Wall Street Falls as AI Selloff and SpaceX Fears Hit Stocks

Wall Street‘s major stock indexes were set to open lower on Friday, October 23, as investors remained cautious following a sharp selloff in Artificial Intelligence-related shares. Telecommunications stocks also came under pressure amid concerns that SpaceX could enter the nationwide wireless market and intensify competition for established US mobile carriers.

Shares of AT&T, Verizon and T-Mobile each fell around 5% in premarket trading after a report said SpaceX was in discussions with cellular infrastructure companies about launching a nationwide wireless carrier programme. The prospect of a new competitor raised concerns that established telecom operators could face pressure on their market share and future revenue growth.

However, the news had the opposite effect on US cell tower operators. Crown Castle shares rose 10.5%, while American Tower gained 7.3% in premarket trading. SpaceX shares advanced 2.1%.

The contrasting market reactions highlighted how a potential expansion by SpaceX into wireless services could affect different parts of the telecommunications industry. While mobile carriers faced concerns about increased competition, investors appeared more positive about the potential implications for companies operating cellular infrastructure.

Wall Street Futures Fall as Investors Reassess AI Stocks

US stock futures were lower ahead of the opening bell as investors assessed the latest volatility in technology shares. At 8:37 a.m. ET, Dow E-minis were down 447 points, or 0.84%, while S&P 500 E-minis fell 34.5 points, or 0.45%. Nasdaq 100 E-minis declined 81.25 points, or 0.28%.

The cautious mood followed Thursday’s sharp reversal in AI-related stocks. The technology-heavy Nasdaq Composite fell nearly 3% as selling pressure intensified across parts of the technology sector.

The decline followed an earlier rally on Wednesday, when upbeat results from SpaceX and Super Micro helped support investor sentiment. The gains proved short-lived, however, as renewed concerns about the cost of artificial intelligence investment and the financial risks associated with the sector returned to the forefront.

Investors have increasingly scrutinised the enormous spending commitments required to develop AI infrastructure, including computing capacity, data centres and advanced chips. Although companies continue to invest heavily in the technology, markets are also looking for evidence that those investments can generate sufficient returns.

Meta’s Decline Intensifies Concerns Over AI Spending

Meta Platforms was among the major technology stocks facing renewed pressure on Thursday, with its shares falling nearly 8%. The decline followed the Facebook parent’s latest financial results, which highlighted its first cash outflow in more than a decade amid concerns about AI-related expenditure.

The company’s spending plans have become a focus for investors evaluating whether the long-term benefits of artificial intelligence will justify the substantial costs involved. Technology companies are committing significant resources to AI infrastructure and development, but the timing and scale of potential returns remain important considerations for the market.

On Friday, Meta shares slipped another 0.9% in premarket trading. CoreWeave, which has attracted attention because of its debt burden and the financing required for AI investment, fell 1.1%.

Shares of the so-called Magnificent Seven group of major technology companies were otherwise little changed in early trading. The group is closely watched because its members account for a substantial portion of market attention and have been central to the recent enthusiasm surrounding AI.

Kim Forrest, chief investment officer at Bokeh Capital Partners, said the recent selloff appeared extreme in the short term and argued that the broader AI investment cycle was still at an early stage. Her comments reflected the view that investors may be reassessing the pace of AI-related growth rather than abandoning the technology altogether.

AI Investment Costs Remain a Key Concern for Investors

AI-related stocks have experienced sharp swings during October as investors weighed the financial risks associated with building and operating large-scale AI infrastructure.

Earlier in the month, concerns about CoreWeave’s debt and the cost of financing AI investment contributed to selling pressure. Optimism returned on Wednesday following positive results from SpaceX and Super Micro, but the rally reversed a day later as investors renewed their focus on spending requirements and the path to profitability.

This volatility reflects a broader challenge for technology companies. AI adoption could create opportunities across software, cloud computing and enterprise services, but the infrastructure required to support advanced models demands substantial investment.

Investors are therefore looking beyond revenue growth and assessing capital expenditure, financing costs, cash generation and the potential returns on AI-related spending. Companies that demonstrate strong demand alongside sustainable financial performance may face different market reactions from businesses whose investment plans raise concerns about cash flow.

Big Tech Earnings in Focus Next Week

The upcoming earnings calendar is expected to play a major role in determining market sentiment. Microsoft, Alphabet and Amazon are scheduled to report results next week, giving investors further information about the performance of major technology businesses and their spending plans.

These reports could provide fresh insight into demand for cloud computing, AI-related services and enterprise technology. Investors will also examine how companies are balancing infrastructure investment with profitability and cash generation.

