U.S. Stocks Plummet Amid Disappointing Earnings Reports
In a striking turn of events, U.S. equities registered a notable decline today, with the Nasdaq experiencing its most substantial single-day percentage loss since June 5.
This downturn was exacerbated by underwhelming quarterly financial results from both Intel and Amazon, which intensified apprehensions surrounding the exorbitant expenditures being funneled into artificial intelligence ventures.
All three principal U.S. stock indices faced a significant decrease, with the Nasdaq descending by 2.9%. The tech-dominated index has now retreated 7.8% from its all-time closing high recorded on October 6.
The catalyst for the technology selloff can be traced to disappointing earnings disclosures from Intel and Amazon, revealed late Thursday. Although Amazon managed to reduce its losses as the day unfolded, Intel’s stock plummeted an alarming 28.6%.
Furthermore, semiconductor stocks also fell dramatically, with Nvidia dipping 4.2% and AMD tumbling by 10.9%.
The broader semiconductor index dropped by 7.2%, positioning itself for a potential monthly deficit exceeding 15%. Additionally, server manufacturers Dell and HP witnessed declines of 10.8% and 9.6%, respectively.
“This week has fundamentally revolved around the future of artificial intelligence, specifically contemplating whether substantial investments will yield positive returns and, if so, the timeline for such gains,” articulated Oliver Pursche, Senior Vice President at Wealthspire Advisors in New York.
“Firms that are meeting the exceedingly high expectations currently in place are thriving,” Pursche continued. “Conversely, those failing to meet benchmarks or executing poorly are facing harsh consequences.”
All three major stock indices witnessed a decline over the week, with the S&P 500 and Nasdaq recording monthly losses. In contrast, the Dow managed to conclude October on a positive note.
The Dow Jones Industrial Average fell by 572.25 points, equivalent to a 1.09% decrease, settling at 51,770.31. The S&P 500 lost 140.32 points, or 1.82%, to close at 7,580.07, while the Nasdaq Composite shed 747.73 points, or 2.86%, ending at 25,437.00.
The S&P 500 technology sector suffered its most significant monthly percentage loss since March 2025, while the communication services sector endured its largest monthly drop since April 2022.
The third-quarter earnings season has surpassed its midpoint, with 299 companies within the S&P 500 having reported their results.
Notably, 82% of these companies have outperformed analysts’ consensus forecasts, as reported by LSEG data.
Current projections anticipate a year-over-year earnings growth of 31.6% for the S&P 500 in the third quarter, according to LSEG.
Emblematic of resilience, oil titans Exxon Mobil and Chevron both exceeded profit expectations for the quarter, benefitting from soaring profit margins due to energy supply disruptions linked to the U.S.-Israeli conflict with Iran and the ongoing war in Ukraine. Their shares increased by 2.2% and 2.8%, respectively.
Conversely, Starbucks declined by 1.8% following the coffee chain’s forecast of an annual revenue decrease due to the divestiture of its operations in China.
Cryptocurrency firms, including Coinbase, Strategy, and Robinhood, dropped between 7.2% and 10.6% in light of reports indicating that hackers had absconded with $6.3 billion from Binance, the world’s largest cryptocurrency exchange.
On the New York Stock Exchange, declining stocks outnumbered advancing ones by a ratio of 1.8-to-1, registering 169 new highs and 377 new lows.
Meanwhile, on the Nasdaq, 1,196 stocks rose, while 3,622 faced declines, reflecting an imbalance favoring the latter at a ratio of 3.03-to-1.
The S&P 500 recorded 43 new 52-week highs juxtaposed with five new lows, while the Nasdaq Composite noted 70 new highs and 355 new lows.
Trading volume across U.S. exchanges reached 19.87 billion shares, contrasting with the 17.26 billion shares averaged over the past 20 trading days.
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