AI stocks drag markets down worldwide as oil prices climb to their highest since May

NEW YORK (AP) — Drops for stocks in the artificial-intelligence industry are dragging down markets worldwide on Thursday, while oil prices hit their highest levels since May because of worries about the war with Iran.

The S&P 500 sank 0.8% following even sharper losses in Asia, whose markets are full of AI and other technology stocks. The Nasdaq composite was down 1.5%, as of 10 a.m. Eastern time, but stocks outside of tech did better, and the Dow Jones Industrial Average was down a modest 0.1%, or 60 points.

AI-related stocks have been shaky on worries that their boom may be under threat because of how expensive it’s become to borrow money to build data centers and buy more AI chips. Concerns also remain that prices simply shot too high for AI-related stocks in their yearslong frenzy, even though companies in the industry continue to report growth.

Lam Research, whose equipment and services help make semiconductors, reported gains in profit and revenue for the summer that were slightly stronger than analysts expected, for example. Usually, that helps boost a stock’s price, but Lam Research’s tumbled 7.7%.

It gave a forecasted range for profit in the final three months of 2026 whose midpoint was slightly below analysts’ expectations. Its stock also came into the day with a 52.4% surge for the year so far, nearly quadruple the already healthy gain for the overall S&P 500, leaving room for potential disappointment.

Other big tech stocks were unsettled following their own profit reports that included at least some encouraging nuggets.

Meta Platforms, which is pushing its Muse AI agent, lost 5.8% after reporting stronger revenue for the latest quarter than analysts expected, though its profit fell short.

Tesla erased an early drop to rise 0.3% after reporting a stronger profit for the summer than analysts expected, though its revenue was weaker than forecast.

The global tide against AI stocks knocked Nvidia down 2.3%. Because it’s the largest stock on Wall Street by total value, the chip giant was the heaviest single weight on the S&P 500.

CoreWeave, which has borrowed money to buy Nvidia’s AI chips that it rents out to customers over the cloud, has been particularly shaky in recent weeks because of worries about its debt. It dropped 3.8%, though it’s swung between gains and losses of roughly 4% in each of the last two days.

The weakness for AI and other tech stocks began in Asia, where South Korea’s Kospi tumbled 3.5%, Hong Kong’s Hang Seng dropped 3% and Japan’s Nikkei 225 sank 2.7%.

Also weighing on global stock markets was a jump in oil prices.

The price for a barrel of Brent crude oil rose 2.6% to $111.66 after touching its highest level in five months. It’s at the high end of the $97 to $112 range it’s been yo-yoing through in October on uncertainty about when the war with Iran will allow the global energy industry to return to normal.

In Europe, France’s CAC 40 stock index fell to one of the continent’s sharpest losses with a drop of 1% It has fewer tech stocks than Asian or U.S. indexes, but it was hurt by another jump in yields for French government bonds.

Yields have been generally climbing there because of worries about the government’s big debt load and strained budget. Violent protests across France have raised pressure on the government to increase spending, which could add further to its debt.

Worries about big debt affect almost every developed economy in the world, including the United States. Such concerns have pushed yields in the U.S. bond market to their highest levels in decades, along with high inflation, signals of a still-strong U.S. economy and other factors.

But U.S. yields nevertheless fell Thursday in a signal that investors were buying U.S. government bonds in search of something safer to own as AI stocks tumble.

The yield on the 10-year Treasury fell to 5.03% from 5.13% late Wednesday and from more than 5.30% earlier this month. That’s a notable move for the bond market, though the 10-year yield remains well above its 3.97% level from before the war with Iran.

Thursday’s drop in yields came even as another report suggested the U.S. economy may be doing better than economists expected. It said fewer U.S. workers applied for unemployment benefits last week, which could be a signal that layoffs remain low across the country.

That solid economy has helped U.S. companies broadly to make bigger profits, which is what allowed the U.S. stock market to hit its record high earlier this month despite the many worries tugging at it. Nearly two out of every three stocks in the S&P 500 rose on Thursday, though they got drowned out by the drops for the more influential tech stocks.

Procter & Gamble, Lockheed Martin and CSX were among the latest companies to join the list of those topping profit expectations for the summer, and gains for their stocks helped limit the market’s losses on Thursday.

CEO Shailesh Jejurikar said Procter & Gamble expects “geopolitical and economic challenges” to continue, but it stood by its forecasts for growth in revenue, profit and other measures for the full year. The stock price for the company behind the Crest, Olay and Oral-B brands rose 5.4%.

AP Business Writer Elaine Kurtenbach contributed to this report.

