Nasdaq 100 loses more than $2.5 trillion in October, nears correction
Key Facts
The Nasdaq 100 lost more than $2.5 trillion in market value during October and came close to entering correction territory, according to a Reuters report published Monday, November 2. Investors have grown more cautious about the sharp increase in big technology companies’ spending on artificial intelligence, the report said, as they await signs of stronger returns. The index fell 3.46% in Friday’s session, October 30, to 28,384.85 points, according to official Nasdaq data. Reuters described it as nearing a correction, defined as a 10% decline from its recent peak. The following day, Nasdaq’s page showed the index at 28,581.77 points, up 0.69% from the previous close, in a rebound after it came close to the correction threshold.
Technology stocks fell after results from major companies reopened debate over the scale of spending tied to artificial intelligence. The Associated Press said Alphabet, Google’s parent company, and Amazon’s results the previous week raised fresh questions about their massive investments in the field. The agency added that Amazon’s latest earnings report increased concerns about how much companies are spending on AI investments. Meanwhile, earnings-per-share growth forecasts for the Nasdaq 100 and the semiconductor index remained strong for the third quarter of 2026, according to the Nasdaq Economic Institute. But it warned that expectations were high and the margin for error narrow, particularly in AI-driven sectors.
Concerns center on whether large capital investments can generate returns commensurate with their cost, especially as the cost of capital rises. The Nasdaq Economic Institute said risks to stocks and the U.S. economy would increase if the economics of massive AI spending became more challenging, particularly in an environment of rising capital costs. Pressure had already emerged in the semiconductor sector: the Philadelphia Semiconductor Index entered correction territory on October 14, after falling 11.6% from its October 6 peak. Market weakness had also broadened before the latest selloff: 56% of Nasdaq 100 constituents were above their 200-day moving average at the start of October, compared with a recent peak of 77% on August 13. Even so, the index set a new record on October 6, according to the Nasdaq Economic Institute.
Friday’s session reflected the spread of pressure to other indexes and stocks. The Nasdaq Composite fell 2.9%, while the S&P 500 declined 1.8% in its worst day since June, and the Dow Jones dropped 572 points, or 1.1%, the Associated Press said. Intel shares fell 28.6%, their steepest drop since 1974, after the company forecast fourth-quarter earnings below analysts’ expectations, according to the agency. In a separate report, the Associated Press said AI stocks held up on Monday after a sharp decline the previous week, as concerns persisted that their prices may have risen too far. U.S. stock futures were pointing to a higher open on Monday, with technology and AI stocks steady after a weak October, Reuters reported.
Markets were also watching the U.S. midterm elections scheduled for Tuesday, November 3. The Associated Press said voters across the political spectrum had expressed growing concerns about artificial intelligence, data centers and inflation. Reuters reported that forecasts favored Democrats winning the House of Representatives, while the outcome in the Senate remained less clear. The elections will determine whether Democrats regain control of Congress, though that alone will not settle the course of technology policy. In the near term, investors also had results from other major companies on their calendar: Apple and Palantir were scheduled to report after the market close on Monday, while AMD was due to report quarterly results on Tuesday.