Big Tech Breaks the Week, but Most Stocks Rise

Big Tech's earnings turned the week: Alphabet had its worst day on record, and Intel its worst since 1974

The stock market rose for three days this week and fell on the last two, and the turn came as the largest technology companies reported their quarterly results.

Through Wednesday the S&P 500 was up three days in a row: +0.70% Monday, +0.60% Tuesday and +0.28% Wednesday. Alphabet reported after Wednesday's close. On Thursday its stock fell 12.64% to $283.82, its worst day on record, and the S&P 500 slipped 0.31% even though 406 of its 503 stocks rose that day. Intel and Amazon reported Thursday evening. On Friday Intel fell 28.58% to $65.76 and the S&P 500 lost 1.82%, its worst day since June 5.

Alphabet's week

• Thursday: -12.64%, its worst day on record
• The week: -12.61%, its worst week since August 2011
• October: -18.67%, its worst month since it went public in 2004

Yahoo Finance calculated that Alphabet lost $468 billion in market value this week, "more than SpaceX, Intel and Nvidia combined," and about $758 billion over October. CNBC pointed to Google's negative free cash flow of $9.1 billion as one reason the stock fell so hard on Thursday. Meta Platforms, whose report also disappointed, lost 4.30% for the week.

S&P 500 companies are beating earnings estimates by only 1.4% on average this season, against a five-year average of 7.5%. FactSet senior earnings analyst John Butters attributed that almost entirely to Meta Platforms' and Alphabet's disappointing reports.

Intel's worst day since 1974

Intel's fall Friday came after a weak fourth-quarter forecast (story below). Only one day in Intel's history was worse, according to Yahoo Finance's calculations: July 5, 1974, when the stock fell nearly 30%.

What it could mean

When the market's largest companies disappoint, the indexes they dominate can fall even while most stocks hold up, as happened this week. If the selling stays confined to a few giants, money may keep rotating into other parts of the market; if doubts about AI spending spread, the pressure could widen to the companies that supply it.

Was this week a reset of expectations for Big Tech, or the start of a longer reckoning over AI spending?

Anthropic filed to go public Monday; by Friday, a report on its debt rating added a new question

Anthropic, the AI company behind Claude, filed its public registration statement (Form S-1) with the SEC on Monday for its proposed initial public offering. It plans to list on the Nasdaq under the ticker ANT.

The filing showed revenue of $16.29 billion for the six months ended in June, and a net loss for the first half of the year of $80 billion, alongside hundreds of billions of dollars' worth of compute commitments. The offering is expected in the coming weeks.

The filing lifted the AI trade on Monday. The S&P 500 rose 0.70%, the Nasdaq 0.82% and the VanEck Semiconductor ETF (SMH) 2.74%.

The debt-rating report

On Friday, the Financial Times reported that Blackstone told investors that debt for Anthropic, which is being structured as a public benefit corporation, may get a "high" junk rating, a change from its previous guidance. The report cited sources; Anthropic and Blackstone did not confirm it publicly.

The questions around it

Daniel Newman, CEO of Futurum Group, told CNBC in an interview on Friday:

"Everybody's still full steam ahead on AI, but all the things around it took an interesting turn this week."

David Hsu, a professor at the University of Pennsylvania's Wharton School, said in an interview quoted by CNBC: "It's a great technology, seems to do things that we never would have imagined, but how does that then translate into a viable business?"

What it could mean

A well-received Anthropic listing could renew confidence in AI businesses and in the chip and cloud companies that sell to them. A rough debut, or a lower credit rating that raises its borrowing costs, could instead feed the doubts about how AI spending gets paid for that hit tech stocks late this week.

Will investors judge Anthropic on its revenue growth or on its losses?

The Fed held rates at 3.75% to 4%, with two officials voting for a hike

The Federal Reserve kept its benchmark rate in a range of 3.75% to 4% on Wednesday. The vote was 10-2, and both dissenters wanted a rate increase.

On the midterm elections, six days away, Fed Chair Kevin Warsh said at his press conference:

"So politics played no role in the decision."

The S&P 500 rose 0.28% Wednesday, its third straight gain. The 10-year Treasury yield closed at about 5.05% after the decision, then eased; it ended the week at about 4.93%, its fourth straight weekly decline.

