US stocks tumbled on Friday, with the Nasdaq suffering its largest one-day percentage drop spending AI-related companies are pouring into the nascent technology.
All three major US stock indexes slumped, with the Nasdaq sliding 2.9%. The tech-heavy index has now dropped 7.8% from the all-time closing high it reached on October 6.
The tech rout was triggered by underwhelming quarterly reports from Intel and Amazon released late on Thursday. While Amazon managed to pare its 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 shed 7.2%, slumping to a monthly loss of more than 15%. Server manufacturers 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 for 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 25,437.00.
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 <a s war in Ukraine. The stocks gained 2.2% and 2.8%, respectively.
