Nasdaq Falls 2.9% to 25,437 as Technology Selloff Widens
Key Facts
The Nasdaq Composite fell 2.9% in Friday’s October 30 session, closing at 25,437.00 points as the technology selloff on Wall Street deepened, according to the Associated Press. The S&P 500 fell 1.8% to 7,580.07 points, marking its worst daily performance since June. The Dow Jones Industrial Average dropped 572.25 points, or 1.1%, to 51,770.31 points. The moves showed that pressure was not confined to technology stocks, although they were at the center of the selloff. The session’s losses were part of another down week for the S&P 500.
The Associated Press said the technology stock selloff intensified on concerns that investors’ enthusiasm for artificial intelligence had pushed prices too high. Those concerns extended to whether companies could justify the amount of money they were pouring into technology infrastructure tied to AI. Amazon’s earnings report also raised further questions about how much companies are spending on AI investments. The company’s figures offered a tangible indication of the scale of those capital commitments. Amazon spent 94.8 billion dollars on property and equipment, mostly on AI technology investments, while free cash flow was negative 42.4 billion dollars over the previous twelve months, the agency reported.
Intel was one of the biggest sources of pressure on technology stocks, falling 28.6% in Friday’s session, its worst daily decline since 1974, according to the Associated Press. The drop came after the company forecast fourth-quarter earnings below analysts’ estimates. That move establishes the session’s loss alone and does not verify the monthly decline cited in the previous draft. In another session covered by the agency in October, all but 7 of the 75 technology stocks in the S&P 500 fell. Micron Technology shares dropped 5.6%, AMD fell 6%, Broadcom lost 4.5% and Intel declined 5.8% that day.
Concerns about technology valuations overlapped with worries about the cost of financing companies’ AI expansion. The Associated Press said investors feared that companies that had relied on debt markets to fund a wave of technology investment might not be able to keep borrowing and spending at the same pace. The concern was linked to rising bond yields globally, which could increase companies’ financing costs. The yield on the 10-year U.S. Treasury had topped 5.30% earlier in the month, its highest level since 2002, amid inflation concerns and the strength of the U.S. economy. It fell to 4.93% at the close of the October 30 session, from 4.98% at Thursday’s close.
For the week, the S&P 500 closed lower for a third straight week through October 30. It fell about 2% over the week, wiping out its gains from the previous week, according to the Associated Press. In the week ended October 16, the Nasdaq had fallen 2.1%, recording its first weekly loss after five weeks of gains and its worst week since June. These moves show successive weeks of pressure on technology stocks during the month. But the latest session data reported here do not establish the Nasdaq’s performance for all of October or its historical ranking among months.
Attention now turns to the U.S. jobs report for October, due on November 6. A FactSet poll forecast that the report would show 55,000 jobs added during the month. The release will be the next economic milestone for markets after a session marked by declines in U.S. indexes and technology stocks remaining at the center of concerns about AI valuations and related spending.