US Stock Market Live Updates: Nasdaq sinks 2%, S&P 1% as Amazon, Intel add to AI spending woes
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Dow Jones | Nasdaq | Stock Market Live: Nasdaq drops to a near three-month low as Amazon's rising AI expenditure and Intel's cash burn warning intensify concerns over infrastructure costs and uncertain returns. Chip stocks lead the selloff, while Alphabet extends losses and defensive sectors gain as investors move towards safer assets.
US stocks slide on Friday, with the Nasdaq falling more than 2% to its lowest level in nearly three months as concerns over Big Tech's AI spending weigh on technology shares. Amazon and Intel deepen worries about rising infrastructure costs, while a broad chip selloff adds to market pressure.
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Morgan Stanley analyst says investors should look past the spending in Amazon.
“Growth was disappointing vs expectations … but this seems mostly an expectations miss as $3.8bn added [quarter over quarter] was the second highest … added in AWS history and it does not change AWS’s potential for further acceleration and its long-term opportunity,” Morgan Stanley analyst Brian Nowak said Friday in a note to clients.
Hackers have reportedly stolen $6.3 billion from cryptocurrency exchange Binance in what is being described as the largest heist in the history of the digital asset industry. The incident adds to a growing list of cybersecurity breaches targeting financial institutions and platforms.
Binance, the world's largest cryptocurrency trading platform, temporarily suspended withdrawals following the attack and assured users that it would compensate for all losses. In a statement posted on X, the company said approximately $3 billion worth of assets had been frozen across blockchain networks. Co-founder Yi He separately indicated that withdrawal services were expected to resume by Sunday.
Although the exact circumstances surrounding the security breach remain unclear, the incident has intensified concerns over the growing threat of cyberattacks in an increasingly AI-driven environment. Recent attacks have also affected prediction market platform Polymarket, South Korean financial institutions Mirae Asset Global Investments and Daishin Securities, and Japan-based currency trading platform GMO Internet Group.
US Treasuries rallied on Friday, driving benchmark 10-year yields down to 4.945% and positioning them for a 35 basis point drop in October—their largest monthly decline since December 2023. A sharp downturn in tech shares, triggered by Amazon's surging capital expenditure plans and Intel's severe cash burn warning, fueled anxieties over heavy artificial intelligence spending and spurred investors toward safe-haven assets.
The slide in yields marks a shift in market sentiment, pausing a previous selloff that had pushed borrowing costs to multi-decade highs amid energy price volatility and expanding government debt. Despite underlying economic strength—highlighted by accelerating consumer spending and resilient third-quarter GDP growth—investors are recalibrating rate expectations as tech sector drag and semiconductor weakness raise questions about broader economic momentum.
The main US aluminum trade group is urging Canada and Mexico to match Washington's tariffs on metal imported from outside North America, aiming to build a unified regional market. Aluminum Association CEO Chuck Johnson stressed that matching border tariffs across the three nations is essential for equal trade within North America, particularly as the US relies on foreign suppliers, mainly Canada, for about 60% of its primary aluminum needs.
While declining to take a stance on whether President Donald Trump's current 50% tariff rate should be adjusted, the association is focusing on making the existing framework workable for the industry. The group is advocating for stronger rules of origin, enhanced monitoring of regional imports, and a simpler tariff structure to prevent market arbitrage and counter non-market competition from countries like China.
America's top technology companies are facing mounting investor scrutiny as slowing growth in their core advertising and e-commerce businesses collides with a collective $750 billion in artificial intelligence capital spending. Quarterly results from Alphabet and Amazon revealed deceleration in legacy cash-cow units, while aggressive infrastructure spending and heavy debt issuance sparked a broad tech selloff. Alphabet's search advertising recorded its slowest growth in five quarters, and Amazon's ad unit logged its weakest expansion since first being broken out in 2022.
Market anxieties are further compounded by fears that new generative tools are cannibalizing core high-margin products. Alphabet acknowledged lower monetization rates for query results using its AI Mode, while Meta warned that its new AI app is extraordinarily compute-intensive. Although cloud divisions at Google, Amazon, and Microsoft showed strong gains, the high capital requirements of the AI transition continue to weigh on stock performance and test investor patience across the sector.
Leading data center developers, including Blackstone Inc.’s QTS, Vantage Data Centers, Compass Datacenters, and Digital Realty, have pledged to improve transparency regarding their local environmental impact and corporate ownership. Joining as founding members of the industry group Infrastructure for America, the firms committed to publishing disclosures on power and water demands, eliminating evaporative cooling methods in favor of closed-loop systems, and refraining from requiring local governments to sign non-disclosure agreements.
