Wall Street’s Halloween scare: Intel plunges 29% as Amazon’s AI bill comes due

Wall Street ended October with its worst session in almost five months on Friday, as results from Intel and Amazon added to doubts about whether the huge sums being poured into artificial intelligence will pay off. The S&P 500 fell 1.82% to 7,580.07, the Nasdaq Composite dropped 2.86% to 25,437.00 and the Dow Jones Industrial Average lost 572 points, or 1.09%, to 51,770.31.

Change on October 30, 2026

Show the numbers

	Daily change
Dow Jones	−1.09%
Russell 2000	−1.66%
S&P 500	−1.82%
Nasdaq	−2.86%

Source: Associated Press; Investrade

Intel: a good quarter, a bad forecast

Intel’s third quarter was better than expected. Revenue rose 21% from a year earlier to $16.5 billion and adjusted earnings came in at 52 cents a share, according to the results the company filed with the SEC. Revenue from its data-center and AI business grew 78% to $7.3 billion.

The problem was the outlook. Intel forecast fourth-quarter revenue of $15 billion to $16 billion and adjusted earnings of about 25 cents a share. Analysts surveyed by Bloomberg had expected roughly $17 billion and 43 cents. The company blamed weak demand for PC chips and limits on how many data-center chips it can make. It expects the PC market to shrink by about 10% next year after a fall of around 12% this year, and it guided for its adjusted gross margin to drop to 38% from about 44% in the third quarter.

The shares closed down 28.6%, Intel’s biggest one-day fall since 1974, the Associated Press reported. An index of chip stocks fell more than 7%. Nvidia lost 4.2%, and because of its size it was the single biggest drag on the S&P 500, ahead of Intel.

Amazon: fast cloud growth, faster spending

Amazon’s cloud unit, AWS, grew 39% to $46.0 billion, its fastest pace in nearly five years, and the company’s overall operating margin reached a record 13.9%. Chief executive Andy Jassy said AWS expects growth above 40% in both 2027 and 2028.

Investors looked past that to the cash. Amazon spent $77.3 billion on property and equipment in the quarter, compared with $35.1 billion a year earlier and a FactSet estimate of about $58.7 billion. Over the past 12 months its free cash flow, the cash left after paying for investments, turned to an outflow of $42.4 billion from an inflow of $14.8 billion a year earlier. Amazon kept its forecast of about $220 billion in capital spending for 2026 and said 2027 will be meaningfully higher. Earnings of $1.89 a share were also slightly below forecasts.

The stock fell about 7% before the opening bell but recovered most of that during the day and closed down 1.4%.

Why the market cares about cash

Friday followed a heavy Thursday, when Alphabet fell more than 12%, its worst day on record, after reporting negative free cash flow of about $9.1 billion for the quarter. Together, the three reports pushed the same question to the front. The biggest tech companies are now spending more on data centers than their businesses bring in, and investors want evidence that the spending will earn its keep. One portfolio manager quoted by the AP said the AI trade was moving into a “show me” phase.

High interest rates add to the pressure. The Federal Reserve kept its benchmark rate at 3.75% to 4.00% on Wednesday, but two officials voted for an increase, and higher borrowing costs make debt-funded building more expensive.

Where the money went instead

Not everything fell. ExxonMobil rose 2.2% and Chevron 1.8% after both oil companies beat profit forecasts on strong refining margins. Mondelez gained 3.9% and Colgate-Palmolive 2.3% after their own results, and nearly as many S&P 500 stocks rose as fell, according to the AP. Investors also bought government bonds: the 10-year Treasury yield fell to 4.93%, from more than 5.30% earlier in the month.

For the week, the S&P 500 lost 0.58% and the Nasdaq 2%, the third weekly decline in a row for both.