AI stocks tumble after earnings miss and rate‑hop concerns
Wall Street’s early optimism for artificial‑intelligence‑related equities faded as tech earnings disappointed and investors braced for another Federal Reserve rate hike. The Nasdaq rose more than 2% through Wednesday but fell 1.4% on Thursday and nearly 3% on Friday, leaving the index down 2% for the week and 5.3% for October. The S&P 500 showed a similar pattern, slipping almost 2% on Friday.
Key points
- Nasdaq fell 1.4% Thursday and nearly 3% Friday after a 2% rise earlier in the week.
- Intel shares dropped over 28% following a weak outlook, becoming the week’s worst performer.
- Defensive stocks like Eli Lilly and FedEx gained 6%‑15%, while AI‑heavy names lagged.
Key drivers included Anthropic’s IPO filing, which initially sparked enthusiasm, and SK Hynix’s record quarterly profit that buoyed semiconductor sentiment. The rally collapsed after weak results from Microsoft, Alphabet, and Amazon, with Intel’s outlook triggering a 28% share plunge. Defensive names such as Eli Lilly, FedEx, Linde, and Starbucks outperformed, while Boeing fell nearly 9% after revising its free‑cash‑flow timeline. Analysts highlighted that investors are now prioritizing financial discipline and clear returns on AI spending over aggressive growth.
The broader market’s shift reflects lingering concerns over high‑cost memory, potential over‑borrowing by AI‑focused firms, and the prospect of tighter monetary policy, underscoring the volatility of AI‑driven investment narratives.
The story so far
2 episodes →- AI stocks tumble after earnings miss and rate‑hop concernsthis story
Stocks started the week with promise but ended in despair. Our take on the big reversal
CNBC Technology · 31 October 2026
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