Nasdaq 100 Plunges 3.5% as AI Investment Doubts Intensify Tech Stock Selloff
The Nasdaq 100 fell 3.5% to 28,384.85 points, marking its worst monthly performance since March 2025, after dropping as much as 4.45% intraday. Earnings from Alphabet and Amazon intensified market concerns over massive AI capital expenditures, while Intel plunged 29% on a revenue outlook that fell short of expectations, its largest single-day drop on record; Nvidia and AMD fell 4.2% and 11%, respectively. The Philadelphia Semiconductor Index dropped 7.2%, falling below its 200-day moving average for the first time since June 2025.
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The Nasdaq 100 Index fell 3.5%, its worst monthly performance since March 2025, dropping as much as 4.45% intraday and briefly falling below the threshold for a technical correction.
Investors are showing less tolerance for technology companies, especially as their traditional businesses weaken while they simultaneously plan massive capital expenditures.
Results from Alphabet Inc. and Amazon exacerbated market concerns that the technology these companies are betting on may be cannibalizing their core businesses.
Amazon shares fell 1.4%, as spending plans centered on AI and a weak e-commerce business overshadowed the positive of solid cloud growth. The related results dragged down all of the Magnificent Seven U.S. technology stocks.
Intel shares fell 29%, marking the largest single-day drop in its history. The company's quarterly revenue outlook was worse than analysts expected, with demand for PC processors sluggish and its high-margin data center components facing supply chain problems.
AMD and Nvidia fell 11% and 4.2%, respectively, while PC maker Dell Technologies fell 11%.
The Philadelphia Semiconductor Index fell 7.2%, falling below its 200-day moving average for the first time since June 2025.
"The bigger question now is whether the weakness in tech stocks will spread to the broader market, or whether money will continue to rotate among different sectors?" BTIG chief market technician Jonathan Krinsky wrote in a report.
Apart from the communication services and information technology sectors, all other S&P 500 sectors rose this month.
But technology stocks carry a high weight in the major stock indexes and could weigh on the broader market, especially with the U.S. midterm elections coming next week.
"If the major stock indexes start to fall, investors may choose to move to cash rather than rotate into other sectors," said Matt Maley, chief market strategist at Miller Tabak & Co.
At the close, the S&P 500 fell 1.8% to 7,580.07 points.
The Dow Jones Industrial Average fell 1.1% to 51,770.31 points.
The Nasdaq Composite fell 2.9% to 25,437 points..
The Nasdaq 100 fell 3.5% to 28,384.85 points.
The Russell 2000 fell 1.7% to 2,811.844 points. news_keyword_pub,usstock,AMZN&INTC&DELL&.DJI&.IXIC&AMD iframe below body iframe below body General statement General statement QR code at end start QR code at end start
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