Wall Street closes sharply lower as AI cash burn fears spark tech selloff

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%. Chip stocks veered sharply lower, with Nvidia down 4.2% ​and AMD sliding 10.9%. The broader chips index (.SOX), opens new tab shed 7.2%, slumping to a monthly loss of more than ⁠15%. Server makers Dell and HP dropped 10.8% and 9.6%, respectively.

"It's fair to say that this week, not just today, has been very much ​about the future of AI 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 in New York. "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 indexes ​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 1.09%, to 51,770.31, the S&P 500 lost 140.32 points, or 1.82%, to 7,580.07 and the Nasdaq Composite lost 747.73 points, ‌or 2.86%, ⁠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% have beaten consensus expectations, according to LSEG data. Analysts now expect third-quarter S&P 500 earnings growth of 31.6%, 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% and 2.8%, respectively. Starbucks dipped 1.8% 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% in the wake ​of reports that hackers stole $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 NYSE. 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 5 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.