AI Stocks Slide After Earnings Disappoint; French Bonds Tumble and Oil Tops $112 — Update

By Joe Stonor

Artificial-intelligence stocks slid across the globe and investors turned to the safety of Treasurys, as a renewed selloff in French government bonds and a fresh run-up in oil prices strained markets.

Nasdaq futures dropped 1.55% after a bevy of earnings releases from AI companies disappointed investors and put an abrupt stop to Wednesday's relief rally. Meta Platforms fell 3% premarket despite notching strong revenue growth, while Lam Research and IBM dropped 8.4% and 6.5%,respectively, in premarket trade. Meta left the top of its capital expenditure guidance unmoved, while Tesla--down 3.7% premarket--unexpectedly reported lower capital expenditure, adding to investor concerns that the AI boom is slowing. AI stocks also fell across Europe and Asia, where South Korea's memory chip-dominated Kospi closed down 3.5%.

"The problem here is that expectations are quite high going into the quarter," said Quilter Cheviot's head of technology research Ben Barringer. "It's a difficult setup because you've got to smash it out the park to get your stock to work."

S&P 500 futures also fell--down 0.9%--while futures for the Dow Jones Industrial Average slipped 0.6%. Higher oil prices and the jump in French borrowing costs added to headwinds for European indexes, all of which fell sharply. The Stoxx 600 was down 0.8%.

Benchmark Brent crude oil prices rose 2.9% to hover around $112 a barrel, while West Texas Intermediate contracts for December delivery moved toward $100 a barrel. Renewed attacks on Saudi energy infrastructure added to concerns the U.S. and Israel could renew direct hostilities against Iran. Saudi Arabia's energy ministry said Wednesday that air defenses intercepted a drone targeting a facility at Saudi Aramco's Shaybah oil field.

In the bond market, investors ditched French government bonds, with the spread between yields on 10-year French OATs and the equivalent German bond widening to 164 basis points--the highest such level since 2011. Ten-year OAT yields jumped 7.6 basis points to 5.077%, levels not seen since 2002.

In the U.S., Treasurys strengthened as AI-weary investors turned to safe havens. Ten-year Treasury yields fell by more than 10 basis points to trade below 5.040%, while 30-year yields fell 8.7 basis points to trade around 5.350%. The dollar weakened, while the pullback from risk dragged bitcoin down more than 3% to below $82,000. Gold futures fell 1.5% in New York to below $4,100 a troy ounce. Yields on two-year Treasurys slipped 9 basis points to trade around 4.730%, though falls were pared slightly after U.S. jobless claims came in below expectations.

For the day ahead, AI investors will look to earnings from Western Digital after the close.

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

(END) Dow Jones Newswires

October 22, 2026 09:18 ET (13:18 GMT)