The Nasdaq Composite had its steepest one-day percentage drop since 5 June as tech stocks sold off on Friday. Disappointing results from Intel and Amazon amplified worries about AI spending, even as 82% of reporting S&P 500 companies beat consensus expectations.
The Nasdaq Composite lost 2.84% to 25,440.68 on Friday, its largest one-day percentage drop since 5 June. Tech stocks fell on growing worries about AI-related companies' spending on the technology.
All three major US indexes slumped, but the tech-heavy Nasdaq suffered the steepest loss. The S&P 500 lost 1.80% to 7,580.21 and the Dow Jones Industrial Average fell 1.09% to 51,770.58, according to preliminary data.
The Nasdaq and the S&P 500 both logged monthly losses, while the Dow exited October with a gain. Meanwhile, the Nasdaq-100 finished in correction territory, typically defined as a drop of 10% or more from a recent high.
Intel and Amazon results spark the rout
The selloff was sparked by disappointing quarterly results from Intel and Amazon released late on Thursday. Chip stocks then veered sharply lower, dragging the Philadelphia SE Semiconductor Index to a monthly loss.
Intel shed 29% of its value in its worst single-day performance since at least 1980. Alphabet, for its part, missed quarterly revenue expectations for the first time since 2024, and Amazon also came up short.
Investors question the pace of AI spending
Fears are intensifying around a possible slowdown in the AI build-out. Ken Mahoney, CEO of Mahoney Asset Management, said: "If you miss like Intel did, forget it."
Strategist Charlie McElligott of Nomura pointed out that earnings reports from a number of tech firms exposed incipient weakness in their core businesses. That has prompted investors to question whether companies can keep up the pace of spending on chips and data centers.
Yet with 299 companies in the S&P 500 having reported, 82% have beaten consensus expectations, according to LSEG data.
Sources: The Guardian, MarketWatch
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