Wall Street slides as AI cash burn worries spark tech selloff
SPY•U.S. stocks tumbled, with the Nasdaq falling 3.37%, as Intel and Amazon’s disappointing results heightened concerns about AI spending and when it will pay off. The S&P 500 fell 2.08% and the Dow dropped 1.08%.
1. Tech shares fall
The Nasdaq slid to a three-month low on Friday after disappointing quarterly results from Intel and Amazon amplified concerns about heavy spending on artificial intelligence and whether it will generate returns. The Nasdaq fell 3.37%, the S&P 500 lost 2.08% and the Dow declined 1.08%.
2. Broad market losses
Intel shares fell 2.1% and Amazon shares dropped 30.9%. Nvidia declined 5.3%, AMD fell 12.1%, and the broader semiconductor index shed 8.7%. Amazon and Intel were set to lose nearly $200 billion in combined market value if their losses held, while the Nasdaq-100 was on track to erase more than $1 trillion.
3. Earnings and other movers
The S&P 500 and Nasdaq were on track for weekly and monthly losses, while the Dow was set to finish October higher. Of 299 S&P 500 companies that had reported third-quarter results, 82% beat consensus expectations; analysts expected earnings growth of 31.6% year over year. Exxon Mobil and Chevron beat quarterly profit expectations and gained 1.7% and 1.4%, while Starbucks fell 1.4% after forecasting an annual revenue decline tied to its divestiture of its Chinese business.
