Stock Market News From Oct. 16, 2026: An AI Selloff Shatters the Nasdaq’s Weekly Winning Streak
Ballooning artificial intelligence fears sent the Nasdaq tumbling to its worst week since June.
The tech-heavy index fell 2.2%. The S&P 500 dropped 1.1%. The Dow dropped 176 points, or 0.3%. The Nasdaq also snapped a four-week winning streak.
CoreWeave sank again amid broader investor concerns about AI spending. The iShares Semiconductor ETF fell for a ninth day in a row, its longest losing streak in two decades.
“The market is burnt out on AI,” says Nicholas Colas, co-founder of DataTrek Research. “And the upshot of it is, equity investors are not used to being venture investors. Investors are saying, ‘It’s enough already. You all want to go off and build this science project? That’s awesome but we don’t have to be along for the ride, and we certainly don’t have to be overweight for the ride.’”
Friday’s selloff also spread to software stocks as investors sold popular positions in Big Tech amid the AI carnage. Meta Platforms and Tesla will kick off Magnificent Seven earnings just as AI spending comes under heightened scrutiny.
The CBOE Volatility Index surged north of 20, a level that is viewed as a threshold that begins to signal heightened volatility in the market. Despite the carnage in tech, breadth wasn’t terrible, with energy, utilities, and consumer staples attracting some buying.
Bond yields were higher on Friday, but ended the week lower. The 2-year Treasury yield is at 4.734%, while the 10-year yield is at 5.097%. The 30-year yield marked its biggest one-week decline to end up at 5.436%.