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— Lim Hui Jie, Leonie Kidd, Anniek Bao and Justina Lee
Halloween is still about a week away, but markets are already getting some of the heebiee-jeebees.
Investors saw a sell-off in U.S. markets as renewed concerns around spending by artificial intelligence companies came to the fore, while oil prices jumped amid rising geopolitical tensions.
The tech-heavy Nasdaq tumbled over 2%, marking its worst day since June, while the S&P 500 recorded it’s largest decline since July and dipped 1.2%.
One major tech name leading the losses was Meta, which slumped nearly 7% on Thursday as the social media giant showed negative free cash flow in its third-quarter earnings and raised the floor of its full-year capital expenditures.
Meta said it expects its full-year capex to range from $135 billion to $145 billion, raising the bottom of the range from a previous $130 billion, while free cash flow came in at a negative $2.12 billion during the quarter.
The cash fleeing the stock markets seem to have found their space in the bond markets, where the benchmark 10-year U.S. Treasury yield slid more than 17 basis points to 4.972%.
This was the first time yields went below 5% in about a month, and the biggest one-day decline since March 2023.
Brent crude futures gained 4% to close at $113.17 per barrel, the highest level for the international benchmark since May 4. U.S. West Texas Intermediate gained 2.4% to settle at $99.47. Oil prices were up in early Asia trade.
The rise comes after the New York Times, citing U.S. officials reported that U.S. and Israeli militaries have drawn up specific plans for renewed strikes on Iran after next month’s midterm elections.
Musk and midterms
Elsewhere, the Tesla CEO Elon Musk is still in the headlines as he spends record sums to help decide who controls the federal government in the 2026 midterm election.
SpaceX has racked up at least $6.78 billion in federal work so far through Oct. 1 this year, according to FedScout, a research firm that tracks government spending and contracts, nearly twice its total for all of 2024.
At the same time, Musk has committed roughly $366 million to the 2026 election cycle across at least 40 races, making the world’s richest person the midterms’ biggest individual donor so far.
At least $276 million of that money has flowed to Republican groups and Musk’s own political operation, America PAC, since July, according to a CNBC analysis of Federal Election Commission filings.
The billionaire has also invested roughly $1 billion in Skydance, according to a person familiar with the matter who asked not to be named because they were not authorized to speak publicly.
Musk’s commitment is part of a wider effort by Skydance to raise equity investments, according to Semafor, which first reported the news Thursday.
A better 2027?
2026 has yet to end, but Pershing Square CEO Bill Ackman is already optimistic about the next year.
Ackman told CNBC’s “Squawk on the Street” that two geopolitical conflicts — the Ukraine-Russia and Iran wars — along with elevated inflation and interest rates are holding back an otherwise “booming market environment.”
“We’re going to have an amazing 2027,” he said, adding that when both wars are done, energy prices will come down, and that will be “very good” for markets.
Higher crude prices have pressured stocks all year, as traders fear elevated energy costs will drive up inflation and force the Federal Reserve to raise rates. U.S. oil is up 72% in 2026, while Brent crude has surged 83%.
— Lim Hui Jie