# Dow Falls 653 Points as Doubts About Artificial-Intelligence Spending Spread Beyond Tech Stocks

American Express said it will cut 5% of its workforce to "prepare for AI," and a fund manager said Anthropic may decide to stay private rather than file in time for a November listing.

- Published: 2026-10-24T05:16:48.483Z
- Canonical: https://polylog.news/2026-10-24/dow-falls-653-points-as-doubts-about-artificial-intelligence
- Publisher: Polylog (Global desk)
- Section: markets
- Sources: [CNBC](https://www.cnbc.com/2026/10/23/american-express-job-cuts.html), [Globes (Hebrew)](https://www.globes.co.il/news/article.aspx?did=1001560609#utm_source=RSS), [MarketWatch](https://www.marketwatch.com/story/will-anthropic-pull-off-a-november-ipo-time-is-running-out-to-file-key-paperwork-52677343?mod=mw_rss_topstories)

The Dow Jones Industrial Average fell 652.82 points, or 1.23%, to 52,215.16 on Friday. The S&P 500 lost 0.52% to 7,623.68, and the Nasdaq Composite slipped 0.21% to 25,955.34, [according to TradingKey's market close](https://www.tradingkey.com/analysis/stocks/us-stocks/262236830-us-market-close-dow-drop-consumer-healthcare-chips-rebound-crowdstrike-tradingkey). Thursday's tech sell-off moved into the rest of the market, and US crude rose above $100. On Thursday the Nasdaq [fell 2.6%](https://www.thestreet.com/stock-market-today/stock-market-today-dow-jones-sp-500-nasdaq-updates-oct-23-2026) on fears that the artificial-intelligence (AI) investment boom has peaked.

The selling hit defensive sectors on Friday. Consumer staples, utilities and healthcare all fell, while some chipmakers recovered. Micron gained nearly 3% and AMD almost 2%. [Globes](https://www.globes.co.il/news/article.aspx?did=1001560609#utm_source=RSS) reported that European markets also closed lower. The 10-year Treasury yield fell below 5% on Thursday for the first time in a month as investors grew wary of the heavy borrowing that funds AI data centers, [CNBC reported](https://www.cnbc.com/2026/10/23/bonds-yields-us-treasurys.html). It ended Friday near 4.97%.

American Express is cutting 5% of its workforce and taking a $336 million restructuring charge in the third quarter, Chief Executive Stephen Squeri said, [according to CNBC](https://www.cnbc.com/2026/10/23/american-express-job-cuts.html). The company framed the cuts as preparation for AI. Investors may be cooling on the companies that build AI models. [MarketWatch reported](https://www.marketwatch.com/story/will-anthropic-pull-off-a-november-ipo-time-is-running-out-to-file-key-paperwork-52677343?mod=mw_rss_topstories) that Anthropic is running short of time to file the paperwork for a November initial public offering. One portfolio manager said the company "could reasonably decide it is better to stay private" if market pressure keeps building.

Central bankers have started to price the same risk. The Bank of Japan's [Financial System Report](https://www.boj.or.jp/research/brp/fsr/fsr261023.htm), published Thursday, ran a stress test in which expected returns on AI investment shrink. It also noted that private funds now play a larger role as lenders to the global AI build-out.

## What this means

The pressure on these stocks comes through financing. Much of the AI build-out is paid for with corporate bonds and private credit, on the assumption that future cash flows will cover the cost. When investors doubt those returns, borrowing costs rise for data-center developers, the largest cloud companies and the private funds that lend to them, and Treasuries gain as a haven. From a business-cycle view, this is the stage where a credit-funded investment wave has to show revenue. Companies that cut staff to fund AI, as American Express did, show the margin pressure behind that spending. The consensus calls this week's decline a rotation within equities. The Bank of Japan's stress test suggests that regulators see a credit question instead. The 2000 telecom spending cycle is the clearest precedent: equity weakness came first, and debt markets for the builders closed months later. The likelier outcome over the coming weeks is a narrower listing window for AI issuers, with Anthropic deferring its offering as the first test. This read would be wrong if Anthropic files on schedule and prices strongly.

## What to watch

- Whether Anthropic files its registration in time for November. A delay would show that private valuations no longer clear in public markets.
- Credit spreads on bonds that fund data centers. Wider spreads would show the AI doubts moving from equities into debt financing.
- More large employers tying layoffs to AI. A run of such announcements would show companies paying for AI spending through labor costs.