US stocks fall sharply on October 30: Nasdaq drops 2.9% as AI spending fears grow, Intel plunges nearly 30%

US stocks closed sharply lower on Friday, October 30, as the cost of the AI infrastructure buildout — and the timing of its returns — dominated trading. The Nasdaq Composite fell 747.73 points, or 2.86%, to 25,437.00; the Dow Jones Industrial Average fell 572.25 points, or 1.09%, to 51,770.31; and the S&P 500 fell 140.32 points, or 1.82%, to 7,580.07.

The trigger: Amazon and Intel earnings

Amazon reported third-quarter revenue of $201.94 billion, up 12% year on year but below the $202.31 billion consensus, and earnings per share of $1.89, below the $1.96 expected. Its cloud business, Amazon Web Services, was the only segment to beat expectations, with sales of $46 billion, up 39.3% — its fastest growth in about five years — while advertising and retail revenue came in below forecasts, and the midpoint of its fourth-quarter revenue guidance, $243.5 billion, was also below the $244.51 billion consensus. What weighed most on sentiment was spending: Amazon's free cash flow over the trailing 12 months was a negative $42.4 billion, and chief executive Andy Jassy said the company expects $220 billion of capital expenditure in 2026, most of it on AI data centres. Reuters reported in premarket trading that Amazon and Intel together risked losing about $300 billion in combined market value if their early losses held.

Intel plunges 28.6%; big tech broadly lower

Intel was one of the day's steepest fallers, closing down 28.58% — near its worst session since 1974, according to the Associated Press. Intel warned it would burn cash this year, citing a weak personal-computer market, manufacturing bottlenecks and heavy spending to expand production; revenue at its client computing group, which makes PC chips, fell 5% in the third quarter to $8.1 billion. Other large technology stocks also fell: Nvidia dropped 4.22%, Microsoft 1.55%, Alphabet 1.40% and Meta 1.53%, while TSMC fell 5.95%, Broadcom 5.48% and AMD 10.88%.

What the market is worried about

Reuters cited market participants pointing to a single question behind the recent turbulence: big technology companies have poured hundreds of billions of dollars into AI infrastructure, and investors are asking when that spending will translate into matching returns. Amazon, Google, Microsoft and Meta together spent more than $200 billion in the third quarter alone, and several companies have tapped the bond market to fund their AI investments, raising concern that higher borrowing costs could make the spending harder to justify. The Nasdaq was set to end October lower after two consecutive monthly gains, while the S&P 500 and the Dow remained on track for monthly gains. This article reports only published figures and market reaction, and makes no forecast about future market moves.