Nasdaq ends October down 5.3% as Intel plunges 28% in tech sell-off

US stocks closed October 2026 with a sharp sell-off led by technology shares. At the close of trading in New York on Friday, October 30, 2026, the Nasdaq Composite fell about 2.9%, or nearly 748 points, to around 25,437; the S&P 500 fell 1.82% to 7,580.07; and the Dow Jones Industrial Average fell 572.25 points, or 1.09%, to 51,770.31. Disappointing quarterly results from Amazon and Intel revived worries about how much the biggest technology companies are spending on artificial intelligence, and chipmaker shares fell hardest. For the month, the Nasdaq lost about 5.3%, its worst monthly performance since March 2025.

For most of the past two years, US markets have been driven by enthusiasm about artificial intelligence, with chipmakers and large technology firms leading gains. Friday's fall shows that investors are now asking harder questions about whether the huge sums being spent on AI data centres and chips will pay off. When results from companies such as Amazon and Intel disappoint, the reaction is now fast and broad: on Friday it spread from those two companies to almost every major chip stock.

The size of Intel's one-day drop, close to 29%, is unusual for a company of its size. It reflects how much investors had priced in a recovery, and how quickly that view can change when a company's outlook falls short. The 7.2% fall in the semiconductor index shows that the selling was not limited to one company; investors cut their holdings across the sector.

The VIX index measures how much movement investors expect in the S&P 500 over the next month, based on options prices. A level around 20 is often read as a sign of rising nervousness, and the spike to nearly 24 during Friday's session showed how quickly worry grew before it eased slightly by the close.

The timing also matters. The sell-off came on the last trading Friday before the US midterm elections, scheduled for Tuesday, November 3, 2026, when investors often reduce risk ahead of uncertain political outcomes.

Short-term: Indian markets reopen on Monday, November 2, after Friday's US close, and the moves in US technology and chip shares are likely to be watched closely by traders in Indian IT stocks, which earn a large share of their revenue from US clients. Indian investors who hold US shares directly or through international mutual funds will see the fall reflected in their portfolio values.

Long-term: If doubts about the return on AI spending continue, technology companies may slow their investment plans, which would affect chipmakers, data-centre builders and the IT services firms that help businesses adopt AI. If later results reassure investors, the October fall may be remembered as a correction within a longer rally. Neither outcome can be known yet.

Who is affected: Investors in US technology and semiconductor shares, including Indian investors with overseas exposure through funds or direct investment; Indian IT companies whose clients are US technology firms; and global chip suppliers.

This report describes market movements and does not recommend buying or selling any security.

Questions and Answers