US Stocks Plunge as Nasdaq Experiences Largest Drop Since June
In a surprising turn of events, US stocks experienced significant declines as Intel and Amazon reported disappointing earnings, casting doubt on artificial intelligence investments. US stocks ended Friday's session with notable losses, as concerns over the scale of investments in AI and the time required to generate returns weighed heavily on investor sentiment. Disappointing quarterly performances from Intel and Amazon further fueled the technology selloff, pushing the Nasdaq composite to its steepest single-day percentage decline since June 5.
The Nasdaq plunged 2.86 percent to settle at 25,437.00, while the S&P 500 shed 1.82 percent to close at 7,580.07. The Dow Jones Industrial Average also slipped 1.09 percent, ending the session at 51,770.31. The technology-focused Nasdaq has now retreated 7.8 percent from its record closing high registered on October 6. The latest wave of selling came after Intel and Amazon released their quarterly results late on Thursday, prompting investors to reassess the prospects of companies making substantial investments in AI.
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Intel shares suffered a steep 28.6 percent decline, while other major chipmakers also witnessed heavy selling. Nvidia dropped 4.2 percent and AMD lost 10.9 percent. The broader semiconductor index tumbled 7.2 percent, taking its monthly decline beyond 15 percent. Server manufacturers were not spared either, with Dell shares falling 10.8 percent and HP declining 9.6 percent.
Investors Focus on AI's Future Amid Market Volatility
Oliver Pursche, senior vice president at Wealthspire Advisors in New York, noted that this week has been very much about the future of AI and what that looks like, whether there will be a positive return on investment and if so, how quickly. Pursche highlighted that companies delivering results in line with or above elevated market expectations were continuing to perform well, while those missing targets faced significant selling pressure.
Market Decline Reflects Broader Trends Despite Strong Earnings
The weakness extended beyond individual stocks. The S&P 500's broader technology sector registered its largest monthly percentage decline since March 2025. Meanwhile, the communication services sector recorded its sharpest monthly fall since April 2022. However, the overall corporate earnings picture remained encouraging despite the market downturn. According to LSEG data, 82 percent of the 299 S&P 500 companies that had announced their third-quarter results exceeded analysts' consensus estimates, with analysts projecting year-on-year earnings growth of 31.6 percent for the quarter.
Cryptocurrency-linked stocks also came under pressure following reports that hackers had stolen USD 6.3 billion from Binance. Shares of Coinbase, Strategy, and Robinhood declined between 7.2 percent and 10.6 percent. All three key US stock indices ended the week in the red, with the S&P 500 and Nasdaq also posting losses for the month.
