U.S. Stocks Dive on AI Spending Fears

U.S. stocks dropped sharply Friday as disappointing quarterly results from Amazon and Intel intensified the tech selloff of the past two days. The Nasdaq Composite dropped almost 3%, while the S&P 500 dropped almost 2% and the Dow Jones Industrial Average dropped 1%.

The tech-heavy Nasdaq has dropped more than 5% in October, marking its worst month since March 2025.

Amazon Web Services, Amazon’s cloud computing business, reported accelerating revenue growth of 39%, but the rest of Amazon’s business segments slowed in growth. Amazon said it expected its capital expenditures in 2026 to reach $220 billion as the data center buildout intensifies, and its free cash flow sank to negative $42.4 billion for the 12 months ending Sept. 30. The company’s stock fell 1.4% on Friday.

Intel’s stock sank more than 28% after its earnings report on Thursday. Intel forecast a slowdown in demand for PCs as prices rose due to a memory chip crunch from AI demand.

Heavy spending on AI infrastructure isn’t unique to Amazon, with Microsoft, Alphabet, and Meta all signalling continued capital expenditure on data centers, chips, and servers in their most recent earnings reports.