Wall Street suffered a sharp technology sell-off on Friday as concerns over escalating artificial intelligence investment and disappointing earnings forecasts sent the Nasdaq Composite tumbling, while stronger profits from US oil majors provided support for energy stocks.
The Nasdaq Composite fell 2.26% to 25,592.49 shortly after the opening bell, extending Thursday’s decline of more than 1.3% as investors reassessed valuations across the technology sector.
The S&P 500 dropped 1.16% to 7,631.07, while the Dow Jones Industrial Average edged 0.08% higher to 52,383.90, highlighting the contrasting performance of technology and traditional industrial companies.
Amazon shares fell as much as 5.9% after the online retail and cloud computing giant revealed third-quarter capital expenditure of $77.3 billion, exceeding market expectations and intensifying concerns about the cost of expanding AI infrastructure.
Investors are increasingly questioning whether the substantial spending commitments being made by major technology companies will deliver sufficient financial returns within anticipated timeframes.
Intel was among the session’s worst performers, plunging more than 26% to $67.38 in early trading, following disappointing fourth-quarter revenue and earnings guidance.
The chipmaker warned of increased spending as it seeks to expand manufacturing capacity despite continued weakness in the personal computer market.
Shares were reported down as much as 29.4% during Friday’s session, putting Intel on course for one of its steepest daily declines in recent years.
The sharp reaction overshadowed an otherwise stronger third-quarter performance and added to concerns about cash consumption across the semiconductor industry.
Alphabet shares also weakened, falling approximately 1% to $280.96, extending pressure on technology valuations following a disappointing market reaction to the Google parent’s recent earnings.
Investors remain focused on the financial implications of major AI infrastructure programmes, particularly where capital expenditure is rising faster than near-term revenue or profit growth.
The technology sell-off coincided with renewed withdrawals from US equity investment funds, suggesting that some investors are reducing their exposure to American stocks.
According to LSEG Lipper data cited by Reuters, US equity funds experienced net outflows of $6.65 billion during the week ended 28 October, marking their first weekly withdrawals in three weeks.
The outflows followed heightened scrutiny of technology earnings and concerns about the sustainability of the AI investment boom.
Energy stocks provided a notable contrast, with ExxonMobil and Chevron advancing following stronger-than-expected quarterly earnings.
ExxonMobil shares gained 1.94% to $186.85 after reporting adjusted earnings of $17.5 billion, exceeding analyst expectations of $16.6 billion.
The oil major benefited from stronger refining margins, which improved profitability across its fuel manufacturing operations.
Chevron advanced 1.37% to $234.62 after announcing adjusted earnings of $10.4 billion, supported by strong refining performance.
The company reported record crude throughput across its US refineries, which operated at approximately 98% utilisation.
The results reinforced the substantial earnings benefits being enjoyed by major energy producers during a period of elevated oil prices and disruption to global energy supplies.
Cryptocurrency markets also came under heavy selling pressure following reports of a $6.3 billion security breach at Binance, one of the world’s largest digital asset exchanges.
Blockchain investigators have linked the reported attack to North Korean hackers, although the full circumstances and final recoverable losses remain under investigation.
Binance temporarily suspended withdrawals and pledged to cover customer losses, while efforts continued to freeze and trace the affected digital assets.
Reports indicated that approximately half the stolen assets had been frozen through coordination involving cryptocurrency infrastructure providers and stablecoin issuers.
Bitcoin fell 4.04% to approximately $76,963 by 9.33am Eastern Time, while Ethereum declined 4.67% and Solana dropped 5.15%.
The cryptocurrency sell-off added to wider concerns about investor risk appetite, particularly as technology shares experienced substantial volatility.
In London, the FTSE 100 proved relatively resilient despite the weakness on Wall Street, maintaining modest gains during Friday afternoon trading.
At 2.07pm GMT, the FTSE 100 was up 0.18% at 10,741.03, supported by selected heavyweight companies, including healthcare and energy stocks.
However, the domestically focused FTSE 250 declined 0.80% to 24,476.89, indicating a weaker performance among mid-cap companies.
The FTSE 100 remained on course for its first monthly advance in three months, despite a week dominated by major corporate earnings, central bank decisions and continued geopolitical uncertainty.
For investors, Friday’s trading highlighted a widening divide between sectors benefiting from elevated energy prices and technology companies facing growing scrutiny over AI spending.
While artificial intelligence investment continues to drive substantial demand for computing infrastructure, markets are increasingly focused on the timing of financial returns and the sustainability of capital expenditure.
Attention will now turn to further technology earnings, the outlook for AI infrastructure investment and developments in cryptocurrency markets, as investors assess whether the sharp sell-off represents a temporary reassessment of valuations or the beginning of a broader adjustment across US technology stocks.
