Everything About AI
NextFin News - U.S. stocks sold off sharply Friday as disappointing earnings from Intel and Amazon deepened a technology rout and renewed doubts about the cost of the AI boom. The S&P 500 had its worst day since June, the Nasdaq Composite its worst day since June 5, and the S&P 500 breached its key 100-day moving average. The session's central tension was that AI-spending anxiety, which first hit Meta and Alphabet earlier in the week, spread across the market. October ended as the Nasdaq's worst month since March 2025, with the index down about 5.3% for the month, while the Dow gained about 1.5%.
The Dow Jones Industrial Average fell 1.2%
The S&P 500 Index fell 2.0%
The Nasdaq Composite declined 2.8%
Stock & Sector Performance
Technology led the decline. Intel sank about 29%, its worst day since 1974, after giving a fourth-quarter profit forecast that fell short of analysts' expectations. The drop came even though the chipmaker reported stronger profit for the latest quarter than analysts expected, and CEO Lip-Bu Tan said the personal-computer industry continues to feel pressure. Nvidia fell about 4.7% to 4.9% and was the heaviest single drag on the S&P 500, ahead of even Intel. Amazon fell about 2% after weaker third-quarter profit and higher capital spending. Reddit, Illumina, Twilio and Coinbase were also among the day's laggards. The Dow's smaller decline reflected its limited tech exposure, and the Russell 2000 had opened higher.
Among the Magnificent Seven, Nvidia's roughly 5% decline and Amazon's drop of about 2% led the weakness, following Alphabet's 12% fall on Thursday, its worst day on record, and Meta's and Tesla's declines after their earnings last week.
Hot Sectors to Watch
AI infrastructure and semiconductors are in a confirmed downtrend rather than a short-term correction. Chip stocks fell for another day, Nvidia lost nearly 5% and Intel's collapse showed the market punishing even a profit beat if the guidance disappoints. The S&P 500 and Nasdaq are now on track for a third straight losing week and the S&P 500 is near its lowest level in about two months. Joe Tigay of Equity Armor Investments said, "We're moving out of the hopes and dreams phase of the AI trade and into the 'show me' phase."
Defensive and value areas held up much better. The Dow rose about 1.5% for October while the Nasdaq fell more than 5%, a gap that reflects a clear rotation away from AI-heavy growth into industrial and value names.
Major Story of the Day
Amazon and Intel were the day's twin catalysts. Amazon reported third-quarter net sales up 12% to $201.9 billion and earnings of $1.89 per share, below the $1.97 consensus, though AWS grew 39%. Its heavy AI build-out pushed free cash burn to a record. Intel's results capped a week in which Meta, Alphabet, Amazon and Tesla all drew sharp selling after showing pressured free cash flow amid aggressive AI spending. Alphabet's 12% drop on Thursday was its worst day on record.
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