Nasdaq hits near three-month low as Amazon, Intel rattle AI trade
SPY•The Nasdaq fell 2.48% to its lowest in nearly three months as Amazon’s AI spending plans and Intel’s cash-burn warning heightened concerns about AI costs and returns. The S&P 500 fell 1.56% and the Dow dropped 0.71%.
1. AI spending worries weigh
The Nasdaq fell to its lowest in nearly three months on Friday as Amazon’s capital-spending plans and Intel’s cash-burn warning raised concerns about the cost of AI expansion and the timeline for returns. Amazon fell 2% after reporting a sharp third-quarter cash outflow and signaling another increase in capital expenditure next year. Intel slid nearly 29% after warning it would burn cash this year.
2. Chip stocks sell off
Intel’s warning contributed to a global chip-stock selloff: Nvidia fell 3.7%, AMD dropped about 10% and the broader chips index shed 7%. Amazon and Intel were set to lose nearly $200 billion in combined market value if their declines held. At 11:52 a.m. ET, the Nasdaq Composite was down 2.48%, the S&P 500 1.56% and the Dow 0.71%.
3. Defensive sectors gain
Investors rotated into consumer staples and healthcare, which rose 1.6% and 0.7%, respectively; healthcare hit a record high. The three major indexes were on course for weekly losses, while the Nasdaq was set to snap a two-month winning streak in October.
