Nasdaq 100 Falls 3% as Earnings Stoke AI Reckoning: Markets Wrap

The Nasdaq 100 experienced a 3% decline as earnings reports raised concerns about artificial intelligence investments. Technology stocks and cryptocurrencies suffered heavy selling, leading to increased risk aversion on Wall Street. Intel's outlook missed estimates, causing its stock to drop 28%. Amazon.com Inc. followed suit amid heightened capital expenditure.

The S&P 500 hovered near a key technical level, while Bitcoin's value fell to around $77,000 after a significant hack was disclosed, reigniting worries about the security of customer assets. Oil prices rose due to concerns about potential U.S. strikes against Iran. Defensive sectors such as staples and utilities saw a rise, while Treasuries showed volatility but were expected to have their best month since February 2025.

The slowdown in America's technology giants' core businesses, driven by the AI spending of over $750 billion, raised doubts about the durability of AI demand and the potential returns. This development has led to the loss of more than $1.2 trillion in market capitalization in October. Matt Maley of Miller Tabak noted that the "rotation" in the US stock market that has supported its growth could easily disappear if the major averages start to drop more significantly.

UBS Chief Investment Office's Ulrike Hoffmann-Burchardi advised that while AI demand remains strong, investors should consider building a resilient portfolio with exposure to other sectors.