Nasdaq Falls 3.60% as Concerns Grow Over AI Spending Returns and Binance Hack
Key Facts
The Nasdaq fell 3.60% in trading on October 30 as Amazon’s AI spending plans and Intel’s warnings about cash burn heightened investor concerns over the cost of building infrastructure and when returns would emerge. Reuters said the index hit its lowest level in about three months, while the Nasdaq Composite was down 3.1% at 1:20 p.m. Eastern time, heading for its worst day since June. Reuters estimated that the Nasdaq-100 was poised to lose slightly more than $1 trillion that day. Meanwhile, Intel shares fell about 30% after the company’s fourth-quarter earnings outlook came in below analysts’ estimates. The report attributed pressure on stocks to questions about the returns on AI investments and their costs, rather than to a single cause affecting both stock and cryptocurrency markets.
The concerns are tied to the scale of Amazon’s announced cash spending. The Associated Press said the company had burned through $42.4 billion, measured by free cash flow, over the previous twelve months, and spent $94.8 billion on property and equipment, most of it on AI investments. The figures come as investors watch whether massive investments will translate into returns, and over what timeframe. AP quoted portfolio manager Joe Tigay as saying that the AI trade “is moving from a phase of hopes and expectations to one in which companies are being asked to prove results.” The assessment reflects a shift in the debate from the technology’s potential to companies’ ability to justify their spending to the market. Amazon’s results and plans, along with Intel’s warning, were at the center of concerns Reuters linked to the decline in technology stocks.
In cryptocurrency markets, Reuters linked weaker investor appetite to the hack of Binance, the world’s largest cryptocurrency exchange, and put the value of the reported theft at about $6.3 billion. The report said the impact extended to crypto-linked assets and technology stocks, with Coinbase shares down 13% at the time of publication. AP said Binance had stated it was working with blockchain partners to freeze about $3 billion in affected assets and would cover the losses. It added that deposits were unaffected, while withdrawals were temporarily suspended. Cryptocurrency market pressure thus came in the context of a security incident at the exchange, separate from concerns about returns on technology companies’ spending that weighed on stocks.
Bitcoin fell toward $77,000 on October 30, after being above $86,000 earlier in the month, according to AP. Inflation data released by the U.S. Commerce Department on October 29 relates to September, and the sources do not identify it as a cause of the market decline. The personal consumption expenditures price index rose 3.6% from September a year earlier, while the index excluding food and energy increased 3.1% year over year. The reading provides economic context for markets, with the measurement period clearly specified, but does not establish a causal link to the sell-off. The Bureau of Economic Analysis is scheduled to release its October personal income and outlays report on November 25, 2026.
Investors are also looking ahead to upcoming corporate results. Reuters said Apple would report results in the week after its October 30 report, while Nvidia’s expected reporting date would be in mid-November. The dates come as the market focuses on AI spending and the returns companies can generate from their investments. In the bond market, the yield on the 10-year U.S. Treasury fell by more than 7 basis points in Tokyo trading on October 30 to 4.91%. It declined by about 37 basis points during October, its largest monthly drop since December 2023, according to Reuters. These moves in stocks and bonds provide the market backdrop at month-end, while upcoming corporate results remain a near-term focus for investors.