Wall Street Has Its Worst Day Since June as Intel Crashes 29%

Keypoints:

• The S&P 500 fell 1.8% on Friday and the Nasdaq dropped 2.9%, both their worst days since June
• The Nasdaq is now 7.8% below its October 6 record, and the S&P 500 lost a third straight week
• Intel fell about 29%, its worst day since 1974
• Intel guided fourth quarter revenue of $15 billion to $16 billion, below the roughly $17 billion expected
• Amazon's earnings miss added to worries about huge AI spending

Friday was a rough one for US stocks. A sell-off in technology deepened as investors worried again that the AI boom has pushed prices too high. The S&P 500 lost 1.8% to 7,580.07, its worst day since June, and finished a third straight losing week. The Nasdaq dropped 2.9% to 25,437.00. The Dow lost 572 points, or 1.1%. Tech stocks wiped out more than $1 trillion in value in a single day, and reports say the Nasdaq 100 lost more than $2 trillion over October.

The loudest crash was Intel. Its shares fell about 29% to $65.76, the worst one day drop since 1974, erasing well over $100 billion in value. This was odd because Intel actually beat expectations for the third quarter, and its data center business grew about 78%. The shock came from the forecast. Intel expects fourth quarter revenue of $15 billion to $16 billion when analysts wanted about $17 billion, and earnings of 25 cents a share against about 43 cents expected.

Intel gave two reasons. First, a weak PC market. Memory chips and other parts are in short supply because AI data centers are absorbing them, which pushes up PC prices and hurts sales. The company said the PC slump will last at least through the first half of next year. Second, an accident at a factory in Israel will cost about $300 million in revenue this quarter. This fits with the news that memory makers like SK Hynix are earning record profits.

Amazon's weak results from Thursday added to the nerves. Other chip stocks fell too, with AMD down about 11% and Nvidia down about 4%. ServiceNow had already plunged 27% on Thursday, its worst day on record. Overseas, South Korea's Kospi dropped 3.5%, while Japan's Nikkei fell 2.1% after the Bank of Japan held rates steady.

The mood has changed fast. Just a few weeks ago the Nasdaq and S&P 500 were setting records. Now investors are asking tougher questions about which companies are earning real returns on their AI spending and which are only spending. October ended as the Nasdaq's worst month in more than a year.