The data that followed

On Thursday, the first estimate of third-quarter GDP showed the economy growing at a 3.4% rate, and the PCE inflation measure showed prices up 3.6% in September from a year earlier.

What markets expect

Markets still lean toward a rate hike at the Fed's next meeting, on December 8-9, but the odds moved during the week: about 83% on Thursday by CME data cited by CNBC, and about 73% on Friday by Barchart's count.

Elsewhere, the Bank of Japan held its rate at 1.25%, and the European Central Bank also held.

What it could mean

A Fed that holds while two officials push for a hike leaves the door open to tighter policy, which could weigh on richly valued growth stocks if inflation stays near 3.6%. Falling Treasury yields late in the week point the other way: if bond buyers are betting that growth slows, rate-hike odds could fade.

Will December's decision follow the inflation data or the bond market?

Intel fell 28.6% on a weak forecast, and chip stocks sank with it

Intel's third quarter beat estimates. Its forecast did not.

The company earned an adjusted $0.52 a share, and data center revenue rose to $7.3 billion. But it expects fourth-quarter revenue of $15 billion to $16 billion and earnings of 25 cents a share, below the LSEG estimates of $17.1 billion and 43 cents.

The reason given is the PC market. AI data centers are absorbing much of the world's memory chips, pushing up prices for laptops and desktops. Intel now expects PC shipments to fall about 12% this year and another 10% in 2027. An accident at its Israel factory will cost about $300 million of fourth-quarter revenue on top of that.

Bernstein analyst Stacy Rasgon called the outlook "(in a word) terrible" and cut his price target to $75 from $110.

Intel fell 28.58% to $65.76 on Friday, erasing nearly $140 billion in market value by Yahoo Finance's count. By Yahoo's calculations, only one day in Intel's history was worse: July 5, 1974. The stock is still up nearly 80% this year, Yahoo said, but it lost 45.30% in October, its worst month since at least 2004, and about 24% this week.

The chip sell-off

Chipmakers fell with Intel on Friday:

• VanEck Semiconductor ETF (SMH): -6.98%, its worst day since June 23
• Sandisk: -13.47%
• Qualcomm: -11.12%
• AMD: -10.88%, its worst day since February 4
• Marvell: -10.05%
• Broadcom: -5.48%
• Micron: -5.30%
• Nvidia: -4.22%

AMD had no company news on Friday; it reports on Tuesday. SMH, which was up sharply through Wednesday, ended the week down 0.89% and October down 14.21%. The Technology Select Sector SPDR (XLK) fell 4.89% Friday, its worst day since June 5.

What it could mean

If the PC slump stays contained to Intel's business, the sell-off in other chipmakers may prove an overreaction to one company's forecast. If memory shortages and high prices keep squeezing PC demand, the effects could spread to other hardware makers, while the memory makers themselves could benefit from higher prices.

Was Friday a verdict on Intel alone, or on the whole chip trade?

Amazon missed estimates and burned cash, but recovered most of an early drop

Amazon's third quarter missed on both lines. It earned $1.89 a share on revenue of $201.94 billion; analysts polled by LSEG expected $1.96 and $202.31 billion.

The company reported negative free cash flow of $42.4 billion over the trailing 12 months, its second straight quarter of negative free cash flow, and kept its 2026 capital spending forecast at about $220 billion. It was the third hyperscaler (the biggest spenders on AI data centers), after Alphabet and Meta Platforms, to report negative free cash flow.

The stock was down about 6% to 7% before Friday's open and fell more than 5% during the day, but it closed down only 1.41% at $240.35. For the week it fell 3.08%.

Morgan Stanley analyst Brian Nowak wrote in a note to clients that "this seems mostly an expectations miss," pointing to the $3.8 billion Amazon Web Services added from the prior quarter, the second highest in its history.

The bigger worry

CNBC wrote that this compounded investor worries about the rising debt of the biggest tech companies. Keith Buchanan, senior portfolio manager at Globalt, said:

"Last year was hope. This year is: At the end of day, how does this all work in real world terms, like how to finance [it] and who gets the economics."

What it could mean

Amazon's recovery from its early low suggests some buyers were willing to look past the miss to its cloud growth. But if negative cash flow at the biggest spenders leads them to borrow more or slow their spending, the chip and data center companies that depend on those budgets could feel it.