The nonbinding initiative comes as organized community opposition blocked or delayed at least 45 US data center projects in the second quarter, drawing heightened scrutiny from lawmakers over energy costs and tax incentives. To alleviate public backlash and grid strain, the developers also agreed to fund their own infrastructure upgrades, participate in peak-demand power reduction programs, and support utility rate structures that protect everyday consumers from rising electricity bills.
Gold dropped as much as 3.2% to $3,891.67 an ounce, reaching its lowest level in a year and placing the metal on track for its worst October performance since 2008. The selloff was driven by rising Brent crude prices due to Middle East tensions, which intensified inflationary pressures and prompted traders to sell bullion to cover equity losses during an ongoing global technology stock rout.
Expectations of a potential Federal Reserve interest rate hike in December added further pressure on non-yielding precious metals. Silver also tumbled nearly 5% to $49.64 an ounce, pushing its monthly decline to roughly 18% as technical fund selling and long liquidations drove prices lower alongside declines in platinum and palladium.
US stocks extended their losses on Friday, with the Nasdaq Composite falling 2.37% to 25,564.84. The S&P 500 declined 1.45% to 7,608.17, while the Dow Jones Industrial Average shed 0.59% to 52,032.31, as concerns over rising AI spending and mounting costs weighed on investor sentiment.
The US dollar's recent surge is expected to persist despite potential political gridlock from the upcoming midterm elections, supported by high interest rates, strong relative economic growth, and substantial capital inflows. Even if polls prove accurate and Democrats capture control of Congress to create a divided government, analysts note that market dynamics are primarily driven by underlying economic fundamentals and a potential veto by President Donald Trump on proposed artificial intelligence regulations.
While near-term risks include tech sector volatility and concerns over slowing capital expenditure on AI, long-term confidence in the currency remains intact. Expectations that the Federal Reserve will resume interest rate increases following the election, coupled with lingering geopolitical pressures on global energy markets, continue to underpin bullish market positioning and reinforce the greenback's broader strength.
The tech-heavy Nasdaq 100 is on track to shed more than $2 trillion in market value this October, falling over 5.8% as quarterly earnings heighten investor skepticism over massive artificial intelligence expenditures. Concerns over rising capital outlays were amplified by record single-day stock drops for Alphabet following search revenue weakness and Meta's plans for a record $97.5 billion fundraise, alongside fears that elevated borrowing costs will make debt-funded expansion increasingly expensive.
Despite the broader market selloff, revenue across major tech firms remains robust, with strong cloud performance from Microsoft and Amazon Web Services demonstrating ongoing demand for data infrastructure. However, with J.P. Morgan forecasting global AI capital expenditure to reach $900 billion in 2026 alone, the sector's growing reliance on bond issuances and debt financing is sparking fresh caution across both equity and credit markets.
Richmond Federal Reserve President Tom Barkin stated that the direction of US monetary policy remains clear given high inflation, solid demand, and low unemployment, though the pace of future interest rate increases remains open to debate. Speaking on SiriusXM, Barkin noted that a gradual approach to rate hikes allows policymakers time to assess incoming data as businesses face rising cost pressures across energy, labor, and technology investments.
While the Fed held borrowing costs steady this week, new policy language and stronger-than-expected economic data have led investors to anticipate a quarter-point rate increase at the central bank's upcoming December meeting. Barkin emphasized that persistent price pressures and corporate willingness to pass along higher costs could force further policy action to prevent inflation expectations from taking root.
The cost of insuring Intel Corp.'s debt against default surged to an all-time high on Friday after the chipmaker warned it expects to burn cash this year due to a weak personal computer market.
Five-year credit default swaps on Intel debt widened by 17.5 basis points to a record 124.75 basis points, according to Markit data. The surge puts the credit default swaps on track to log their largest single-day jump since October 2022.
Treasury yields slipped even as crude oil prices rebounded, diverging from the typical pattern where higher energy costs fuel inflation expectations and lift yields. Brent crude jumped 2.4% to $113.45 a barrel, remaining near its upper bound since the conflict with Iran intensified energy costs and broader inflationary pressures.
Strategy fell 8.4% despite reporting stronger-than-expected quarterly profits, as investor sentiment was further weighed down by the announcement that its chief financial officer will resign next week for personal reasons.
Coinbase Global dropped 13.3% despite delivering quarterly results that topped Wall Street expectations.
Cryptocurrency stocks plunged as a major security breach at Binance impacted over $6 billion worth of crypto assets. A US blockchain intelligence firm attributed the attack to a North Korean unit, pushing the price of Bitcoin down toward $77,000 from its earlier peak of over $86,000 this month.
