Nasdaq Composite drops 2.6% on AI spending worries

The session's declines came as investors reassessed the cash costs of artificial intelligence infrastructure. Meta Platforms told the market it expects capital expenditures of $135 billion to $145 billion, raising the bottom end from prior guidance of $130 billion, and its quarterly free cash flow turned negative, according to Saxo Bank. Saxo Bank noted that growing revenue does not automatically translate into growing cash for shareholders and flagged the risk that AI infrastructure costs outpace the profits they generate. Tesla's disappointing third-quarter operating margin also reflected a ramp in AI investments, Truist Securities said, potentially weighing on near-term earnings. The pullback was not uniform: Procter & Gamble jumped 5.6% after lifting its full-year sales growth outlook, and Treasury yields slumped as capital sought a traditional safe haven amid international uncertainty, including escalating unease in France, Stifel said.