US stocks fall as Iran tensions lift oil and AI spending worries weigh on tech

US stocks fell on Thursday, October 22, as oil prices rose and investors weighed concerns about artificial intelligence spending and possible renewed US-Israeli attacks on Iran, according to NBC News. The New York Times reported the prospective strike plans, as credited by NBC. By midmorning in the United States, the S&P 500 was down 1.4% and the Nasdaq was down 2.2%, NBC reported.

NBC put Brent crude up more than 2% and US crude up more than 1%. It also reported stronger demand for Treasury bonds, which pushed yields lower as investors sought safety. The stock and oil figures reflected trading during the day.

Iran tensions and oil supply fears

On Wednesday, October 21, Iran's Islamic Revolutionary Guard Corps announced what it called an offensive and asymmetrical defence doctrine. Spokesman Hossein Mohebi said Iran would respond to an attack and launch an offensive. Negar Mortazavi, a senior fellow at the Centre for International Policy, told Al Jazeera that Tehran wanted to make future US-Israeli attacks more costly after earlier retaliation failed to prevent repeated strikes.

Reuters reported that Brent crude reached its highest level since May after further Houthi attacks in Saudi Arabia raised fears of disruption to regional oil supplies. It said the yen strengthened 0.51% to 157.33 per dollar as investors sought safety amid fragile equity markets, elevated oil prices and doubts about returns from AI investment.

AI financing and French debt concerns

The Nasdaq's decline gained momentum after Nvidia chief executive Jensen Huang said on CNBC that financing for the AI investment boom was becoming scarce amid higher interest rates and existing spending commitments, NBC reported. Deutsche Bank macro strategist Henry Allen described a difficult 24 hours for markets marked by AI growth concerns, higher oil prices and fiscal stress. NBC said US markets remained near all-time highs despite recent volatility.

Reuters also reported that worries about France's fiscal outlook weighed on markets and the euro. The gap between French and German 10-year government bond yields reached 177.7 basis points on Thursday, its widest since 2011, as investors assessed France's ability to manage its debt burden.