Intel tumbled 28.9% and is flirting with its worst day since 1974, even though the chipmaker reported a stronger profit for the latest quarter than analysts expected. It gave a forecast for profit in the final three months of this year that fell far short of analysts’ expectations. CEO Lip-Bu Tan said the personal-computer industry continues to feel pressure, which hurts demand for Intel’s CPUs.
Amazon fell 2% after reporting a weaker profit for the summer than analysts expected. Potentially more concerning for investors was Amazon’s reporting that it burned through $42.4 billion of cash over the prior 12 months, according to a measure called free cash flow. It spent $94.8 billion on property and equipment, primarily through investments in artificial-intelligence technology.
The Nasdaq opened at its lowest level in more than two months on Friday, after Amazon's aggressive AI spending plan and Intel's cash burn warning intensified investor concerns about escalating costs of AI infrastructure buildout and the return timeline.
Read more: Nasdaq plunges 2.3% to over two-month low
Copper prices fell on Friday and were set to log their first monthly decline since June, pressured by a broader retreat in risk appetite following concerns over massive artificial intelligence spending. Benchmark three-month copper on the London Metal Exchange dropped 0.9% to $14,227 a metric ton, setting the metal up for a 1% fall in October as tech sector anxieties and rising oil prices prompted investors to move toward safer assets like bonds.
Despite the monthly decline, near-term supply tightness continues to support prices, with elevated cash premiums and China's Yangshan copper premium remaining near a 13-year high. Supply pressures were further underscored by Rio Tinto pausing underground operations at its Oyu Tolgoi mine in Mongolia due to seismic activity and border transit delays, while tin also slipped to a six-month low on similar AI spending concerns.
- Ipek Ozkardeskaya, senior analyst at Swissquote Bank
Intel saw its stock plunge more than 25% following a warning from the chipmaker that it expects to burn cash this year. The company pointed to a sluggish personal computer market, ongoing manufacturing bottlenecks, and substantial investments required to scale up its production capacity as key drivers behind the financial strain.
Alphabet slipped 0.6%, adding to its losses following a record selloff in the previous session. The decline came after the Google parent company posted disappointing search-advertising results alongside a sharp rise in cash outflows.
Shares of Amazon.com dropped 6.3% in premarket trading following the company's report of a significant cash outflow during the third quarter. The decline was further fueled by management signaling a plan to increase capital expenditure next year, piling onto its already high spending levels.
Despite Friday's decline, the S&P 500 and Nasdaq remained on course for weekly gains, supported by a brief recovery in AI-linked stocks earlier in the week following Anthropic's US IPO filing. However, the Nasdaq was headed for its first monthly decline in three months. Investors also assessed expectations of more than 50 basis points of Fed rate increases by mid-2027. Elsewhere, Chevron and Exxon Mobil gained 1.5% each after beating profit estimates, while Reddit fell 19.5% following a weak user-growth outlook.
The combined spending of Amazon, Alphabet, Microsoft and Meta exceeded $200 billion in the third quarter, according to Ipek Ozkardeskaya, senior analyst at Swissquote Bank. She warned that higher financing costs could absorb a larger share of the cash generated by these companies, leaving less available for expansion and debt repayment. Several companies have turned to bond markets to finance their AI investments, adding to concerns about the sustainability of such spending as borrowing costs rise.
Alphabet slipped another 0.6%, extending its losses following a record selloff in the previous session. Investors remained concerned about disappointing search advertising results and rising cash outflows at the Google parent. The broader semiconductor sector also faced selling pressure, with Nvidia falling 3% and AMD declining 8.7%. Meta also reported cash burn in the September quarter, while Microsoft stood out with a stronger-than-expected cash flow despite raising $25 billion through a debt sale.
Amazon shares dropped 6.3% in premarket trading after the company reported significant cash outflows in the September quarter and signalled another increase in capital expenditure next year. Intel plunged more than 25% after warning that it expects to burn cash this year, citing weak PC demand, manufacturing bottlenecks and heavy investment in expanding production. Together, the two companies risked losing around $300 billion in market value if the declines held.
US stock futures came under sharp selling pressure on Friday, with Nasdaq futures falling 2.41%, as investors reassessed the cost of artificial intelligence investments. Amazon's plans for higher capital expenditure and Intel's warning of cash burn intensified concerns over the scale of spending required to build AI infrastructure and how quickly companies could generate returns. Dow futures rose 0.17%, while S&P 500 futures declined 1.03%.