- US stocks dropped sharply with Nasdaq's biggest one-day percentage fall since June
- Intel shares plunged 28.6% after reporting significant cash burn on AI spending
- Chip stocks fell heavily; Nvidia down 4.2%, AMD lost 10.9%, semiconductors dropped 7.2%
US stocks fell sharply on Friday, with the Nasdaq suffering its biggest one-day percentage drop since early June, after disappointing results from Intel and Amazon deepened worries about AI spending.
The Dow fell 1.09% to 51,770.31, the S&P 500 lost 1.82% to 7,580.07, and the Nasdaq Composite dropped 2.86% to 25,437.00, Reuters reported. The Nasdaq is now 7.8% below its record close on October 6.
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What Triggered The Rout
Intel and Amazon reported results late on Thursday. Intel plunged 28.6% after reporting a big cash burn, while Amazon pared losses as the session went on.
Amazon's aggressive AI spending plan and Intel's cash burn warning intensified concerns over the cost of AI infrastructure and the timeline for returns.
Chip stocks fell hardest. Nvidia lost 4.2% and AMD 10.9%, while the Philadelphia semiconductor index shed 7.2% on the day and has lost more than 15% this month. Server makers Dell and HP dropped 10.8% and 9.6%.
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Worst Month In Over A Year
The Nasdaq 100 posted its worst month since March 2025, according to Bloomberg. The S&P 500 technology sector had its biggest monthly loss since March 2025, and communication services its biggest since April 2022.
More than $2 trillion in market value was set to be wiped from the Nasdaq 100 in October. AJ Bell's Dan Coatsworth said that if futures-indicated losses held, about $3 trillion would have been erased since the October 6 peak.
Pressure On Big Tech
S&P Global Ratings took an early step towards possibly downgrading Meta's credit rating within two years, as AI spending strains its balance sheet. Apple reclaimed the title of world's most valuable company from Nvidia.
Bloomberg noted that the advertising, consumer and retail businesses funding about $750 billion of AI spending this year are starting to slow.
Matt Maley of Miller Tabak said the slowdown pushes the big AI payoff further into the future. He warned that if the major averages keep falling, investors may stop rotating into other sectors, which has helped hold up the market.
Beyond Tech
Crypto stocks also fell. Coinbase, Strategy and Robinhood lost between 7.2% and 10.6% after reports that hackers stole $6.3 billion from Binance. Bitcoin fell 2.5% to $76,813.65.
Exxon Mobil and Chevron rose 2.2% and 2.8% after beating profit expectations. West Texas Intermediate crude rose 0.9% to $102.94 a barrel.
The selloff came despite a strong earnings season overall. Of the 299 S&P 500 companies that have reported third-quarter results, 82% beat estimates, according to LSEG data.
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