Nasdaq drops 2.6% as AI spending fears hit tech stocks

The Nasdaq Composite fell 2.6% on Thursday, its worst daily drop since early July, amid a broad selloff in technology stocks driven by investor doubts about artificial intelligence spending. Credit markets showed rising alarm as five-year credit default swap spreads widened for tech firms like Oracle and SoftBank Group, as well as for French and Italian government bonds. Nvidia CEO Jensen Huang confirmed surging demand for next-generation cloud computing but warned of a shortage of available capital. On October 19, the Nasdaq had already dropped 4.5% and the Cboe volatility index hit its highest level since June. Analysts at BTIG advised selling into any rebound, while other market participants viewed the decline as a buying opportunity.