Can the largest AI spenders keep spending at this pace if their cash flow stays negative?

Reddit fell 29% after its earnings report; Coinbase slid after Binance's security incident

Reddit -29.22%, to $91.73, its worst day since it listed in March 2024. Revenue rose 53% to $895 million, but the company gave a weak fourth-quarter revenue forecast and said U.S. daily visitors fell 2%. Asked on the earnings call whether Google's AI features were behind its declining search traffic, CEO Steve Huffman said:

"The AI mode does not drive traffic, not for us and not to anybody as far as I know."

Reddit lost more than a third of its value this week, the worst performance in the S&P 500.

Coinbase -10.62%. Binance, the world's biggest crypto exchange, said Friday that a security incident had an estimated impact of $6.3 billion, with about $3 billion in crypto assets frozen so far, and pledged to cover all losses using its Secure Asset Fund for Users and company funds. Coinbase and Robinhood fell after the hack. Bitcoin ended the week near $77,000, down nearly 5%.

Regeneron +13.33%. Third-quarter results beat estimates: adjusted earnings of $20.07 a share against the FactSet consensus of $16.42.

Also moving Friday

• Illumina -18.64%, Twilio -15.24%, Datadog -11.50%
• GoDaddy +10.72%, T-Mobile +6.21%

The week's extremes in the S&P 500

• Biggest losers: Reddit, down more than a third; ServiceNow, down about a third; F5 and Fortinet, each down about a quarter
• Biggest gainers: Pentair and Vertiv, each up nearly 20%; Carvana, up about 18%

What it could mean

Reddit's warning puts a number on a fear that reaches well beyond one company: if AI search answers keep users on Google, sites that rely on search traffic could lose readers and ad revenue. One of the largest crypto hacks ever could also weigh on confidence in digital assets, though Binance's pledge to cover losses may limit the damage to customers.

Is AI search a threat to every website that lives on Google traffic?

The twist: most S&P 500 stocks rose this week, even as the index fell

The S&P 500 fell 0.57% this week. The typical stock in it rose.

From the October 23 close to the October 30 close, 321 of the 503 S&P 500 stocks rose, 181 fell and one was unchanged. The median stock gained 1.30%, and the equal-weight S&P 500 fund (RSP) rose 0.82%, its fourth straight weekly gain. Small caps did better still: the Russell 2000 rose 1.29%, its second straight weekly gain.

Nine of the 11 Select Sector SPDR funds rose:

• Health care (XLV): +3.12%, the best
• Materials: +2.79%
• Utilities: +2.04%
• Consumer discretionary: +2.02%
• Industrials: +1.69%
• Real estate: +1.41%
• Consumer staples: +1.31%
• Financials: +1.09%
• Energy: +1.00%, a record close Friday
• Technology (XLK): -2.03%
• Communication services (XLC): -5.32%, its worst week since April 2025

Eli Lilly gained 11.31% for the week and Tesla 7.41%, its best week since May. Traders moved into health care and consumer staples; Coca-Cola and Procter & Gamble were notable outperformers.

Even Friday's drop was narrower than the index suggested: the S&P 500 fell 1.82%, but 226 of its stocks rose, and the median stock lost only 0.32%.

Keith Lerner, chief investment officer at Truist, pointed out that tech and communication services were the only sectors to fall in October, which he sees as a sharp rotation rather than broad selling of the entire market.

What it could mean

A market where most stocks rise while the biggest names fall can read two ways. Money rotating out of tech into the rest of the market has often kept a pullback shallow, because buyers are still putting money to work. It can also mean the leaders that carried the index are losing strength, and the rest of the market may not be able to carry it alone.

Is this a healthy rotation, or a sign that the market's leaders are faltering?

October left the Nasdaq down 5.3%, its worst month since March 2025, while the Dow rose 1.7%

October split the market in two.

From the September 30 close to the October 30 close:

• Nasdaq Composite: -5.30%, its worst month since March 2025
• Nasdaq-100: -6.65%
• S&P 500: -0.93%, its worst month since June
• Dow Jones Industrial Average: +1.70%, its best month since June
• Russell 2000: +0.54%

The damage was concentrated. The VanEck Semiconductor ETF (SMH) fell 14.21% in October and the Technology Select Sector SPDR (XLK) 8.30%. Intel lost 45.30% and Alphabet 18.67%, the worst month for each since at least 2004.

