Bitcoin Falls Below $77,000 as Nasdaq Loses 2.9% Amid Doubts Over AI Spending
Key Facts
Bitcoin fell below $77,000 on Friday, Oct. 30, after topping $86,000 earlier in the month, according to the Associated Press. EL7 data showed the cryptocurrency closed at $77,368.77 that day. Its decline coincided with a broad retreat in U.S. stocks: the Nasdaq Composite lost 2.9%, the S&P 500 fell 1.8% and the Dow Jones dropped 1.1%. The S&P 500 posted its worst session since June, closing at 7,580.07 points, compared with 25,437.00 for the Nasdaq and 51,770.31 for the Dow Jones. The moves put risk assets under pressure in a session dominated by investor concerns over the cost of AI investment and whether it can generate returns to justify the spending.
Weakness in stocks extended into weekly losses for the major indexes, as technology shares continued to weigh on the Nasdaq. The Nasdaq fell 2% in the week ended Oct. 30, compared with declines of 0.6% for the S&P 500 and 0.9% for the Dow Jones, according to the Associated Press. Nvidia’s 4.2% drop was the single biggest drag on the S&P 500 in Friday’s session, the news agency reported. A day earlier, Alphabet shares fell more than 12%, their worst day ever, after the company told investors it had used more cash in the summer than in the spring. The moves came as the market scrutinized heavy spending on data centers and chips, and technology companies’ ability to turn it into profits and productivity.
The concerns centered on whether the hundreds of billions of dollars invested in AI would produce enough profit and productivity to make the spending worthwhile, amid worries that higher interest rates could slow data-center construction, according to the Associated Press. Company results offered concrete indications of the scale of spending and cash use: Amazon used $42.4 billion in free cash over the previous twelve months and spent $94.8 billion on property and equipment, mainly through AI investment, the news agency reported. Intel shares also fell 28.6% in Friday’s session, their steepest drop since 1974, after its earnings forecast for the final three months of the year came in below analysts’ expectations. Portfolio manager Joe Tigay summed up the shift in AI-related trading, saying: "We’re moving from a stage of hopes and dreams to a stage of show me." The shift reflects investors’ focus moving from promises tied to the technology to spending and revenue results.
In the bond market, the 10-year U.S. Treasury yield fell to 4.93% on Friday, from 4.98% at the end of Thursday, after topping 5.30% earlier in the month, according to the Associated Press. The news agency said yields fell as investors turned to bonds in search of safer assets. The yield had reached 4.98% on Oct. 26, after topping 5.30% during the month, when the news agency said the cost of borrowing to build data centers and buy AI chips was a source of investor concern. In the Oct. 26 session, the S&P 500 rose 0.7% and the Nasdaq gained 0.8%, as stocks recovered some of the previous week’s losses. The divergence highlights the volatility in AI-related stock trading as investors reassess financing costs and the scale of investment required.
U.S. economic data provided a supportive backdrop for activity: real gross domestic product grew at an annual rate of 3.4% in the third quarter of 2026, compared with 2.2% in the second quarter, according to the Bureau of Economic Analysis’ advance estimate. The bureau attributed the acceleration mainly to faster investment growth and a shift to an increase in government spending, partly offset by a decline in exports; consumer spending also rose during the quarter. Real final sales to private domestic purchasers increased at an annual rate of 4.9%, compared with 4.6% in the second quarter, according to the bureau. But price data showed inflation pressures persisted: the personal consumption expenditures price index rose 0.5% in September from the previous month and 3.6% from a year earlier. The index excluding food and energy rose 0.3% monthly and 3.1% annually, keeping inflation in the background of monetary policy decisions.
On Oct. 28, the Federal Reserve kept the target range for the federal funds rate at 3.75% to 4%, in a decision approved by a 10-to-2 vote. The two dissenting members preferred to raise the range by a quarter of a percentage point, according to the committee’s statement. The committee said "economic activity has been expanding at a solid pace," adding that "inflation remains elevated." The Federal Reserve meets on Dec. 8 and 9, 2026, according to its calendar. Before then, the Bureau of Economic Analysis has scheduled Nov. 25 for the release of its second estimate of third-quarter GDP and corporate profits, according to the bureau’s schedule.