Nasdaq falls 2% as AI concerns trigger tech selloff

US stock index futures were mixed on Friday, October 16, 2026, as technology stocks came under fresh pressure. The Nasdaq Composite tumbled 2%, driven by a sharp selloff in the sector. This decline occurred amid persistent worries about cracks building in the artificial intelligence rally.

Asian stocks had previously slid to a more than two-month low on Tuesday, October 13, due to similar AI-related jitters. On Friday, European stock markets finished higher, but the Nasdaq was penalized again by tech stocks. The broader market showed mixed signals, with Tesla gaining while other technology names remained fragile.

Traders evaluated concerns regarding excessive spending in the artificial intelligence sector. The market reaction followed a period where the AI rally wobbled, shifting focus to corporate earnings. Despite the recent volatility, the Nasdaq had established a record high in September, though the current session saw a significant reversal. The 10-year Treasury yield wavered, and oil prices dropped ahead of the U.S. employment report for September, which contributed to the mixed sentiment in stock futures.

The selloff was fueled by specific stocks that drove the index lower, reflecting broader market anxiety over the sustainability of AI-driven growth. While some defensive assets were considered by investors, the immediate impact on the Nasdaq was negative. The market opened without a clear direction, with technology stocks remaining the primary source of weakness. This session marked a continuation of the pressure on tech-heavy indices, contrasting with the weekly gains seen in major indexes earlier in the month.