S&P 500 Falls 0.3% Thursday as AI Stocks Drop 2.7%
Key Facts
The S&P 500 fell 0.3% to 7,720.39 points in Thursday’s session on October 29, 2026, its first decline in four days, according to the Associated Press. The drop came as questions mounted about the returns companies will generate from their massive investments in artificial intelligence. But the market’s move was not a broad selloff: more than 400 companies in the index rose, according to a Bloomberg report published by SWI swissinfo. Pressure was concentrated in a number of technology stocks, while the breadth of advancing shares limited the broader index’s loss. This session differed from the decline on Friday, October 30, when the indexes fell more sharply, according to that day’s session data.
Alphabet, Google’s parent company, was the main driver of market losses on Thursday after recording its biggest drop ever following a weaker-than-analysts-expected summer growth report, the Associated Press said. The result brought investors’ question back to the fore: can rising AI spending generate returns that justify its cost? In the technology sector, the Nasdaq Composite lost 1.4% to close at 26,184.72 points, while the Dow Jones Industrial Average fell 0.3% to 52,342.56 points. The Nasdaq 100 fell 1.4%, and a basket of winning AI stocks dropped 2.7%, according to Bloomberg. Still, not all technology companies fell, consistent with hundreds of stocks advancing within the S&P 500.
Chris Larkin of Morgan Stanley’s E*Trade described Thursday’s move as a “microcosm” of what the stock market had experienced through much of October. He said concerns about AI investment weighed on technology and communication services stocks, while other sectors were less affected. The divergence suggests investors were reassessing some AI-linked stocks rather than abandoning the entire market. The disparity was also reflected in the breadth of advancing shares, despite losses in indexes with heavy technology-company weightings. In its market report for Thursday, bitcoin fell 1.3% to $80,227.45, and ether declined 2.1% to $2,309.16.
The flight to havens included an 8-basis-point decline in the yield on 10-year U.S. Treasury notes to 4.94%, according to Bloomberg, as investors moved into bonds. This comes amid a broader debate over the cost of financing the infrastructure needed for AI, including data centers, while high interest rates remain a concern for investors. The Associated Press said concerns center on whether investments totaling hundreds of billions of dollars will generate enough profit and productivity to justify their cost. The agency also quoted portfolio manager Joe Tigai as saying: “We’re moving from the hopes-and-dreams phase of AI trading to: Show us the results.” That assessment puts the market’s focus on companies’ ability to demonstrate the operational and financial returns on spending, rather than investment plans alone.
Amazon’s figures offered an example of the scale of spending investors are watching: the company reported spending $94.8 billion on property and equipment in the twelve months before its October 30 report, most of it investment in AI technologies. It also reported a $42.4 billion drain on free cash flow over the same period, according to the Associated Press. This coincided with continued pressure on technology stocks in Friday’s October 30 session: Intel shares fell 28.6% after its profit forecast for the final three months of the year came in below analysts’ expectations. Nvidia shares fell 4.2% in the same session and were the biggest single drag on the S&P 500. The Nasdaq Composite fell 2.9% to 25,437.00 points, and the Dow Jones declined 1.1% to 51,770.31 points.
For the trading week ended October 30, the S&P 500 lost 0.6%, the Nasdaq fell 2% and the Dow Jones declined 0.9%, according to the Associated Press. The weekly tally captures the effect of Friday’s weaker session after Thursday’s limited decline, without changing the fact that Thursday’s performance varied across market sectors and stocks. Upcoming economic releases include the Institute for Supply Management’s manufacturing report on November 2, according to the institute’s calendar. The U.S. October jobs report is due November 6 at 8:30 a.m. Eastern time, followed by the consumer price index for the same month on November 10 at the same time, according to the U.S. Bureau of Labor Statistics. The Bureau of Economic Analysis also scheduled its October personal income and outlays report for November 25 at 8:30 a.m. Eastern time.