FILE - Options trader Anthony Spina works on the floor of the New York Stock Exchange, Wednesday, Jan. 7, 2026. (AP Photo/Richard Drew, File)

People walk in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Oct. 22, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Oct. 22, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Oct. 22, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Oct. 22, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Thursday, Oct. 22, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

RICHMOND, Va. (AP) — Virginia state Sen. L. Louise Lucas, one of the state’s most powerful Democrats, was charged on Thursday in connection with what federal authorities alleged was a role leading a criminal enterprise that acquired and distributed large quantities of marijuana and laundered the proceeds.

An indictment unsealed on Thursday charged Lucas and six other defendants, including several of her relatives, the Department of Justice said in a statement ahead of a news conference scheduled for 10 a.m.

Lucas self surrendered, according to a Justice Department spokesperson

The charges came after the FBI searched Lucas' hometown office and a cannabis shop in which she has a stake in May.

At the time of the search, Lucas — who has been a vocal critic of Republican President Donald Trump's administration — characterized it as an attempt to intimidate her. The Associated Press was making efforts to contact Lucas’ attorneys for comment on the charges.

The brash 82-year-old lawmaker has spent decades ascending the ranks of Virginia politics and has served since 1992 in the state Senate, where she is the president pro tempore, overseeing the chamber in the lieutenant governor’s absence. More significantly, she leads the powerful Senate finance committee, through which all legislation with any budget impact must flow. She’s used the position to stop and ultimately kill legislation she opposes.

FBI Director Kash Patel said in a statement that the charges allege “Lucas and a close-knit group of family members and associates orchestrated a multi-year scheme to enrich their own criminal marijuana enterprise, ‘the Lucas Enterprise’ — using Lucas’ position as Chairwoman of the Senate Finance and Appropriations Committee to insulate the enterprise from criminal scrutiny and influencing legislation to financially benefit themselves.”

“No one is above the law," the statement said, "and this FBI will continue to follow the facts with our Justice Department and ensure those responsible for criminal conduct are held accountable.”

Lucas has been a leading voice in Democrats’ ultimately failed attempt to redistrict the state’s congressional map this year, a bid to hedge against Republican efforts in other states to redraw maps for their advantage in midterm elections.

A forceful advocate of legalizing marijuana, Lucas partnered in opening the shop, The Cannabis Outlet, in 2021, selling hemp and CBD products. While marijuana is legal to possess in Virginia, recreational retail sales of the drug are not yet underway, though shops across the state do sell other cannabis-derived products.

Lucas also runs a network of companies that provide residential, transportation and other services to adults with intellectual disabilities.

Court records related to the case for months have been sealed, though earlier this year the Department of Justice sent at least two rounds of letters notifying journalists, politicians and others in Lucas’ orbit that their communications with Lucas had been intercepted as part of a court-approved wiretap that ran for two one-month time spans.

At the time of the search, many Democrats spoke up to defend Lucas, expressing skepticism about the basis for the search, given the Department of Justice’s efforts to establish criminal conduct by perceived Trump opponents.

Lucas has publicly spoken about her ownership stake in the cannabis shop as recently as June, though her most recent financial disclosure forms do not list the business by name.

Lucas, who represents a state Senate district that includes her hometown of coastal Portsmouth, operates with a sometimes-profane, unapologetic style that’s drawn comparisons with Trump.

She amassed a six-figure following on X and national attention, using the social media platform to advocate forcefully for her priorities and to bash her critics, including former GOP Gov. Glenn Youngkin. She’s also occasionally blasted members of her own party, including Gov. Abigail Spanberger, with whom she’s had disagreements.

Earlier this year, Lucas helped lead Democrats’ ultimately unsuccessful plan to gerrymander the blue-leaning state’s congressional districts into a map intended to elect 10 Democrats and only one Republican. Along the way, she posted quips about four GOP members the intended map sought to oust, joking that they soon would be working at McDonald’s. She and other Democrats defended the maps as a reasonable response to Trump-backed efforts to boost the GOP’s midterm advantage in other states.

Lucas has notched several historic firsts in her career. According to a biography from the state library, in 1971 she became the Norfolk Naval Shipyard’s first female shipfitter, a physically demanding job that involves working on metal assemblies for vessels.

She launched her political career in 1984, when, the biography said, she became the first Black woman elected to the Portsmouth city council.

In her decades in the state Senate, Lucas has been a staunch advocate for abortion rights and increased public school funding and a leading voice on issues of racial justice and civil rights.

In 2019, after Democrats flipped control of the chamber, her peers elected her to serve as president pro tempore. And in 2024, she was tapped to lead the chamber’s budget committee, gaining enormous sway over any legislation tied to the state budget. In that post, she played a leading role in killing Youngkin’s proposal to bring Washington’s NBA and NHL teams to a proposed $2 billion development in Virginia.

Richer reported from Washington. Associated Press reporter Eric Tucker contributed from Washington.

FILE - Virginia Senate President pro tempore Louise Lucas, D-Portsmouth, listens to debate on the Senate floor, Feb. 17, 2026, in Richmond, Va. (AP Photo/Ryan M. Kelly, File)