Nasdaq tumbles while treasuries soar as Meta rekindles AI spending fears

Meta triggered a major US tech sell-off, erasing $124 billion from its market value after announcing plans to raise hundreds of billions for AI investments. The forecast reignited concerns over debt-funded AI sustainability, driving the Nasdaq down 2.9% and prompting investors to seek safety in US Treasuries. Other major tech and chip stocks also plummeted..By George Steer.Social media group’s market value sinks by $124bn after it says it will raise ‘hundreds of billions of dollars’ in coming yearsMeta led a sharp US tech stock sell-off on Thursday as the group’s blockbuster spending plans reignited concerns about the sustainability of the debt-fuelled AI infrastructure boom and triggered a rush into Treasuries.Shares in Mark Zuckerberg’s social media group tumbled 7 per cent after it forecast that it would need to raise “hundreds of billions of dollars” over several years to fund its bet on AI. The stock’s decline stripped about $124bn from Meta’s market value.The tech-heavy Nasdaq 100 slid 2.9 per cent while the blue-chip S&P 500 dropped 1.2 per cent.US Treasuries rallied strongly as traders raced into haven assets. Ten-year US government bond yields fell 0.16 percentage points to just below 5 per cent in the best one-day performance since 2024.“The Treasury market rally today isn’t in response to any fundamental data we’ve had lately. It’s all to do with potential cracks in the AI trade,” said Jon Hill, head of US inflation strategy at Barclays.Shares in SpaceX fell 9.1 per cent, erasing most of the gains earlier this week that came after Elon Musk’s rockets and AI group said revenue more than doubled in the third quarter. Tesla shares were down 3.1 per cent.Chip stocks, which have been among the year’s top performers on bets for huge demand for the hardware underpinning the AI boom, were also caught up in the selling. The Philadelphia semiconductor index slid almost 7 per cent, with one trader noting that there was heavy selling in previously highflying stocks.South Korean chipmaker SK Hynix on Thursday said it would not pursue the US initial public offering of its California-based subsidiary Solidigm, which designs and manufactures memory hardware. SK Hynix said it made the decision “in light of recent capital market conditions and share price trends” rather than any change in the subsidiary’s performance..US tech stocks have been hit with bouts of volatility since marking a record high in early October, as investors fret over whether the huge rise in AI stocks and big debt issuance to finance data centres and chips has gone too far.“This is really coming down to the AI story on all fronts. Will the market be able to absorb all of the AI spend?” said Peter Tchir, head of macro strategy at Academy Securities.Meta warned in a filing alongside its quarterly results on Wednesday afternoon that there was an “increasingly challenging environment for raising capital” as many of its large rivals such as Alphabet launch huge debt deals and big AI companies including Anthropic and OpenAI plot massive IPOs following SpaceX’s market debut.Traders have piled into credit default swaps linked to tech bonds. The spread on Meta’s five-year CDS jumped almost 10 basis points to about 116bp, the highest level since they started trading last year.On Wednesday, Treasury secretary Scott Bessent told investors in a private meeting that he did not see a “systemic problem” with the AI boom.The growing concerns over AI added to investor worries over a surge in oil prices and a government bond sell-off in France.Brent crude settled 4 per cent higher at $113.17 per barrel, touching intraday levels last seen during the early months of the Iran war, after Iran-backed Houthi militants escalated their attacks on Saudi Arabia.“The risk of escalation in the Middle East is back to the forefront of investors’ minds,” said Van Luu, global head of solutions strategy at asset manager Russell Investments, pointing to the US decision to order some personnel to leave Saudi Arabia..The region-wide Stoxx 600 Europe index dropped 1.1 per cent, while the riskier corners of the region’s bond markets, such as France, suffered, with investors scurrying for the safety of US Treasuries.Falling stocks and the rush for haven bonds “reflect traders’ rising risk aversion”, said Luu.The centre of the Eurozone bond sell-off remained France, whose 10-year yield — which climbed above 5 per cent on Wednesday for the first time since 2002 — jumped another 0.07 percentage points to 5.08 per cent.Widening spreads on Eurozone bonds fed anxiety about the fallout for the euro area economy. France’s 10-year additional yield above German Bunds, a key measure of investor anxiety, rose to more than 1.7 percentage points, its highest since its 2011 peak during the Eurozone debt crisis.Other Eurozone spreads, being closely watched by the European Central Bank amid fears of a public debt crunch, also widened. Italy’s rose to 1.2 percentage points, while Belgium’s climbed to 1.1 percentage points, touching its highest level since 2012.French and Italian bond markets had gone into a “tailspin”, said Rohan Khanna, head of European rates research at Barclays, as traders with large amounts of leverage exited their positions and markets bet that support from the ECB remains far off.“There is general appreciation of the fact that we are far away from a safety valve being triggered,” he added.Jens Eisenschmidt, a former ECB employee and now Morgan Stanley’s Eurozone economist, suggested that a temporary pause of the ECB’s so-called quantitative tightening programme to shrink its balance sheet — which would mean it instead reinvests the proceeds from maturing bonds — could “take some pressure off longer-term yield increases across the board”.However, Eisenschmidt stressed that a rise in French yields while Germany’s fell was “typical of a risk-off market environment” and reflected concerns “clearly linked to a single country”.Additional reporting by Antoine Gara in New York, Olaf Storbeck in Frankfurt, Chris Johnston in Hong Kong and David Keohane in Tokyo.© 2026 The Financial Times Ltd. .Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. 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Nasdaq tumbles while treasuries soar as Meta rekindles AI spending fears

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