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Wall Street closed October with a sharp selloff on Friday, October 30, as disappointing results from Intel and Amazon reignited a question that has haunted markets all month: is the enormous spending on artificial intelligence going to pay off, and how soon? The Nasdaq Composite fell 2.9 percent, its largest one-day percentage drop since June 5, while the S&P 500 lost 1.8 percent and the Dow Jones Industrial Average fell 1.1 percent.
The selloff was not a single-stock story. It was the market repricing the whole AI trade at once — after a month in which the same companies that are spending the most also reported the biggest cash outflows. Here is what happened on Friday, why it happened, and what investors are watching next.
The numbers from Friday's close
According to reports from Reuters, the Nasdaq lost 747.73 points to close at 25,437, the S&P 500 lost 140.32 points to 7,580.07, and the Dow fell 572.25 points to 51,770.31. The Nasdaq is now down 7.8 percent from its all-time closing high reached on October 6, and it suffered its worst monthly decline since March 2025. The S&P 500's technology sector posted its largest monthly percentage loss since March 2025, and communication services had its biggest monthly drop since April 2022.
Friday's trigger was earnings reported late on Thursday. Intel shares plunged 28.6 percent — its worst day since 1974 and its second-worst day on record, according to CNN — after the chipmaker warned it would burn cash this year, citing weakness in the personal-computer market, manufacturing bottlenecks and heavy spending to expand production. Amazon pared its losses during the session but still fell, after reporting a sharp cash outflow in the third quarter and signalling another increase in capital spending next year. That followed our Amazon earnings miss explainer, where a record operating margin was buried under a $77.3 billion spending quarter and soft holiday guidance.
Why chip stocks led the fall
Chipmakers bore the brunt on Friday. Nvidia fell 4.2 percent, AMD slid 10.9 percent, and the broader Philadelphia semiconductor index shed 7.2 percent, taking its monthly loss to more than 15 percent. Server makers Dell and HP dropped 10.8 percent and 9.6 percent respectively. The pattern is telling: investors did not just sell the companies that missed expectations — they sold the suppliers that depend on AI infrastructure spending continuing at any price.
Alphabet, Google's parent, fell a further 1.4 percent on Friday, capping its worst month on record after falling more than 12 percent on Thursday on a slowdown in search advertising and a sharp rise in cash burn — a day after our Alphabet earnings miss explainer. Meta also reported cash burn in the September quarter, while Microsoft stood out with a big cash-flow beat even as it raised $25 billion through a debt sale.
The spending question at the heart of the selloff
The deeper issue is scale. Amazon, Google, Microsoft and Meta together spent more than $200 billion in the third quarter alone, according to an analyst quoted by Reuters, and several companies have tapped the bond market to fund their AI buildouts — raising concerns that higher borrowing costs could make debt-funded investment harder to justify. Morgan Stanley forecasts capital spending on AI infrastructure will surpass $1 trillion next year, while J.P. Morgan expects global AI capital expenditure to reach $900 billion in 2026 and $5.5 trillion by 2030.
That is why Friday felt different from an ordinary bad earnings day. As one portfolio manager quoted by CNN put it, markets are moving out of the "hopes and dreams phase" of the AI trade and into a "show me" phase — demanding evidence that the spending will translate into profit, not just into bigger data centers. The brief relief earlier in the week, when Anthropic's IPO filing lifted tech stocks, faded as soon as the earnings showed how fast the cash is going out.
What to watch next
Two earnings reports now carry the whole trade: Apple, due next week, and Nvidia, due in mid-November. If either shows AI revenue growing fast enough to cover its spending, Friday's selloff may look like a correction. If both show the same pattern — strong cloud growth, soaring capital spending, soft guidance — the market's new scepticism could harden into a longer downturn. For now, the confirmed facts are stark: the Nasdaq's worst day since June, Intel's worst day in half a century, and a trillion-dollar question about AI returns that no earnings call has yet answered.