Tech Sell-Off Deepens as AI Spending Backlash Hits Alphabet, Amazon and Intel

The market mood that built all week broke into a full sell-off on Friday, October 30, as investors stopped asking whether artificial intelligence can be built and started asking whether it will pay. Google parent Alphabet fell 12.6% on Thursday, wiping out roughly $500 billion in market value after its third-quarter earnings and revenue missed expectations and it reported negative free cash flow of $9.07 billion. The Nasdaq Composite fell 1.38% on Thursday, while the S&P 500 slipped 0.30% and the Dow Jones Industrial Average eased 0.25%. By Friday morning, Nasdaq 100 futures were down about 1.9%, setting up another difficult session for technology shares.

The selling then spread from one disappointing report to a pattern. Amazon fell about 7% in after-hours trading after its third-quarter revenue and earnings also missed expectations, with negative free cash flow of $42.4 billion over the trailing twelve months even as it kept its 2026 capital spending forecast at about $220 billion. Intel plunged about 23% after issuing weak guidance and blaming a soft personal computer market, dragging chip stocks down with it: Advanced Micro Devices fell about 8%, Nvidia about 3% and Broadcom about 4% in early trading. The message from the market was unusually clear — heavy spending on data centres and computing infrastructure is no longer being rewarded on promise alone, and investors now want evidence that the returns will match the cheques.

Asia felt the shock first on Friday. South Korea’s Kospi fell more than 3% at the open, on course for a fall of nearly 16% in October, with SK Hynix down 6.36% and Samsung Electronics down 3.45%. Japan’s Nikkei 225 fell 2.12%, heading for a decline of about 5% for the month, as Advantest dropped 5.43%, SoftBank Group fell 4.66% and Tokyo Electron lost 3.93%. Hong Kong was a rare exception, with the Hang Seng rising 1.46% on energy and technology gains. China’s blue-chip CSI300, meanwhile, was headed for its largest monthly fall in a decade, after nearly four months of AI-related stocks sliding on fears that demand for chips and data-centre equipment could weaken.

Money ran for safety. Benchmark 10-year US Treasury yields fell by more than 7 basis points in Tokyo trading to 4.91%, taking the October fall to about 37 basis points — the largest one-month drop since December 2023 — while two-year yields dropped to 4.57%. The yen strengthened about 0.3% to 157.20 per dollar and the Swiss franc held near a one-month high. The Bank of Japan, which left rates on hold as expected, unveiled plans to sharply accelerate sales of its exchange-traded fund holdings next year, while signalling a rate rise could come as soon as December. Oil moved the other way: Brent rose 1.58% to $116.70 a barrel and US crude rose 1.49% to $103.52, after attacks on Saudi Arabian sites raised supply fears.

Why this matters goes beyond one bad week for a few famous names. October was already splitting in two — the Nasdaq was on track to lose 2.5% for the month even as the S&P 500 was poised to gain 0.9% and the Dow to advance 2.8% — and this sell-off sharpens that divide. What to watch next is whether the next earnings round restores faith in AI returns, whether bond yields keep falling, and whether Asia’s chip sell-off stabilises or spreads further. For readers trying to make sense of fast-moving markets, our forex section explains how yields and safe-haven flows move currencies, and the forex tools page has calculators for sizing risk before any trade. (Not financial advice.)