Nasdaq falls 3.4% as tech stock repricing widens and AI returns come under scrutiny
Key Facts
The Nasdaq Composite fell 3.4% by 2:15 p.m. Eastern time on October 30, while the S&P 500 declined 2.2%, according to the Associated Press. The pressure came as investors reassessed tech company valuations in light of the returns that artificial intelligence investments could generate. The news agency quoted a portfolio manager as saying the market was moving from a phase of hopes and expectations to one in which companies are being asked to show results. The shift reflects questions about whether heavy AI spending can generate revenue and profits that justify company valuations. The decline extended to cryptocurrency-linked stocks, while coverage tied broader market concerns to the cost of investment and its returns.
Reuters reported that Amazon recorded a sharp cash outflow in the third quarter and signaled another increase in capital spending next year. The indication came as investors debate the resources needed to build AI capabilities and how long those investments may take to show up in results. The session’s pressure was not limited to one company, as spending concerns coincided with results from other tech companies. Reuters said Intel shares were heading for their biggest one-day drop on record, down about 29%. The company attributed its warning of cash consumption this year to weakness in the PC market, manufacturing hurdles and spending to expand production.
Reuters reported that the Nasdaq Composite had lost 650.77 points, or 2.48%, at 11:52 a.m. Eastern time on October 30. In a separate report, it said more than $2 trillion in market value in the Nasdaq 100 was at risk of disappearing during October, after the index fell more than 5.8% since the start of the month. The report linked the decline to major tech companies raising their AI spending forecasts. On October 30, Nvidia shares fell 5.3% and were the biggest drag on the S&P 500, according to the Associated Press. Nvidia’s impact on the index exceeded Intel’s, the news agency said.
Moves in cryptocurrency stocks showed the pressure extending to the sector: Coinbase shares fell 14.2% despite reporting quarterly results that beat analysts’ expectations. Strategy shares also fell 9% after reporting stronger-than-expected earnings, according to the Associated Press. The two stocks declined on a day when Binance said the estimated total impact of its security incident was about $6.3 billion. The platform said blockchain partners had helped freeze about $3 billion of affected assets on-chain as of an October 30 update. Reuters estimated that most of the hack took place over about 20 minutes, beginning shortly after 20:00 GMT on Thursday.
Binance said its preliminary investigation indicated that a DevOps engineer’s laptop may have been compromised, allowing the attacker to access a service container and submit unauthorized withdrawal transactions. The platform added that it had found no evidence that private wallet keys were leaked. The Associated Press reported that stablecoin companies Tether and Circle froze funds linked to the incident; Circle estimated the amount at more than $800 million, while Tether froze more than $1.5 billion. Reuters said stablecoin issuers and counterparties froze about half of the stolen assets. Binance temporarily suspended withdrawals during security checks and said it would cover all losses from its SAFU fund and company funds.
In cybersecurity, Fortinet reported a 20% year-over-year increase in revenue to $2.08 billion in the third quarter of 2026. Product revenue rose 37% to $765 million, while billings increased 29% to $2.34 billion. The company posted a generally accepted accounting principles operating margin of 34%, earnings per share of $0.86 and operating cash flow of $946 million. Free cash flow was $865 million in the same period. Fortinet forecast revenue of between $8.125 billion and $8.215 billion for fiscal 2026, and services revenue of between $5.150 billion and $5.170 billion.
Fortinet’s chief executive said demand was broad across the company’s portfolio and that it had raised its 2026 billings forecast for the third time this year. He described network security as “the critical foundation of AI security.” In the bond market, the yield on 10-year U.S. Treasuries fell to 4.92% from 4.98% late Thursday, after exceeding 5.30% earlier in October, according to the Associated Press. Brent crude rose 2.4% to $113.50 a barrel on October 30. The following week includes the U.S. October jobs report, scheduled for Friday, which Reuters said could offer fresh signals on the Federal Reserve’s next move.