The earnings season has already influenced expectations for corporate performance. According to LSEG data, forecast third-quarter profit growth for S&P 500 companies has increased to 32.3%, up from the previous estimate of 30.7%.

Stronger earnings expectations could help support the broader market, although the impact will depend on whether companies meet forecasts and provide guidance that reassures investors about future growth.

Brent Crude Prices Add to Inflation Concerns

Oil prices remained another important factor for financial markets on Friday, with Brent crude holding near a more than five-month high amid concerns about Middle East supplies.

Elevated energy prices can contribute to inflation by increasing costs for transport, manufacturing and other business activities. If energy costs remain high, they could complicate the outlook for inflation and influence expectations about the direction of US monetary policy.

Investors are watching these developments ahead of the Federal Reserve’s policy meeting next week. Market pricing indicated that traders expected the central bank to leave interest rates unchanged at the meeting.

Bets on an interest-rate increase this month had declined after several Federal Reserve officials signalled that there was little urgency for such a move. Nevertheless, the outlook remains sensitive to incoming economic data and changes in inflation expectations.

Higher borrowing costs can weigh on technology and growth stocks because they affect the value investors place on future earnings. This makes the interaction between energy prices, inflation and interest-rate expectations particularly relevant during periods of volatility in technology shares.

Consumer Sentiment Data Also on Investors’ Radar

Investors were also preparing to assess the final University of Michigan consumer sentiment reading later on Friday. Consumer sentiment is an important indicator of how households view economic conditions, inflation and their own financial prospects.

Changes in consumer confidence can influence expectations for household spending, which remains an important driver of the US economy. The latest reading could provide additional context for investors assessing the economic outlook alongside corporate earnings and developments in financial markets.

With technology shares under pressure and energy prices elevated, investors are balancing concerns about inflation and corporate spending against expectations for continued economic activity.

Nasdaq Faces Weekly Loss as Defensive Stocks Attract Investors

The Nasdaq was on track to record a weekly loss following the latest decline in technology stocks. By contrast, the S&P 500 and the Dow Jones Industrial Average remained on course for weekly gains, supported by advances in defensive sectors.

Defensive stocks are often seen as relatively resilient during periods of market uncertainty because their businesses may be less sensitive to economic cycles than those in more growth-oriented sectors. Investors seeking to reduce exposure to volatile technology shares have therefore helped support parts of the broader market.

However, the differing performance of the major indexes shows that the recent selling pressure has not affected every sector equally. The direction of markets in the coming sessions may depend on earnings results, inflation data, interest-rate expectations and further developments in the AI industry.

Other Stocks to Watch in Premarket Trading

Several companies outside the technology and telecommunications sectors also recorded notable moves before the opening bell on Friday.

• American Express: Shares fell 2% despite the company raising its profit forecast for 2026 after reporting strong third-quarter results. The decline indicated that the improved outlook did not prevent selling in the stock during premarket trading.
• SLB: Shares rose 2.1% after the oilfield services provider reported third-quarter profit above Wall Street estimates.
• Newmont: Shares declined 1.7% after the gold miner reported quarterly results and warned that unit costs were expected to trend higher in 2027.
• Bloom Energy: Shares dipped 4% even after the energy company raised its fiscal 2026 forecast.
• SpaceX: Shares gained 2.1% as investors assessed reports about the company’s potential expansion into nationwide wireless services.
• Crown Castle and American Tower: The US cell tower operators rose 10.5% and 7.3%, respectively, as the reported discussions involving SpaceX lifted their shares.

What to Watch on Wall Street

Wall Street’s near-term direction is likely to depend on whether investors regain confidence in AI-related spending, how major technology companies perform during the upcoming earnings season and whether inflation pressures remain elevated.

The potential entry of SpaceX into the US wireless market has also introduced another competitive issue for telecommunications investors. Established mobile carriers faced concerns about possible market-share pressure, while cell tower operators rallied on expectations that the changing industry landscape could create opportunities for infrastructure providers.

At the same time, elevated oil prices and the upcoming Federal Reserve meeting are keeping inflation and monetary policy in focus. The latest market movements suggest that investors are becoming more selective, weighing corporate growth prospects against financing costs, cash flow and competitive risks.

Although analysts’ forecasts point to stronger third-quarter profit growth across the S&P 500, the recent volatility shows that positive earnings expectations alone may not be enough to prevent sharp stock-price swings. Investors will be looking for clearer evidence that companies can sustain growth while managing the costs and risks associated with an increasingly competitive technology landscape.