Stocks End October With Their Worst Day Since June as the AI Trade Unravels

U.S. stocks closed October with their worst day since June on Friday, as Intel's collapse and fresh scrutiny of AI spending dragged the Nasdaq down more than 3.8%.

Friday, Oct. 30, 2026, was the final trading day of October. The selling was concentrated in technology, and it deepened into the close.

The Nasdaq Composite dropped more than 3.8% on Friday. The S&P 500 fell 2.5%, and the Dow Jones Industrial Average fell 770 points, or roughly 1.5%.

Each index posted its worst day in months. The Nasdaq and the S&P 500 had their worst day since June, and the Dow its worst since July.

The closes left the Nasdaq down almost 9% from its record high earlier this month. The S&P 500 closed 3.5% below its record, and the Dow 5% below its early-August record.

Intel set the tone for chips

Intel plunged more than 30% on Friday, the session's defining single-stock move. The fall followed weaker guidance for the fourth quarter, announced with its results.

The company cited weakness in the PC market and manufacturing bottlenecks. PC is the personal computer market, still Intel's largest business by units.

The guidance miss landed despite a stronger reported quarter. Third-quarter revenue rose 21% to $13.7 billion, and data center and AI revenue jumped 78% to $7.3 billion.

The weak spot was the PC side. Client computing revenue fell 5% to $8.1 billion, and global PC shipments dropped 4% from a year earlier.

For the fourth quarter, Intel guided to revenue between $15 billion and $16 billion. It guided adjusted earnings to 25 cents a share, against analyst estimates of $17.1 billion of revenue.

Those guide figures are company guidance, announced with the results, not reported outcomes. The desk's standalone Intel article carries the full results detail.

The chip selloff did not stay with Intel

Nvidia shares dropped 5.6% on Friday. A closely watched index of chipmakers sank 9% on the day.

Advanced Micro Devices slumped 12%. Broadcom shed 6.5%, and Micron tumbled 7%.

The pattern was a sector repricing, not one company's miss. Investors questioned whether enormous AI spending will deliver the returns priced into the shares.

Amazon shares also dropped, falling 2% on Friday. The move followed an earnings report that indicated another increase in AI spending.

Amazon's third-quarter revenue was $201.9 billion and net income was $20.7 billion, both missing estimates. Its trailing twelve-month free cash flow was negative $42.4 billion as AI spending ramped.

Free cash flow is cash left after operations and capital spending. Amazon Web Services revenue rose 39% to $46 billion, its fastest growth in years, and still did not settle the spending question.

Alphabet shares fell another 1.5% on Friday. That followed a drop of more than 12% on Thursday, after its own results raised the same spending questions.

Microsoft was the contrast case inside the same trade. It announced $18.6 billion of positive free cash flow this quarter, and its stock sits about 5% below its record high.

Amazon, by contrast, reaffirmed its 2026 capital spending forecast of $220 billion. The reaffirmation, not the quarter alone, is what investors sold on Friday.

The selling reached beyond chips and platforms. Reddit tumbled about 30% on Friday despite a strong earnings report, after warning that AI search summaries are cutting its traffic.

Thursday had already set the pattern. ServiceNow plunged 27% on Thursday, its worst day on record, after a slight profit miss.

Defensives and energy found buyers

As investors dumped tech stocks, they rotated into defensive parts of the market. The consumer staples sector and government bonds drew the money leaving technology.

Energy was the other pocket of strength. Exxon Mobil gained 1% and Chevron advanced 1.5% after both topped third-quarter forecasts.

The desk covered the Exxon Mobil and Chevron results in standalone articles on Friday. Their gains show the selloff was a rotation, not a blanket exit from stocks.

October ended split, and so did the week

For the month of October, the Nasdaq lost 7% and the S&P 500 declined 1%. The Dow added 2%, a rare month-end split between the growth and value ends of the market.

For the week, the S&P 500 fell 1% and the Nasdaq shed 3%. The Dow lost 500 points across the five sessions.

Those weekly and monthly figures are the closing wrap's rounded totals. They frame the month plainly: October's record highs gave way to a spending audit.

What remains unknown

What remains unknown is whether Friday was capitulation or the start of a longer repricing. One session cannot answer that, and no verified evidence in hand settles it.

Also unknown is the settled cross-asset close. This wrap carries no closing level for volatility, Treasury yields, oil, or gold, because no closing source read in full stated them.

What to watch is Apple, which opens next week's earnings calendar on Monday after the closing bell. Analysts expect earnings of $1.99 a share.

Investors will also watch whether chip shares stabilize after a 9% one-day fall in the chip index. Another leg down would confirm Friday was a repricing, not a flush.