October ends with a thud for Intel, Reddit, AI stalwarts

October concluded on a disappointing note for leading technology and AI companies. Intel and social media platform Reddit saw their stocks plunge by 29% and 13% respectively, while chipmaker SanDisk dropped 13% after a sharp decline in the broader technology sector. The decline followed a turbulent week for major tech firms, including Microsoft, Meta Platforms, Amazon, and Alphabet.

These "hyperscalers" have been responsible for over a third of all capital spending in the S&P 500 over the past year, and investors are growing concerned about their mounting debt and investment strategies.

The Nasdaq composite index experienced its largest monthly decline since June, plummeting 7.8% from its peak after ending the month down more than 3.5%. Tech stocks, which had been buoyed by positive sentiment, saw a broader pullback, as Treasuries rallied, leading to a negative impact on the overall market. Silver declined by 6%, wiping out 31% of its 2025 gains, while gold dropped by 3.5%, down 10% for the year.

The recent stock sell-off is primarily attributed to the temporary nature of the recent rally, rather than a significant leverage issue. Sahak Manuelian, managing director at Wedbush Securities, noted that the market's previous parabolic moves have resulted in a significant downturn, with many investors now withdrawing their investments and seeking alternative options. The situation has been described as a "very nasty downdraft" following the extreme swings in market prices.