The Nasdaq opened at its lowest level in more than two months on Friday as Amazon's spending plan and Intel's outlook raised fresh doubts about AI infrastructure costs. Investors moved into defensive stocks, leaving the Dow near flat while the Nasdaq headed for a nearly 5% monthly fall.
The Nasdaq opened at its lowest level in more than two months on Friday. Amazon's aggressive AI spending plan and Intel's cash burn warning intensified investor concerns about the rising cost of AI infrastructure and the timeline for returns.
The Nasdaq Composite dropped 592.2 points, or 2.26%, to 25,592.486 at the open. The S&P 500 fell 89.3 points, or 1.16%, to 7,631.07, while the Dow Jones Industrial Average rose 41.3 points, or 0.08%, to 52,383.9.
Amazon and Intel lead the declines
Amazon shares lost 5% after the company reported third-quarter earnings and revenue that fell short of Wall Street's expectations. It also posted negative free cash flow of $42.4 billion and maintained its 2026 capital expenditures forecast of $220 billion, according to CNBC.
Intel slid 26% after it issued a weak outlook for the current quarter and pointed to a slowdown in PCs. Sandisk fell 9% even though its fiscal first-quarter results beat estimates, and the company announced an eight-for-one forward stock split.
Chipmakers came under broader pressure. Advanced Micro Devices dropped 10%, while Nvidia and Broadcom fell 3% and 4%, respectively.
Money rotates into defensive areas
As investors left tech, consumer staples and healthcare gained. Procter & Gamble, Walmart and Coca-Cola each rose around 2%, which supported the Dow.
JPMorgan traders said in a Friday note, according to CNBC: "the Equity rotation is likely to continue today". The note added that broader indices will reflect tech's downside.
The AI trade was already under scrutiny. On Thursday, Alphabet shares posted their worst day on record after the company missed on third-quarter earnings and revenue.
Heading into the close of October, the Nasdaq Composite is heading for a nearly 5% fall. The S&P 500 is on track for a 0.4% decline, while the Dow is on pace to rise more than 2%.
Sources: Investing.com (Reuters), CNBC
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