Meta's Cash Gap Reached Bonds | Power Stocks Fell | The 10-Year Fell Below 5%

The Nasdaq Fell 2.6%. The Dow Ended About Flat.

The Nasdaq Composite fell about 2.6% on Thursday, and the S&P 500 fell about 1.2%. The Dow ended near unchanged, and the Russell 2000 edged higher. The losses were concentrated in AI stocks, while health care and consumer staples rose.

Oil kept climbing. Brent rose almost 4% to about $113 a barrel, its highest since May. Saudi Aramco told staff to leave its Dhahran headquarters and work remotely, six people told Reuters. Houthi forces claimed strikes on Aramco sites in Yanbu that Riyadh has not confirmed.

Energy stocks fell anyway. Valero Energy (VLO) beat estimates by about 13% and still slipped about 2%, along with other refiners.

Investor Signal

Large oil producers ended about flat as Brent rose almost 4%, a sign investors do not yet see a lasting loss of supply. No production outage has been confirmed. Weekly export data will show whether physical flows have changed.

Meta's Default Swaps Hit a Record. Power Stocks Fell Harder Than Chips.

Meta Platforms (META) fell about 7% to near $649, far more than the 1.6% drop indicated before dawn. The cost of insuring its debt hit a record, and its bonds fell. Capital spending outran operating cash in the quarter, leaving free cash flow at negative $2.12 billion.

The selling spread across the AI supply chain. Lam Research (LRCX) fell nearly 12%, KLA (KLAC) about 9.5% and Applied Materials (AMAT) about 8%. AMD (AMD) lost about 8%, and Nvidia (NVDA) about 4%. The iShares Semiconductor ETF fell about 7%.

Some of the worst losses came in power. GE Vernova (GEV) fell about 11%, Vistra (VST) about 10% and Bloom Energy (BE) about 9%. CoreWeave (CRWV) dropped about 10% after setting a new 52-week low.

Investor Signal

Turbine makers, power producers and chip-tool makers run very different businesses, but all have been bought as data-center winners. Falling together suggests investors trimmed a theme rather than repricing each company. A record in Meta's swaps says more about the bonds it may need to sell than about its ability to pay. Microsoft (MSFT) and Alphabet (GOOGL) report on Oct. 28 and Amazon (AMZN) on Oct. 29, and their spending plans will test the theme.

P&G and Lockheed Rose 6% to 7% on Results They Can Already Show

Procter & Gamble (PG) rose about 6%, close to its 52-week high. Volume grew 2.4%, so shoppers bought more product. Core earnings of $2.00 a share beat forecasts. P&G held its profit outlook even as it raised its estimate of the profit hit from commodity, energy and freight costs to $1.4 billion from about $1 billion.

Lockheed Martin (LMT) gained about 7%. It raised its 2026 free cash flow forecast to $7.8 billion to $8.0 billion, up $800 million at the midpoint. It also announced a framework for 850 more F-35s for the U.S. over 10 years.

Investor Signal

These gains rewarded results investors can see now, the reverse of the spend-first model that hit AI stocks. Lockheed's raise reflects cash already collected, since the new range implies only $2.2 billion to $2.4 billion in the fourth quarter. The F-35 framework is not a contract, and later production lots are still under negotiation. P&G has less cushion than its stock move suggests. Core operating margin fell 0.8 percentage point last quarter, and oil is now above $110.

Yields Fell Below 5% Despite Low Jobless Claims. Hike Bets Were Cut in Half.

The 10-year Treasury yield fell to about 4.95%, down nearly 0.2 percentage point and below 5% for the first time since Sept. 23. The two-year yield fell more than 0.15 point, a sign traders also trimmed their outlook for Fed tightening.

The labor data pointed the other way. Initial jobless claims fell to 194,000 in the week ended Oct. 17, below the 200,000 economists expected.

On Kalshi, the contract on a quarter-point hike at next week's meeting fell to 6 cents from 12 cents, about a 6% chance. About 95% of the contracts traded through the morning and early afternoon were bought by traders betting against a hike.

Investor Signal

Lower long-term yields reduce the base rate on new borrowing, including for Meta if it sells bonds. The rally has not yet been tested by new supply. The Treasury sells two-year notes on Oct. 26, five-year notes on Oct. 27 and seven-year notes on Oct. 29, around the Fed's Oct. 27 to 28 meeting. Prediction markets still give better-than-even odds of a hike by December, so the hawkish path is still priced.

Blackstone Raised $63.3 Billion. Its Credit Fund for Individuals Paid About Half of Withdrawal Requests.

Blackstone (BX) took in $63.3 billion in the third quarter, well above forecasts, and its assets rose 10% to $1.37 trillion. Its shares rose about 8%.

The strain sits in its funds for individuals. Investors in BCRED, its private credit fund for that market, asked to withdraw 10% of net asset value, twice the 5% quarterly limit. Blackstone paid about half.

An industry report put private credit assets at $4.1 trillion at the end of 2025, up 17%. It said most of that money sits in funds that do not offer withdrawals.

Investor Signal

Money is still coming in, but cash is coming back to investors more slowly. Realized performance revenue fell 38%. Blackstone said fourth-quarter carried interest already under contract will exceed its third-quarter net realizations, which points to exits picking up. Its president, Jon Gray, also said CoreWeave would "find a way through" its financing pressure. BCRED's next round of withdrawal requests will show whether individual investors keep waiting.

Bitcoin Sat at Its Fund Buyers' Break-Even. AI-Hosting Miners Fell Hardest.

Bitcoin traded near $81,300, down nearly 4% from Wednesday's U.S. close, with most of that drop coming overnight. Crypto stocks caught up once the market opened.

Miners that also host AI computing fell hardest. IREN (IREN) dropped about 8% after touching a 52-week low, and MARA Holdings (MARA) fell about 7%. Coinbase (COIN) lost about 4.5%.

Investor Signal

For these miners, the AI trade mattered as much as the coin. Bitcoin also missed the haven bid that went to Treasuries. Buyers of U.S. spot bitcoin funds paid an estimated average of about $81,500, so the coin sits right at their break-even. Thursday's fund flows, published after the close, will show whether those buyers hold. Coinbase reports on Oct. 29.

Meta is spending faster than its business brings in cash, and Thursday's market sold the AI trade. Meta's swaps, the power stocks and the AI-hosting miners all fell together, a sign investors were trimming the theme.

The money moved to cash that already exists. Consumer staples, a defense contractor with cash in hand and Treasuries all drew buyers. Next week's tech results and bond sales will show whether that shift lasts.