Key Highlights

● Eaton traded around $369 on October 22 as AI power stocks sold off.

● Eaton makes switchgear, transformers and power distribution systems for data centers.

● Meta reported record revenue but negative free cash flow of $2.12 billion.

● Heavy trading volume reached 18.79 billion shares across US exchanges.

Eaton (NYSE:ETN) slid sharply on Thursday, October 22, 2026, as the selloff in AI power stocks dragged the electrical-equipment maker lower on the S&P 500. The stock traded around $369, with no company-specific news to explain the move.

Eaton makes switchgear, transformers, power distribution and backup systems used in data centers, factories, utilities and commercial buildings. In recent years, demand from AI data centers has become a big part of its growth story. On Thursday, that link worked in reverse.

Meta's spending sparked a rethink

The trouble began on Wednesday evening, when Meta Platforms (NASDAQ:META) reported results. Revenue rose to a record $64.60 billion, but the spending numbers drew the attention. Meta narrowed its 2026 capital spending range to $135 billion to $145 billion. Free cash flow came in at negative $2.12 billion, Meta's first cash outflow in more than a decade, according to market data.

The quarter also included a legal charge of about $10 billion tied to a settlement, according to reports. Meta announced a one-time dividend of one non-voting Class C share per Class A and Class B share, contingent on a charter amendment effective January 19, 2027, according to its SEC filing.

Investors worried that heavy spending by the largest AI buyers may become harder to fund. Market commentary linked Meta's spending outlook to AI financing worries that hit GE Vernova (NYSE:GEV), Vertiv (NYSE:VRT) and Eaton.

Nvidia and Lam piled on

Nvidia (NASDAQ:NVDA)'s chief executive said, "The demand of the capital is much greater than the availability of the capital." Wells Fargo traders said his comments spooked markets.

Lam Research (NASDAQ:LRCX) guided December-quarter revenue to $8.6 billion, plus or minus $400 million, with a midpoint slightly below consensus, and cited supply constraints. Lam's chief financial officer said "things are going to continue to be constrained."

The result was a broad retreat from anything tied to the AI build-out. GE Vernova plunged and ranked among the weakest S&P 500 stocks. Vertiv slid hard. Quanta Services (NYSE:PWR) sank, while MasTec (NYSE:MTZ), Dycom (NYSE:DY) and Primoris (NYSE:PRIM) hit 52-week lows. Caterpillar (NYSE:CAT) was among the weakest performers in the Dow.

Defensives won the day

The S&P 500 fell 93.74 points to 7,663.43, its worst day since July. The Nasdaq Composite lost 694.00 points to 26,008.86, its steepest drop since June 5, ending a seven-session winning streak. The Dow Jones Industrial Average edged up 11.89 points to 52,867.98.

Away from AI, buyers were active. About two of every three S&P 500 stocks rose, according to market reports. Consumer staples had their best day since April 2025 and hit a record. Health care also set a record. Homebuilders and railroads rallied as the 10-year Treasury yield fell back below a closely watched threshold for the first time since September 22.

Trading was heavy, with 18.79 billion shares changing hands on US exchanges, compared with a 17.19 billion average over the prior 20 sessions, according to market data.

Eaton Looks to the Hyperscaler Calendar

The next big signals for Eaton will come from the hyperscalers. Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) report on October 28 and Amazon (NASDAQ:AMZN) on October 29. Any sign that they are trimming or slowing data-center plans would matter for suppliers of electrical equipment.

The Federal Reserve announces its decision on October 28, with third-quarter GDP and September PCE inflation data due on October 29. Friday brings S&P Global's PMI surveys and the final University of Michigan sentiment reading.

In evening trading, S&P 500 futures were roughly flat at 7,707.0, according to market data, pointing to neither an immediate rebound nor a further slide.