For a second straight week, the artificial intelligence trade that carried this bull market wobbled. Last week the worry was valuations. The week ending Oct. 23, it was the bill.
Meta Platforms Inc. beat on revenue and guided above expectations, yet investors fixated on the cost. It raised the floor of its 2026 capital spending to $135 billion, burned $2.1 billion of cash in its first negative quarter in more than a decade, and created a non-voting share class to raise money. The stock fell nearly 7% on Thursday.
The Nasdaq 100 lost 2.9% that day, its worst session in four months, as chip stocks sank 6.7%.
The deeper anxiety sits in credit. CoreWeave Inc., the Nvidia-backed data center landlord, has bonds yielding near 15%, three times what the Treasury
pays. Its shares slid about 11% this week and nearly 40% in a month.
SpaceX offered the counterargument, posting its first profit since its IPO four months ago on revenue up 161% to $14.6 billion, half from AI computing.
"We are also frankly hounded relentlessly by every hyperscaler and by dozens of smaller companies to rent more of our compute," CEO Elon Musk said Tuesday. Shares jumped 9% Wednesday, then gave it all back Thursday.
The 10-year Treasury yield closed below 5% on Thursday for the first time since Sept. 21 and sat near 4.99% Friday, with the 30-year at 5.32% and the two-year at 4.69%. Traders see less than a 10% chance of a Federal Reserve hike at Wednesday's meeting and about 80% odds of one in December.
Michigan sentiment holds near record lows
The University of Michigan's final October consumer sentiment index came in at 48.0, up from a preliminary 46.3 and just below September's 48.1. Year-ahead inflation expectations rose to 4.7% and long-run to 3.5%, both the highest since May.
"Sentiment is now 10% below a year ago and 15% less than February, just prior to the Iran conflict," survey director Joanne Hsu said. "Purchasing power continues to dominate consumer views of the economy."
Detroit had a rougher week than Silicon Valley
General Motors Co. fell more than 10%, its steepest weekly drop in more than three years, even though third-quarter revenue of $50.02 billion and adjusted earnings of $3.70 a share beat estimates of $48.7 billion and $3.63. GM narrowed its full-year profit outlook, citing commodity and logistics costs.
Ford Motor Co. lost about 7% ahead of its earnings result next Wednesday, when Alphabet and Microsoft also report. Stellantis slid nearly 10% and is down 65% this year.
Benzinga is a financial news and data company headquartered in Detroit.
This article originally appeared on Detroit Free Press: Why Meta's spending sent stocks lower during a volatile market week
