The US stock market witnessed a sharp sell-off on Friday (October 30), with technology stocks bearing the brunt of heavy selling as investors reassessed the artificial intelligence (AI) trade following disappointing earnings and concerns over mounting capital expenditure.
The Nasdaq Composite plunged 2.86 per cent, losing 747.72 points to close at 25,436.99. It marked the index’s worst single-day performance since June and left it around 8 per cent below its recent record high. The S&P 500 declined 1.8 per cent, while the Dow Jones Industrial Average dropped 572 points, or 1.1 per cent.
Selling pressure intensified during afternoon trading as investors booked profits ahead of the month-end and next week’s closely watched US midterm elections.
Tech Stocks Lead Wall Street Sell-Off
Several major technology companies recorded significant losses,
Several major technology companies recorded significant losses, with Intel emerging as one of the biggest casualties.
Intel shares plunged 29 per cent after the chipmaker issued a weaker-than-expected outlook for the current quarter, citing a slowdown in the personal computer market. Revenue from its client computing and physical artificial intelligence group fell 5 per cent year-on-year to $8.1 billion.
Amazon shares also declined more than 1 per cent after the company reported third-quarter earnings and revenue below Wall Street expectations. The e-commerce giant additionally reported negative free cash flow of $42.4 billion and retained its 2026 capital expenditure forecast of $220 billion.
Other major technology and semiconductor stocks also suffered
Other major technology and semiconductor stocks also suffered. Advanced Micro Devices fell 11 per cent, while Nvidia and Broadcom declined 4 per cent and 5 per cent, respectively. Sandisk shares dropped 13 per cent despite reporting better-than-expected quarterly results.
The sell-off extended to companies involved in AI infrastructure, with investors increasingly questioning the sustainability of massive investments in data centres and computing capacity.
AI Investment Concerns Weigh On Investor Sentiment
Investor anxiety surrounding the AI sector intensified following concerns about the debt outlook of AI company Anthropic.
The Financial Times reported, citing that Anthropic might
The Financial Times reported, citing that Anthropic might not secure an investment-grade credit rating following its planned initial public offering (IPO). Its debt could instead receive a high junk rating, according to the report
Meanwhile, concerns about the financing requirements of AI infrastructure companies continued to weigh on the sector. CoreWeave shares have fallen more than 37 per cent in October, while Nebius was heading towards a monthly decline of approximately 33 per cent.
The Roundhill Memory ETF, which includes AI-related memory companies Micron and Seagate Technology, declined around 20 per cent during October. The iShares AI Innovation and Tech Active ETF also dropped approximately 17 per cent.
Investors Rotate Into Defensive Stocks
As technology shares tumbled, investors shifted towards traditionally
As technology shares tumbled, investors shifted towards traditionally defensive sectors, including healthcare and consumer staples.
Walmart and Coca-Cola gained more than 1 per cent each, helping limit the Dow’s losses. Merck and Amgen also advanced.
The Consumer Staples Select Sector ETF rose nearly 2 per cent, reaching an intraday record, while the Health Care Select Sector ETF gained around 1.5 per cent.
Globalt senior portfolio manager Keith Buchanan said investors
Globalt senior portfolio manager Keith Buchanan said investors were becoming increasingly selective about companies’ business models, financing requirements and ability to generate returns from AI investments.
He noted that market participants were now looking beyond the optimism surrounding artificial intelligence and demanding clearer answers about how companies would finance their expansion and benefit economically from it.
Wall Street Heads Towards Worst Monthly Performance Since March 2025
Friday’s losses added to an increasingly difficult month for US technology stocks.
The Nasdaq was heading towards a monthly decline of approximately 5 per cent, its steepest since March 2025. The S&P 500 was on course to finish October slightly lower, while the Dow was positioned to register a gain of around 2 per cent.
The broader market turmoil also coincided with weakness
The broader market turmoil also coincided with weakness across global equities. Japan’s Nikkei 225 declined 2.12 per cent, while South Korea’s Kospi plunged 3.48 per cent. Mainland China’s CSI 300 fell 1.39 per cent.
The developments highlighted growing investor concerns over technology valuations, AI-related spending and the ability of major companies to translate their investments into sustainable profits.
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