New York stocks plummeted, led by technology shares, on October 22 (local time) as skepticism over artificial intelligence (AI) investments resurfaced.

On this day, the Dow Jones Industrial Average finished up 11.89 points, or 0.02%, at 52,867.98.

In contrast, the S&P 500 index fell 93.74 points, or 1.21%, to 7,663.43, while the tech-heavy Nasdaq composite index tumbled 694.00 points, or 2.60%, to close at 26,008.86.

Notably, the Nasdaq index recorded its largest drop since June.

Triggered by earnings reports from major tech companies like Meta, investor sentiment contracted sharply amid growing concerns over how astronomical AI investment costs will be financed and whether commensurate profits can be generated.

Although Meta reported third-quarter earnings that beat market expectations, it announced plans to issue a new class of non-voting shares to secure the funds necessary for expanding AI investments.

Meta also raised the lower end of its capital expenditure forecast for the year from the previous $130 billion to $145 billion to a range of $135 billion to $145 billion.

Future spending commitments increased from about $700 billion in July to $825 billion.

In particular, Meta's third-quarter free cash flow stood at minus $2.12 billion, marking its first deficit since going public.

Consequently, concerns spread among investors that the burden of AI investments might exceed companies' internal cash generation capabilities.

Michael Antonelli, a market strategist at asset management firm Baird Private Wealth Management, said, "The concern surrounding AI is no longer about the technology itself. The problem is how everyone can finance it all at the same time."

Meta shares plunged about 7% on this day.

The Philadelphia Semiconductor Index, which includes Nvidia (-4.4%) and Micron (-6.3%), also dropped 6.7%.

SpaceX, which had announced its first quarterly profit on October 20, fell 9.1%, and Tesla dropped 3.1% due to disappointing earnings.

Selling spread not only to major tech firms such as Alphabet (-3.2%) and Amazon (-4.6%), but also to data center-related companies.

Conversely, funds exiting tech stocks flowed into sectors relatively distant from the AI investment frenzy, leading to strength in some defensive and financial stocks.

As funds flocked to safe-haven U.S. Treasuries, Treasury yields plummeted.

The yield on the benchmark 10-year U.S. Treasury note dropped 19.3 basis points to close at 4.952%.

This marked the largest single-day decline since the U.S. regional banking crisis in March 2023.

The surge in international oil prices, driven by escalating geopolitical tensions in the Middle East, also weighed on investor sentiment.

As Yemen's pro-Iran Houthi rebels intensified attacks against Saudi Arabia, Brent crude prices surpassed $113 per barrel.

This is the highest level since May.

(Photo: Getty Images)