Wall Street closes lower over AI costs, earnings and Fed meeting

Wall Street’s main indexes closed lower on Friday, October 23, 2026, wrapping up a turbulent week as technology shares steadied slightly while investors weighed heavy artificial intelligence infrastructure costs, upcoming corporate earnings, and an impending Federal Reserve policy meeting, Reuters reported.

Nasdaq Stabilizes After AI Spending Anxiety Triggers Losses

The Nasdaq Composite posted a slim loss on Friday, stabilizing somewhat a day after suffering its biggest one-day drop since June amid growing anxiety over the massive borrowing and financing expenses required to support heavy AI investment spending. The S&P 500 technology sector managed a modest 0.35% gain on Friday. However, broader market pressure dominated the session.

Most S&P 500 sectors retreated. Consumer staples, consumer discretionary, and financials all recorded declines of well over 1%. The Dow Jones Industrial Average fell 652.82 points, or 1.23%, to settle at 52,215.16. The S&P 500 lost 39.75 points, or 0.52%, to close at 7,623.68, while the Nasdaq dropped 53.52 points, or 0.21%, to finish at 25,955.34. For the full week, the S&P 500 fell 0.5% and the Nasdaq dropped 0.7%, whereas the blue-chip Dow gained 0.4% to mark its third straight weekly advance, according to Reuters figures.

Market strategists pointed to ongoing friction within high-flying tech valuations. Kristina Hooper, chief market strategist at Man Group, noted that fallout from questioning the AI trade remains visible. She observed that potential reductions in projected data center build-outs for the upcoming year are giving investors pause.

Meanwhile, alternative perspectives emerged across financial desks. Jed Ellerbroek, portfolio manager at Argent Capital Management, told CNBC that investors had spent two weeks sprinting from tech and data center beneficiaries into safe-haven assets until the market ran out of participants willing to maintain that flight. Ellerbroek added that incoming tech earnings reports have largely proven strong, giving investors concrete fundamentals to focus on rather than emotion-driven caution.

S&P 500 Companies Track Strong Third-Quarter Earnings Growth

Corporate profit growth overall continued to underpin major equity indexes. S&P 500 companies are on track to increase third-quarter earnings by more than 32%, according to LSEG IBES data cited by Reuters. The upcoming week features quarterly reports from approximately one-third of S&P 500 companies, including major AI hyperscalers Alphabet, Microsoft, and Amazon, whose capital spending forecasts will face intense scrutiny.

Financial institutions experienced headwinds on Friday despite strong reported profits. American Express shares fell 3.7%, pressuring the Dow after the firm raised its profit forecast while simultaneously announcing plans to eliminate 5% of its global workforce to prepare for operational shifts including AI integration. Other financial institutions also retreated, with JPMorgan Chase, Citigroup, and Capital One Financial sliding between 1% and 1.5%.

On the macroeconomic front, the Federal Reserve is widely expected to keep interest rates steady when it issues its policy statement on Wednesday. Investors remain focused on signals regarding potential rate adjustments at the December policy meeting, alongside approaching November 3 midterm elections that will determine control of the U.S. Congress.

More on this story: Nasdaq sheds 2.14% in worst week since June as AI stocks pull back · Tech Stocks Slide and Oil Jumps as AI Spending Concerns Rise

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