Tech Rout Deepens as Amazon and Intel Earnings Spark AI Spending Fears

Key points

• The Nasdaq Composite fell 2.4%, the S&P 500 dropped 1.2%, and the Dow Jones Industrial Average declined 0.3% on Friday, October 30, 2026.
• Intel shares fell 29% in premarket trading after the company issued fourth-quarter guidance below analyst expectations, citing a PC market slowdown and memory chip issues.
• Amazon shares fell 4% after reporting a record negative free cash flow of $42.4 billion over the past 12 months, driven by heavy spending on AI data centers and equipment.
• Alphabet shares continued to decline, having fallen 12% on Thursday, their worst day since 2004, amid concerns over AI spending and search advertising revenue.
• Oil prices rose, with Brent crude reaching $113 per barrel and WTI crude hitting $104 per barrel, due to fears of renewed US strikes on Iran.
• Bitcoin fell below $78,000 after Binance confirmed a $6.3 billion hack, the largest in crypto history, with blockchain firms linking the theft to North Korean hackers.

Background

US stock markets had experienced volatility in October 2026, with the Nasdaq and S&P 500 falling on October 8 due to AI revenue concerns, while the Dow rose. On October 20, the S&P 500 and Nasdaq rebounded as investors awaited earnings from SpaceX and Netflix. In late September, AI stocks rallied, with Microsoft surging 3.66% and the Dow hitting 51,828. The current sell-off follows a period of mixed performance, with investors increasingly scrutinizing the return on investment for AI spending.

How outlets are covering it

Yahoo Finance and CNN emphasize the record negative free cash flow at Amazon and the broader concern over AI spending sustainability, with CNN noting that Alphabet and Meta are in bear markets. CNBC highlights the specific earnings misses from Amazon and Intel, as well as the positive results from Rivian and AstraZeneca. CBS News focuses on the sharp drop in Nasdaq futures and the advice from UBS to diversify beyond AI. All sources agree on the significant market decline and the role of tech earnings in driving the sell-off, but differ in emphasis on specific companies and broader market implications.

Why it matters

The sell-off signals growing investor skepticism about the profitability of AI investments, potentially leading to a broader market correction. The record negative free cash flow at Amazon and weak guidance from Intel suggest that the high costs of AI infrastructure may not yield immediate returns. Rising oil prices and a major crypto hack add to market volatility, while geopolitical tensions in the Middle East could further impact energy markets. The situation may lead to a reassessment of AI valuations and a shift in investor strategy.

What to watch

Investors will watch for further tech earnings reports and any signs of a shift in AI spending. The US midterm elections, scheduled for next week, could also impact market sentiment. Oil prices may continue to rise if the US resumes strikes on Iran. Crypto markets may remain volatile as Binance works to recover funds from the hack. The Bank of Japan's decision to hold rates steady may influence global currency markets.