Nasdaq 100 Sinks 4%, Gets Close to Correction Zone: Markets Wrap
(Bloomberg) — Wall Street got a reality check as a bruising selloff in technology shares fueled concern the artificial-intelligence frenzy that has powered the equity bull market might be overblown.
Disappointing tech results drove the Nasdaq 100 down over 4%, with the gauge approaching a technical correction. Intel Corp. slid 31% — the most in over four decades — as its outlook missed estimates. Amazon.com Inc. fell 2.3% on greater capital spending. Blackstone said Anthropic PBC may not receive an investment-grade rating immediately after its IPO, according to the Financial Times. The S&P 500 sank 2.5%.
Bitcoin slid below $77,000 as Binance revealed a record hack that renewed questions about the security of customer assets. Oil rose on worries the US may resume strikes against Iran. In a flight to safety, Treasuries headed toward their best month since February 2025.
The core businesses of America’s technology giants — the advertising, consumer and retail machines propping up a collective $750 billion in AI spending this year — are starting to show signs of slowing. In some cases, they’re being cannibalized by the very technology the firms are betting the house on.
That has sharpened scrutiny of both the durability of AI demand and whether the huge sums being poured into the technology will generate sufficient returns. The Nasdaq 100 has wiped out more than $1.2 trillion in market capitalization in October.
The spreading weakness in the core businesses of tech giants means the big payoff that everyone has been saying will come eventually is getting pushed even further down the road, according to Matt Maley at Miller Tabak.
“It raises the question as to whether the payout will be as big as they have been promising,” he added.
“We’re moving out of the hopes and dreams phase of the AI trade and into the ‘show me’ phase,” said Joe Tigay at Equity Armor Investments. “Full order books are great, but investors want to see who can actually deliver, turn that demand into earnings and generate cash that’s where the divide between winners and losers gets wider.”
While AI demand remains robust, there’s a rising risk of mid-cycle capital expenditures indigestion, according to Ulrike Hoffmann-Burchardi at UBS Chief Investment Office.
“We continue to see scope for equity gains overall and believe investors should focus on building a resilient portfolio that includes exposure beyond tech,” she said.
Looking ahead, Maley noted that the biggest problem investors will face is that the rotation that has held up the US stock market could easily disappear.
“If the major averages begin to drop in a more compelling manner, it is very likely that investors will stop rotating into other sectors and start rotating into cash,” he said. “This is especially true since they have been hearing about a bubble for over a year now.”
Corporate Highlights:
Amazon.com Inc. has set up supplier financing arrangements to borrow as much as $80 billion against the value of hardware it buys, the company’s latest move to preserve financial flexibility as it spends hundreds of billions on artificial intelligence infrastructure. ExxonMobil Holdings Corp. and Chevron Corp. beat profit expectations as conflicts in the Persian Gulf and Russia roiled energy markets, driving refining results to record highs. Starbucks Corp. Chief Executive Officer Brian Niccol said building a multi-brand company is a possibility, two weeks after the chain shut down rumors that it was exploring a takeover of Chipotle Mexican Grill Inc. Reddit Inc. is planning to limit access to its online forums in a bid to get users to register for accounts and deepen engagement, igniting investors’ concerns that the move will instead weigh on traffic while the company is already dealing with a dropoff in active US users. Rivian Automotive Inc. reported a smaller-than-expected loss and early momentum for its new R2 SUV, a positive sign for a model that’s critical to the electric vehicle maker’s profitability. Some of the main moves in markets:
Stocks
The S&P 500 fell 2.5% as of 2:39 p.m. New York time The Nasdaq 100 fell 4.4% The Dow Jones Industrial Average fell 1.4% The MSCI World Index fell 2% Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro was little changed at $1.1170 The British pound rose 0.1% to $1.3396 The Japanese yen rose 0.3% to 157.27 per dollar Cryptocurrencies
Bitcoin fell 2.8% to $76,608.34 Ether fell 1.5% to $2,223.32 Bonds
The yield on 10-year Treasuries declined two basis points to 4.92% Germany’s 10-year yield declined three basis points to 3.32% Britain’s 10-year yield declined one basis point to 5.28% Commodities
West Texas Intermediate crude rose 1.8% to $103.87 a barrel Spot gold fell 3.5% to $3,881.77 an ounce ©2026 Bloomberg L.P.
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