Wall Street closed October with a thud on Friday, as a fresh test of this year’s technology rally sent the Nasdaq composite to its biggest single-day decline since June and rounded off a bruising month for the stocks at the centre of the artificial intelligence boom.
Chipmaker Intel and social media firm Reddit each fell 29% on Friday, while Sandisk, a chipmaker that has been one of the great beneficiaries of the AI capital-spending boom, dropped 13%. The falls capped a week in which the market’s enthusiasm for AI-related shares gave way to doubt about how much the enormous sums being invested will return, and how soon.
The big technology firms at the heart of the AI buildout had already endured a difficult week. Microsoft, Meta Platforms, Amazon and Google parent Alphabet each fell a further 1% to 2% on Friday. Together, those four so-called hyperscalers have accounted for more than a third of all capital spending by current S&P 500 companies over the past 12 months, according to Capital Economics, which expects their share to rise further — a prospect investors are struggling with.
“Now that the combined capital spending boom at the hyperscalers is becoming partly dependent on external financing, investors are becoming more nervous about the sums they are collectively investing and how they are doing it,” said John Higgins, a markets economist at Capital Economics.
The Nasdaq 100 index of large non-financial stocks fell 3.5% on Friday, putting it on the brink of a correction — defined as a 10% fall from its recent high. The broader Nasdaq composite is now down 7.8% from its closing high, after its worst month since March 2025 wiped out a chunk of this year’s AI-fuelled gains.
The damage went well beyond technology shares. As investors pulled back from risk, government bonds rallied, while silver dropped 6% — leaving it down 31% for the year — and gold fell 3.5%, putting it down 10% for 2026. Oil prices rose 2%, adding to concern about an American economy that many investors see as dependent on the AI buildout for momentum. Financial stocks were hit hard, with Goldman Sachs down 4% and Jefferies off 6%, and Bitcoin fell 3% in the wake of the theft of more than $6 billion from the Binance exchange.
Some market participants urged calm, arguing that the selloff reflects the scale of the preceding rally rather than a deeper dislocation. “I don’t think it’s a particularly troublesome leverage issue that we’re dealing with. We’ve had such a huge move up in the whole complex,” said Sahak Manuelian, managing director for global equities sales and trading at Wedbush Securities. “When you’ve had the parabolic-like moves, it makes for a very nasty downdraft,” he added. “And I think that’s what we’re seeing. And then you have people that are starting to pull money out and going to other areas.”
Others framed the moment as a judgement on the AI trade itself. “Investors are voting all of a sudden and all together on who will monetize the investment and who won’t,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. Whether a new trading month brings a fresh start, after a day in which many investors headed for safety rather than waiting to see what happens over the weekend, is now the question facing the market.
Note on sourcing: the market figures in this article are Friday’s closing levels as reported by Reuters; the company moves described are single-day falls on Friday, not monthly totals.
Sources: Reuters, “October ends with a thud for Intel, Reddit, AI stalwarts”, https://www.reuters.com/legal/legalindustry/october-ends-with-thud-intel-reddit-ai-stalwarts-2026-10-30/
