S&P 500 and Nasdaq close sharply lower as AI stock selloff weighs on markets

Hot inflation data and mounting data center debt worries sent tech stocks sliding, handing the Nasdaq its worst week in 18 months The AI trade had a rough day at the office. On October 16, 2026, the S&P 500 fell approximately 1.2% to close near 7,650, while the Nasdaq Composite dropped about 2.2% to finish near 26,128. The tech-heavy Nasdaq logged its steepest weekly decline in 18 months, capping a stretch that started with inflation surprises and ended with a debt scare. The semiconductor index slid 1.8%, its sharpest drop since the “Liberation Day” selloff in April 2025. Meta and Microsoft both declined, a sign the anxiety extended past pure-play hardware names into the companies doing much of the AI spending.

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