The Nasdaq fell more than 2% as Meta and Tesla failed to ease AI spending concerns. The sell-off highlighted investor anxiety over costly infrastructure and uncertain returns.The Nasdaq fell more than 2% as Meta and Tesla failed to ease AI spending concerns.The tech-heavy Nasdaq slid more than 2% on Thursday as growth stocks weakened after earnings from mega-caps Tesla and Meta did little to address AI-related concerns, with a recovery in oil prices further adding to market unease.Meta META.O slipped 5.2% after the social media giant unveiled a new class of non-voting shares to help fund its costly AI expansion.

The decline came despite stronger-than-expected quarterly revenue and an upbeat fourth-quarter sales forecast.The market weakness marked a sharp reversal from Wednesday, when robust results from SpaceX SPCX.O and Super Micro SMCI.O sparked an AI-fueled rally. The optimism faded as investors shifted their focus from earnings strength to the enormous capital required to build AI infrastructure and their uncertain return timeline.The selloff put the Philadelphia SE Semiconductor Index .SOX on track to shed more than $616 billion in market value, while the Nasdaq-100 .NDX was set to erase nearly $1 trillion.

The semiconductor index fell 5.6% to its lowest since July 29. "Semiconductors and the Nasdaq have been elevated to a huge degree by investors' rush to participate in the AI build-out. Investors are now reassessing the pace of AI spending and the returns that spending can generate," said Steve Sosnick, chief market analyst at Interactive Brokers.Tesla TSLA.O fell 0.7% after the electric-vehicle maker cut annual capital expenditure forecast, raising questions about the pace of its AI and robotics ambitions.

Other constituents of the 'Magnificent 7' group also declined, with Amazon.com AMZN.O and Nvidia NVDA.O down more than 3% each.At 11:58 a.m. ET, the Dow Jones Industrial Average .DJI fell 29.18 points, or 0.06%, to 52,826.91.

The S&P 500 .SPX lost 85.27 points, or 1.10%, to 7,671.90, while the Nasdaq Composite .IXIC slipped 551.50 points, or 2.06%, to 26,152.90.Six of the 11 S&P 500 sectors posted losses, led by technology .SPLRCT, down more than 2.7%.Consumer staples .SPLRCS were leading the gains with a 2.5% rise. Procter & Gamble PG.N jumped 6.1% to a near eight-month high after the consumer goods giant beat first-quarter estimates.The S&P 500 value index .IVX was flat compared to a 2.2% drop in its growth counterpart .IGX.Brent crude was hovering near its five-month high, after more Houthi attacks in Saudi Arabia stoked fears of supply disruptions and a wider Middle East conflict.

O/RA flight to safety pushed the 10-year yield US10YT=RR down to around 5.0025%.Meanwhile, weekly jobless claims unexpectedly fell, pointing to a resilient labor market and supporting expectations that the Federal Reserve will keep interest rates unchanged at its meeting next week.On the earnings front, S&P 500 third-quarter profit growth is forecast at 32.3%, up from 30.7% previously, according to LSEG data.Blackstone BX.N gained nearly 6% after the alternative asset manager beat third-quarter profit expectations, while Chief Operating Officer Jon Gray said widening credit spreads on AI-linked debt could create opportunities to secure higher returns.Lockheed Martin LMT.N climbed 5.9% after the defense contractor raised annual sales and profit forecast.Spotify SPOT.N rose 9% after the Swedish music streaming firm forecast fourth-quarter profit above Wall Street estimates, betting on its AI-powered features to drive user growth.Declining issues outnumbered advancers by a 1.06-to-1 ratio on the NYSE and by 1.23-to-1 on the Nasdaq.The S&P 500 posted 35 new 52-week highs and three new lows, while the Nasdaq Composite recorded 70 new highs and 247 new lows.- Ends