, with investors likely to train a close eye on the Elon Musk-run company's AI spending. Netflix earnings are also in focus Tuesday after two of the streaming giant's top creative executives left the company over the last week.

Write to Joe Stonor at josephmichael.stonor@wsj.com

(END) Dow Jones Newswires

October 20, 2026 08:44 ET (12:44 GMT)