Chip woes drag Nazdaq, S&P 500 to worst day since June
Nasdaq falls 2.9% and ended its worst month since March 2025. SOXX loses 8.2% Friday and 17.1% in October.
Key takeaways
The Nasdaq Composite had its worst day since June on Friday, with chip funds taking the heaviest losses. Intel fell 28.6% after a weak fourth-quarter forecast, its biggest one-day drop since 1974. The selling spread to Advanced Micro Devices, Qualcomm and the rest of the semiconductor group. iShares Semiconductor ETF (SOXX) fell 8.2%, and VanEck Semiconductor ETF (SMH') fell 7%.
The Nasdaq fell 2.86% to 25,437.00. The S&P 500 fell 1.82% to 7,580.07, and the Dow Jones Industrial Average fell 1.09% to 51,770.31. Invesco QQQ Trust (QQQ) lost 3.5%, State Street SPDR S&P 500 ETF (SPY) lost 1.8%, and State Street Technology Select Sector SPDR ETF (XLK) lost 4.9%.
State Street Technology Select Sector SPDR ETF, XLK, fell 4.9%. On the most reently-reported weightings, Intel was 2.7% of the fund and the largest single drag, pulling the fund down 0.77 percentage points for the day. Nvidia, at 15%, took 0.63 percentage points, while Advanced Micro Devices took 0.53 percentage points off the fund.
Advanced Micro Devices fell 10.9%, Nvidia fell *4.2%, Apple fell 1.2% and Microsoft dropped 1.6%. while Broadcom (-5.48%) and Micron (-5.3%**) also dragged tech fund returns down, as well.
Intel led the drop. The rest of XLK was larger.
Friday ended a rough week for tech stocks in which investors sold off the biggest spenders on artificial intelligence.
Alphabet had its worst day in more than 20 years on Thursday after its results, and Amazon reported record cash burn that evening. The Federal Reserve held its benchmark rate at 3.75% to 4% on Wednesday in a 10-2 vote. On Thursday, the personal consumption expenditures price index, the Fed’s preferred inflation gauge, showed prices up 3.6% from a year earlier in September. Markets put the odds of a December rate increase above 80%. On Friday, St. Louis Fed President Alberto Musalem and Richmond Fed President Tom Barkin each said rates need to rise further.
At the end of the week, QQQ was down 2% and SPY down 0.6%.
October was particularly scary for chip funds: SOXX fell 17.1% for the month, SMH 14.2% and XLK 8.3%.
The Nasdaq fell about 5% in October, its worst month since March 2025. Large industrial stocks bucked the trend: The Dow rose 1.5% for the month.
Friday left QQQ down 2% from last week
PC slowdown spooks markets
Intel closed at $65.76, down 28.6%, losing about $139 billion of market value in a single day, Friday. On Thursday the company reported third-quarter revenue of $16.5 billion and non-GAAP earnings, excluding some items, of $0.52 a share. It forecast fourth-quarter revenue of $15 billion to $16 billion and non-GAAP earnings of $0.25. Charles Schwab, in a note published at 9:23 a.m. Eastern time, said that revenue range sat below a FactSet consensus of $17.29 billion.
"Looking ahead, we see the PC slowdown continuing at least through the first half of next year, but we remain optimistic about the opportunities across our broader portfolio," David Zinsner, Intel's chief financial officer, said in the release.
MarketWatch reported Friday that the forecast was for a prolonged slowdown in personal-computer sales, mostly because of high memory-chip prices. The decline also hit equipment makers and other semiconductor suppliers. Intel's outlook, together with an earnings miss from Amazon, had fueled fresh concerns about artificial intelligence.
Amazon and the semiconductor funds
Amazon closed at $240.35, down 1.4%. Shares had been down almost 7% before the open according to Schwab reporting.
CNBC reported Thursday that revenue of $201.94 billion missed an analyst estimate of $202.31 billion, compiled by LSEG, and earnings of $1.89 a share missed $1.96.
Amazon said it still expects capital spending to reach $220 billion this year. Spending last quarter was $77.3 billion, against $35.1 billion a year earlier.
Cloud sales rose 39%, to $45.98 billion, ahead of a StreetAccount estimate of $45.29 billion.
Schwab and MarketWatch had paired the two results before the open. By the close, Intel's loss had deepened and Amazon had recovered most of the morning's drop.
The two large semiconductor funds fell by different amounts because their weights differ. iShares Semiconductor ETF, SOXX, fell 8.2%. VanEck Semiconductor ETF, SMH, fell 7.0%. On the latest reported weights, SOXX has 8.1% in Intel, about twice the 4.1% in SMH, and 9.5% in Advanced Micro Devices, against 5.6% in SMH.
SMH has 19.6% in Nvidia. SOXX has 7.6%. Nvidia fell much less than Intel or Advanced Micro Devices, so that heavier stake cushioned SMH. SOXX fell more because it holds more of the two stocks that fell hardest.
Energy, yields and gold
Energy and consumer staples funds gained on Friday. State Street Energy Select Sector SPDR ETF (XLE) rose 1.9%, its third straight gain, after Exxon Mobil and Chevron reported higher refining profits and briefly touched record highs. December West Texas Intermediate crude futures rose about 0.8% to $102.82 a barrel; Bloomberg reported that oil rose on signs the U.S. could resume strikes on Iran. State Street Consumer Staples Select Sector SPDR ETF (XLP) rose 1.4%.
** Bitcoin falls after hackers raid Binance
Bitcoin fell about 2.7% to roughly $76,800 after hackers stole an estimated $6.3 billion from crypto exchange Binance on Thursday, which industry trackers called the largest crypto theft on record. Binance said it would cover customer losses.
Energy led. Technology was last.
The 10-year Treasury yield fell 4 basis points, to 4.94%. Gold futures also slipped to $3,885 per ounce as of 4:38 p.m. Eastern time, down 3.6% from Thursday's settle. SPDR Gold Shares, GLD, fell 3.5% in the regular session.
Coming next week
Next week brings the midterm elections on Tuesday, Nov. 3, and the October jobs report on Friday, Nov. 6.
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