Meta's $9.89B charge and oil surge weigh on US equity indexes

US equity indexes finished mixed on Thursday after Meta Platforms' quarterly results triggered a sell-off in technology stocks while crude oil prices surged. The Nasdaq Composite fell 2.2% to 26,099.2, and the S&P 500 dropped 1.3% to 7,654.3. The Dow Jones Industrial Average was little changed at 52,848.7, reversing earlier losses in the session.

Meta Platforms (META) reported a $9.89 billion litigation settlement charge related to teen mental health and social media. The company raised its expected capital expenditures to a range of $135 billion to $145 billion, up from previous guidance of $130 billion. Meta's board also approved a new class of publicly listed, non-voting common stock scheduled for introduction in January 2027. The share price slumped 5.2%, placing it among the worst performers on both the S&P 500 and the Nasdaq.

DA Davidson research noted that high-growth technology stocks faced renewed pressure because earnings from Tesla and Meta Platforms did not fully ease concerns about the scale of AI-related spending. The firm added that a rebound in oil prices further weighed on investor sentiment. Tesla (TSLA) shares also slipped after the company reported lower third-quarter adjusted earnings and revenue.

Data compiled by Finviz showed that fifteen of the twenty worst-performing stocks in a category with a market capitalization exceeding $200 billion were from the technology sector. The iShares PHLX Semiconductor Exchange Traded Fund (SOXX), which manages about $48.43 billion in assets, slumped 5.2%, reflecting a pullback from the AI trade.

Geopolitical tensions contributed to the energy rally. Al Jazeera reported that Iran's Islamic Revolutionary Guard Corps said renewed attacks by the US could prompt Tehran to invade neighboring countries and hit bases used in US military operations as part of a new offensive strategy. In response, the front-month West Texas Intermediate crude oil contract jumped 1.8% to $98.90 per barrel, while global benchmark Brent advanced 2.6% to $111.68 per barrel.