Nasdaq falls as AI concerns and oil price spike hit tech stocks

Wall Street ended sharply lower on Friday, October 16, 2026, as technology stocks came under renewed pressure amid growing concerns about cracks in the artificial intelligence sector. The S&P 500 lost 1.1% for the day, while the Nasdaq Composite also declined, contributing to steep weekly losses for both major indices.

The selloff was driven by worries over AI financing and rising costs, which unsettled investors and led to a drop in AI-linked chip and data-center stocks. Memory firms fell, and supply fears further weighed on the sector. Specific cybersecurity stocks were hit hard by the jitters, with Palo Alto Networks falling 7%, SentinelOne sinking 9%, and Zscaler dropping 6%.

Major technology names, including CoreWeave and Broadcom, faced renewed pressure, dragging the broader market lower. The decline in tech stocks offset gains in other sectors, such as banks, which helped keep the S&P 500's loss contained relative to the Nasdaq.

Adding to market volatility, oil prices topped $110 per barrel. This jump in energy costs spooked traders heading into the weekend, compounding the anxiety surrounding the tech sector's performance. The combination of AI-specific jitters and higher oil prices created a challenging environment for equity markets, resulting in a sharp close for the week.