The Nasdaq Composite ended October 7.84% below its October 6 record close, and the Nasdaq-100 about 9% below its own record. That is short of the 10% decline usually called a correction. The S&P 500 is 3.05% below its record. The Nasdaq has now fallen three weeks in a row, its first three-week losing streak since March.

Selling picked up in Friday's afternoon trading as investors took money off the table into month-end and ahead of next week's midterm elections, market reports said.

What comes next on the calendar

According to the Stock Trader's Almanac, November has been the best month for the Nasdaq in midterm election years, with an average gain of 3.5%. That is an average over many years, not a forecast for this one.

What it could mean

Sharp monthly drops in the leading index have sometimes been followed by rebounds once the selling is exhausted, and the calendar has often been kinder in November of midterm years. But if the doubts about AI spending keep building through next week's earnings, the decline could stretch toward a full correction.

Did October's sell-off clear out the excess, or is the Nasdaq only partway through its pullback?

Next week might be even worse, CNBC's Jim Cramer says; Truist's Keith Lerner sees the tech uptrend intact

Two views on where tech goes from here.

The worried camp

On Friday night, CNBC's Jim Cramer said on his show:

"But for my money, next week, next week might be even worse, some crazy volatility, a lot of emotion."

He added that he thinks "the tech rout, sadly, may not yet be over."

BTIG's Jonathan Krinsky wrote in a Thursday note: "It's been an ugly reporting season for tech thus far." He thinks the S&P 500 will soon test its 200-day moving average, at 7,306, more than 5% below Thursday's close.

The patient camp

Keith Lerner, chief investment officer at Truist, wrote:

"The corrective process may not be complete, but the weight of the evidence suggests the longer-term tech uptrend remains intact."

Lerner also wrote that tech's "current 10% decline does not appear abnormal relative to prior pullbacks during this bull market."

Mark Malek of Siebert Financial, quoted by CNBC: "If you had to say today, 'Mark, are you buying or selling?' I'm buying." He added: "But just also increasing my inventory of things that go bump in the night."

The mood

CNN's Fear & Greed Index ended Friday at 26.2, in "fear," down from 34.6 the day before but up from 16.7, "extreme fear," a week earlier. The VIX rose 12.9% Friday to 19.42, about where it ended the previous week.

What it could mean

Fear readings this low have often come before rebounds, because much of the selling may already be done. But a market facing an election, a jobs report and big earnings in a single week could swing hard in either direction, and a second leg down would test the patient camp's view.

Which matters more next week: the fear already in the market, or the events still ahead of it?

Oil rose Friday and ended the week above $100 on signs the U.S. may resume strikes on Iran

U.S. crude ended the week above $100 a barrel. December WTI closed at $99.90 on Tuesday, then rose Friday to around $103 to $104 (price sources differ). Brent's front-month contract is now January, after December expired Friday; it ended near $113, up about 1.5% for the week. WTI was roughly flat for the week and up roughly 15% or more in October.

Oil rose Friday on signs the U.S. may resume military strikes against Iran. The Wall Street Journal reported that a top commander briefed President Donald Trump on military options on Thursday, and Trump has repeatedly signaled he may restart airstrikes against Tehran after next week's midterm elections. In Iran, Parliament Speaker Mohammad Bagher Ghalibaf suggested the Islamic Republic's positions on ending the war will not be compromised. A Ukrainian strike on a Russian refinery was also cited.

No decision has been announced. Jim Cramer said on CNBC Friday night that the president is supposed to decide about Iran on Wednesday; the reports from the Journal and Bloomberg mention only the briefing on options.

Energy stocks at records

Chevron and Exxon Mobil each rose to all-time highs on Friday after reporting third-quarter results. The Energy Select Sector SPDR (XLE) rose 1.91% Friday to a record close, its fifth straight weekly gain.

In Europe, Dutch TTF natural gas for December reached 101.63 euros per megawatt-hour, its highest since late 2022.

What it could mean

Renewed strikes could push oil higher still, which would help energy producers but raise costs for airlines, shippers and consumers and could keep inflation, and the Fed, on edge. If tensions ease after the election, some of the war premium in crude could come out, and energy stocks at record highs would have the most to give back.

