US STOCKS-Wall Street slides as AI cash burn worries spark tech selloff

By Stephen Culp and Purvi Agarwal

NEW YORK, Oct 30 (Reuters) - US stocks tumbled on Friday, with the Nasdaq plunging to a three-month low following disappointing quarterly results from Intel and Amazon, which amplified growing fears surrounding AI-related companies' massive spending on the nascent technology, and concerns about when or whether the cash burn will start to pay off.

All three major US stock indexes slumped, with the Nasdaq sliding 3.4%. The tech-heavy index has dropped more than 8% from its all-time closing high reached on October 6.

The tech rout was sparked by disappointing quarterly results from Intel INTC.O and Amazon AMZN.O released late on Thursday. The companies' shares slumped 2.1% and 30.9%, respectively.

Chip stocks veered sharply lower, with Nvidia NVDA.O down 5.3% and AMD AMD.O sliding 12.1%. The broader chips index .SOX shed 8.7% and was headed for a monthly loss. Server makers Dell DELL.N and HP HPQ.N lost 12.5% and 10.8%, respectively.

Amazon and Intel were set to wipe out nearly $200 billion in combined market value if losses hold, setting up the Nasdaq-100 .NDX to erase over $1 trillion on Friday.

"It's fair to say that this week, not just today, has been very much about the future of AI and what that's going to look like, whether there will be a positive return on investment and if so, how quickly," said Oliver Pursche, senior vice president at Wealthspire Advisors in New York.

"Companies that are performing and meeting the very lofty expectations that have been set are doing well," Pursche added. "Those that are falling short and seem to be missing the mark or not executing as expected are getting punished."

The selloff put all three indexes on course to close lower on the week. The S&P 500 and the Nasdaq are on track to log monthly losses, while the Dow appears set to end October with a gain.

The Dow Jones Industrial Average .DJI fell 566.81 points, or 1.08%, to 51,778.86, the S&P 500 .SPX lost 160.54 points, or 2.08%, to 7,559.85 and the Nasdaq Composite .IXIC lost 881.35 points, or 3.37%, to 25,303.37.

The S&P 500 tech sector .SPLRCT was on track for its largest monthly percentage loss since March 2025, and communication services .SPLRCL looked to be headed for its biggest monthly drop since April 2022.

Third-quarter earnings season has passed the halfway mark, with 299 companies in the S&P 500 having reported. Of those, 82% have beaten consensus expectations, according to LSEG data.

Analysts now expect third-quarter S&P 500 earnings growth of 31.6%, year-on-year, per LSEG.

Oil supermajors Exxon Mobil XOM.N and Chevron CVX.N both beat quarterly profit expectations, benefiting from soaring profit margins as a result of energy supply disruptions arising from the US-Israeli war with Iran and Russia's war in Ukraine. The stocks gained 1.7% and 1.4%, respectively.

Starbucks SBUX.O slid 1.4% after the coffee chain forecast an annual revenue decline due to its divestiture of its Chinese business.

Cryptocurrency-related firms Coinbase COIN.O, Strategy MSTR.O, and Robinhood HOOD.O fell between 8.8% and 13.6% in the wake of reports that hackers stole $6.3 billion from Binance, the world's biggest cryptocurrency exchange.

Declining issues outnumbered advancers by a 1.8-to-1 ratio on the New York Stock Exchange. There were 147 new highs and 298 new lows on the NYSE.

On the Nasdaq, 1,144 stocks rose and 3,559 fell as declining issues outnumbered advancers by a 3.11-to-1 ratio.

The S&P 500 posted 43 new 52-week highs and five new lows while the Nasdaq Composite recorded 62 new highs and 290 new lows.