October ends with a thud for Intel, Reddit, AI stalwarts

Microsoft

Today 20:32

By Sinéad Carew and Chuck Mikolajczak
NEW YORK, Oct 30 (Reuters) - Monday will ring in a brand-new trading month, a prospect that appeals to many after a doozy of a last session in October.
A fresh test of this year’s technology rally sent the Nasdaq composite .IXIC on Friday to its biggest decline since June. Chipmaker Intel INTC.O and social media firm Reddit RDDT.N fell 29% and Sandisk SNDK.O, a chipmaker that has been one of the great beneficiaries of the AI capital-spending boom, dropped 13%.
Friday’s selloff came after a bruising for the big tech firms at the center of the AI buildout, led by Microsoft MSFT.O, Meta Platforms META.O, Amazon AMZN.O and Google parent Alphabet GOOGL.O. Their shares dropped 1% to 2% on Friday following significant declines earlier in the week. 
The four so-called hyperscalers have been collectively responsible for more than a third of all the capital spending undertaken by the current constituents of the S&P 500 over the past 12 months, Capital Economics said, adding that their share seems likely to rise to an even higher level – a prospect that investors are struggling with.
“Now that the combined capital spending boom at the hyperscalers is becoming partly dependent on external financing, investors are becoming more nervous about the sums they are collectively investing and how they are doing it,” said John Higgins, a markets economist at Capital Economics. 
The Nasdaq 100 .NDX index of large nonfinancial stocks fell 3.5% after being down more, putting it on the brink of a correction, referring to a 10% decline from its recent high. The Nasdaq composite is down 7.8% from its closing high, after its worst month since March 2025 wiped out a chunk of this year’s AI-fueled gain.
“Investors are voting all of a sudden and all together on who will monetize the investment and who won’t,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. 
The damage went well beyond technology shares that until lately have ridden positive sentiment higher, reflecting a broad pullback from risk as Treasuries rallied. Silver XAG= dropped 6%, putting it down 31% for the year, and gold XAU= fell 3.5%, putting it down 10% for 2026. 
But investors said most of the selling in stocks recently is at first blush a case of 'what goes up, must come down'.
"I don't think it's a particularly troublesome leverage issue that we're dealing with. We've had such a huge move up in the whole complex," said Sahak Manuelian, managing director for global equities sales and trading at Wedbush Securities. 
Oil prices rose 2%, adding to concern about the health of a US economy that many investors see as dependent on the AI buildout for its pep. Financial stocks were hit hard, with Goldman Sachs GS.N down 4% and Jefferies JEF.N off 6%. Bitcoin BTC= fell 3% after hackers took more than $6 billion from Binance. 
One question facing investors is whether a new month will mean a fresh start, after a day in which many investors headed for the hills rather than waiting to see what happens over the weekend.
"When you've had the parabolic-like moves, it makes for a very nasty downdraft,” Manuelian said. “And I think that's what we're seeing. And then you have people that are starting to pull money out and going to other areas."

(Reporting by Sinead Carew, Chuck Mikolajczak and Karen Brettell in New York, editing by Colin Barr and David Gaffen)
((colin.barr@thomsonreuters.com))