Is oil above $100 pricing in a new conflict that has not happened yet?

Next week: Apple on Monday, the midterms and AMD on Tuesday, the jobs report on Friday

A crowded week. All times Eastern.

• Monday, Nov. 2: ISM manufacturing (10:00 a.m.). Earnings: Apple (after the bell), Palantir, Vertex, On Semiconductor, Marriott, Estee Lauder.
• Tuesday, Nov. 3: Election Day. JOLTS job openings (10:00 a.m.). Earnings: AMD, Pfizer, Amgen, Arista, Super Micro, Booking, Block.
• Wednesday, Nov. 4: ADP jobs, ISM services. Earnings: Qualcomm, AppLovin, Uber, McDonald's, CVS, DoorDash, Datadog.
• Thursday, Nov. 5: jobless claims, productivity. Earnings: Airbnb, Lumentum, Microchip, ConocoPhillips.
• Friday, Nov. 6: the October jobs report (8:30 a.m.). The FactSet consensus is 55,000 jobs added, with unemployment holding at 4.2%; September added 29,000.

In all, 138 S&P 500 companies report.

Apple

Apple is the best performer this year among the Magnificent Seven. On Friday, Bank of America analyst Wamsi Mohan removed it from the bank's US1 list of best investment ideas, writing that he has a "more conservative outlook" than the Street. Jim Cramer said: "You can trade it, but I am going to own it."

The midterms

Early polling and prediction markets suggest Democrats have a shot at winning majorities in both the House and the Senate, CNBC reported. Such an outcome could touch defense spending, drug pricing and data center rules. Mark Malek of Siebert Financial expects volatility but said "there's just so many other macro themes that are so much more important right now."

Iran

Oil traders are watching for a decision on whether U.S. strikes on Iran resume after the election.

What it could mean

A strong Apple report could steady the tech trade after a rough week, while a weak one would leave few large tech names untouched. A jobs number far from the 55,000 consensus could shift rate-hike odds either way: a hot report could firm up bets on a December hike, and a weak one could ease them while raising questions about growth.

Which event next week has the most power to move the market: Apple, the election or the jobs report?

The close: the S&P 500 and the Nasdaq fell for a third straight week; small caps rose

Friday, October 30

• S&P 500: 7,580.07, down 140.32 (-1.82%), its worst day since June 5
• Nasdaq Composite: 25,437.00, down 747.72 (-2.86%), its worst day since June 5
• Dow Jones Industrial Average: 51,770.31, down 572.25 (-1.09%)
• Russell 2000: 2,811.84, down 47.38 (-1.66%)
• Nasdaq-100: 28,384.85 (-3.46%)
• VIX: 19.42, up 2.22 (+12.9%), after touching 23.93 during the day

Stocks sold off for most of the day, hit their lows around 2:50 p.m. Eastern and bounced a little into the close.

The week (October 23 close to October 30 close)

• S&P 500: -0.57%, its third straight weekly loss
• Nasdaq Composite: -2.00%, its third straight weekly loss
• Dow: -0.85%, ending a three-week winning streak
• Russell 2000: +1.29%
• Nasdaq-100: -1.98%

Day by day, the S&P 500 went +0.70%, +0.60%, +0.28%, -0.31% and -1.82%. It ended 3.05% below its October 6 record of 7,818.93, at its lowest close since September 16.

Rates, oil, gold and bitcoin

• 10-year Treasury yield: about 4.93%, down about 6 basis points for the week (preliminary)
• Oil: WTI above $100, around $103 to $104; Brent (January) about $113
• Gold: fell more than 3% Friday, below $3,900 an ounce, down about 3% for the week, its third straight weekly loss
• Silver: down about 6% Friday
• Bitcoin: about $77,000, down nearly 5% for the week

What it could mean

Three straight losing weeks for the S&P 500 and the Nasdaq show sellers in control of the biggest stocks, yet a rising Russell 2000 and falling Treasury yields tell a different story about the rest of the market. If yields keep easing, that could support small companies and the stocks that rose this week; if tech keeps falling, its weight in the indexes could keep them under pressure regardless.

Will the rest of the market keep rising if tech keeps falling?