The Nasdaq Composite index fell 2.2% amid a sharp drop in tech and AI stocks led by Intel and Amazon, with liquidity shifting toward healthcare and consumer goods sectors.
US stock markets witnessed a sharp wave of declines across the technology sector, driven by broad liquidations out of companies linked to artificial intelligence. This followed quarterly earnings releases from tech giants Amazon and Intel that fell below expectations, prompting investors to redirect liquidity into traditional defensive sectors.
Performance of Major US Indices
Selling pressure was reflected across Wall Street indices at the close of weekend trading:
Nasdaq Composite: Fell by 2.2%, putting it on track for a monthly loss of nearly 5% for October.
S&P 500: Decreased by 1.2%.
Dow Jones Industrial Average: Declined slightly by 0.3%, maintaining a monthly gain trajectory of over 2% supported by traditional sectors.
Record Losses for Chipmakers and Big Tech
Major tech and AI stocks were directly impacted by valuation and operational pressures:
Intel: Suffered a 26% plunge after providing weak revenue forecasts for the current fiscal quarter.
Amazon: Fell 5% after reporting negative free cash flow of $42.4 billion and earnings below analysts' estimates.
Semiconductor Sector: Shares of AMD dropped by 10%, Broadcom by 4%, and Nvidia by 3%.
Alphabet: Pressures persisted on the software sector following Google's parent company recording its worst daily performance in history during the previous trading session.
Liquidity Rotation into Defensive Sectors
Conversely, the session saw gains in healthcare and consumer staples stocks as investors sought more stable havens within the equity market. This comes amid growing institutional skepticism regarding the viability of massive capital expenditures on AI infrastructure and companies' ability to convert those investments into sustainable near-term returns.
