• Nasdaq Composite closed at 26,184.72 on October 29, down 1.38% and 2.52% for October, as disappointing earnings from Amazon (AMZN) and Intel (INTC) ignited a broad tech selloff.
  • Futures pointed to further declines Friday morning, with Nasdaq-100 futures down 2%-2.5%, while investors fled to Treasuries amid concerns over AI spending and persistent inflation.
  • The pullback extends beyond U.S. borders, with Japan's Nikkei falling 2.12% and South Korea's Kospi losing 3.48%, as global investors reassess technology valuations.

Earnings Misses Spark Renewed Selling

The technology-heavy Nasdaq Composite tumbled to its lowest level in nearly three months on Thursday, closing at 26,184.72, down 365.13 points, or 1.38%. The decline left the index down 2.52% for October, though it remains up 12.66% for the year. The selloff accelerated in after-hours trading and into Friday morning, with Nasdaq-100 futures falling roughly 2%-2.5%, according to market data, though those futures do not directly correspond to the cash index.

The immediate catalysts were disappointing quarterly results from Amazon and Intel. Amazon shares fell nearly 7% in premarket trading after the company reported third-quarter revenue of $201.94 billion and earnings of $1.89 per share, missing expectations of $202.31 billion and $1.96. The e-commerce and cloud giant also maintained a $220 billion capital-expenditure forecast for 2026, but reported negative free cash flow of $42.4 billion, according to CNBC. Intel dropped almost 26% after its client-computing and physical-AI business saw revenue decline 5% year over year to $8.1 billion, and the company guided current-quarter revenue to $15 billion-$16 billion, well below the $17.1 billion consensus, with adjusted EPS of $0.25 versus expectations of $0.43.

AI Spending Concerns Mount

Alphabet (GOOGL) also contributed to the malaise, with shares falling roughly 12%-13% on Thursday after quarterly earnings and revenue missed expectations. The Google parent reported negative free cash flow of $9.07 billion, intensifying scrutiny of its investment spending. The broad retreat from AI-linked stocks reflects growing investor skepticism over whether the massive capital expenditures across the sector will generate sufficient returns.

"Strong AI demand alone is no longer enough to reassure investors," said Daniela Hathorn, an analyst at Capital.com, according to a note to clients. "The market is now demanding evidence of sustainable revenue and margins."

The rotation out of technology was pronounced. While Nasdaq-100 futures fell 2%-2.5% Friday morning, S&P 500 futures were down only about 1%, and Dow futures were slightly positive, underscoring the concentration of losses in the tech sector. Investors moved toward Treasuries, seeking safety amid the turbulence.

Economic Backdrop Complicates Picture

The selloff comes against a backdrop of resilient economic growth but stubborn inflation. The U.S. economy grew at a 3.4% annualized rate in the third quarter, according to an advance estimate released October 29. However, September's headline personal consumption expenditures inflation accelerated to 3.6% year over year, remaining well above the Federal Reserve's 2% target. The combination suggests limited room for easier monetary policy.

The Fed held rates steady on October 28 after raising them in September, and markets broadly expect another quarter-point increase in December, according to reports. Higher energy costs are adding to the pressure, with Brent crude near $117.50 per barrel, up more than 13% for October.

Global Contagion

The technology selloff spread internationally. Japan's Nikkei fell 2.12%, South Korea's Kospi lost 3.48%, and European technology shares declined around 1.9% in early trading. The synchronized move highlights how interconnected global equity markets have become, particularly in the technology sector.

In a sign of the strain on AI infrastructure companies, CoreWeave (CRWV)'s bond yields have risen, and its shares had fallen about 30% in October, while Nebius (NBIS) was heading for a roughly 27% monthly decline, according to CNBC. The rising cost of debt for these companies adds another layer of risk.

Looking Ahead

With the midterm elections approaching, the economic management of inflation and growth is particularly salient. The reviewed sources do not establish a new tariff, export restriction, or other regulatory announcement as the direct trigger for this particular selloff; their principal explanation is earnings and AI-investment concerns.

Microsoft (MSFT) offered a contrasting picture, reporting stronger results including 48% Azure revenue growth, suggesting that not all AI businesses are deteriorating uniformly. Sandisk (SNDK) fell more than 8% in premarket trading despite beating quarterly estimates, evidence that an earnings beat alone was not sufficient to overcome sector-wide concerns.

The coming weeks will likely bring continued scrutiny of earnings guidance, free cash flow, AI capital-expenditure plans, and interest-rate expectations. Hathorn warned that the concentration of market gains in a handful of technology companies could leave the Nasdaq particularly vulnerable when those companies disappoint.

Correction: An earlier version of this article misstated the day of the week for the October 29 close. It was Thursday, not Wednesday. The article has been updated.