US: Wall Street closes sharply lower as AI cash burn fears spark tech sell-off
Published Sat, Oct 31, 2026 · 08:14 AM
[NEW YORK] US stocks tumbled on Friday (Oct 30), with the Nasdaq suffering its largest one-day percentage drop since Jun 5 following disappointing quarterly results from Intel and Amazon, which amplified growing worries surrounding AI-related companies’ massive spending on the nascent technology.
All three major US stock indices slumped, with the Nasdaq sliding 2.9 per cent. The tech-heavy index has dropped 7.8 per cent from its all-time closing high reached on Oct 6.
The tech rout was sparked by disappointing quarterly results from Intel and Amazon released late on Thursday. While Amazon pared losses as the session progressed, Intel shares plunged 28.6 per cent.
Chip stocks veered sharply lower, with Nvidia down 4.2 per cent and AMD sliding 10.9 per cent. The broader chips index shed 7.2 per cent, slumping to a monthly loss of more than 15 per cent. Server makers Dell and HP dropped 10.8 per cent and 9.6 per cent, respectively.
“It’s fair to say that this week, not just today, has been very much about the future of artificial intelligence and what that’s going to look like, whether there will be a positive return on investment and if so, how quickly,” said Oliver Pursche, senior vice-president at Wealthspire Advisors.
“Companies that are performing and meeting the very lofty expectations that have been set are doing well,” Pursche added. “Those that are falling short and seem to be missing the mark or not executing as expected are getting punished.”
All three main equity indices closed lower on the week. The S&P 500 and the Nasdaq logged monthly losses, while the Dow exited October with a gain.
The Dow Jones Industrial Average fell 572.25 points or 1.1 per cent to 51,770.31, the S&P 500 lost 140.32 points or 1.8 per cent to 7,580.07 and the Nasdaq Composite lost 747.73 points or 2.9 per cent to 25,437.
The S&P 500 tech sector posted its largest monthly percentage loss since March 2025, and communication services registered its biggest monthly drop since April 2022.
Third-quarter earnings season has passed the halfway mark, with 299 companies in the S&P 500 having reported. Of those, 82 per cent have beaten consensus expectations, according to LSEG data.
Analysts now expect third-quarter S&P 500 earnings growth of 31.6 per cent year on year, per LSEG.
Oil supermajors Exxon Mobil and Chevron both beat quarterly profit expectations, benefiting from soaring profit margins as a result of energy supply disruptions arising from the US-Israeli war with Iran and Russia’s war in Ukraine. The stocks gained 2.2 per cent and 2.8 per cent, respectively.
Starbucks dipped 1.8 per cent after the coffee chain forecast an annual revenue decline due to its divestiture of its Chinese business.
Cryptocurrency-related firms Coinbase, Strategy and Robinhood fell between 7.2 and 10.6 per cent in the wake of reports that hackers stole US$6.3 billion from Binance, the world’s biggest cryptocurrency exchange.
Declining issues outnumbered advancers by a 1.8-to-1 ratio on the New York Stock Exchange. There were 169 new highs and 377 new lows.
On the Nasdaq, 1,196 stocks rose and 3,622 fell as declining issues outnumbered advancers by a 3.03-to-1 ratio.
The S&P 500 posted 43 new 52-week highs and five new lows, while the Nasdaq Composite recorded 70 new highs and 355 new lows.
Volume on US exchanges was 19.87 billion shares, compared with the 17.26 billion average for the full session over the last 20 trading days. REUTERS
