US Stock Markets Slide Sharply as Disappointing Earnings Spark Fears Over Tech and AI Spending

US stock markets dropped on Friday after weak quarterly financial results from Amazon and Intel triggered a major technology selloff. The Dow Jones Industrial Average fell 566.81 points, or 1.08 percent, to close at 51,778.86. The S&P 500 lost 160.54 points, or 2.08 percent, down to 7,559.85. The tech-heavy Nasdaq Composite suffered the steepest drop, plunging 881.35 points, or 3.37 percent, to finish at 25,303.37, marking its biggest single-day percentage decline since June 5 and hitting a three-month low.

Market Impact

Technology shares led the losses across the board. Chipmakers saw sharp declines, with Intel sliding after reporting significant cash burn, Nvidia down 5.3 percent, and AMD dropping 12.1 percent. The broader chip index fell 8.7 percent, while server makers Dell and HP lost 12.5 percent and 10.8 percent, respectively. Amazon shares slumped 30.9 percent following its earnings report. The steep selloff threatened to wipe out nearly $200 billion in combined market value for Amazon and Intel, while setting up the Nasdaq-100 to erase over $1 trillion in a single day. Oliver Pursche, senior vice president at Wealthspire Advisors in New York, noted that markets are intensely focused on the future of artificial intelligence, questioning whether companies will see a positive return on their massive investments and how quickly that return might happen. While the S&P 500 and Nasdaq ended October in negative territory, oil supermajors Exxon Mobil and Chevron bucked the trend, gaining 1.7 percent and 1.4 percent after beating profit expectations.

Context

Stock market selloffs of this scale are often driven by high investor expectations colliding with unexpected corporate spending patterns. When major technology firms report heavy investments in new technologies like artificial intelligence without immediate profit returns, market sentiment can shift very quickly. This dynamic frequently creates ripple effects across global financial indices as investors reassess company valuations.