Nasdaq futures rebound after AI fears fuel tech rout

A rout in technology shares capped a rough October for Wall Street. On Friday, October 30, the Nasdaq Composite fell 2.86% and the S&P 500 dropped 1.82%. For both indexes it was the worst day since June, after weak results from Intel and Amazon added to concerns about AI spending. The Nasdaq 100 had its worst month in more than a year, and the Nasdaq Composite had its worst month since March 2025.reuters.com+2

Investors are now asking whether the money hyperscalers are pouring into AI will pay off quickly enough. More of that spending is being paid for with borrowed money, which raises the stakes if near-term demand falls short (The New York Times).nytimes.com

Three reports, one worry

Alphabet shares fell more than 12% on Thursday, October 29, which wiped out about half a trillion dollars in market value. The company has now posted two straight quarters of negative free cash flow for the first time on record. Investors also worried that AI chatbots could eat into Google's search advertising. Amazon missed expectations on sales and profit and reported negative free cash flow of $42.4 billion over the past 12 months. Intel fell 28.58%, its worst day since 1974, after it gave weak fourth-quarter guidance and blamed a soft PC market.us.cnn.com

"Investors don't just want capex, they want to see the returns already," said Neil Wilson of Saxo Markets. Meta Platforms recently reported its first quarter of negative free cash flow since 2012. Microsoft stood out with $18.6 billion in positive free cash flow.us.cnn.com

Broader market under strain

The S&P 500 tech sector fell 6.8% in October. Even so, nine of the index's 11 sectors gained, and the S&P 500 finished the month down less than 1%. On Friday it closed below its 100-day moving average for the first time since April. "The economy looks good because of AI," said Marta Norton of Empower. She warned that a real setback for AI would change market dynamics.marketscreener.com

A volatile week ahead

Nasdaq futures recovered somewhat early Monday (Thomson Reuters). Apple and Palantir report after Monday's close, and Advanced Micro Devices reports on Tuesday, November 3. AMD's results are expected to show whether Intel's problems are specific to Intel or a sign of wider trouble for chipmakers. The midterm elections, also on Tuesday, add to the uncertainty.finance.yahoo.com+3

Some strategists warn that more selling would not stay confined to tech. "If the major averages begin to drop in a more compelling manner, it is very likely that investors will stop rotating into other sectors … and start rotating into cash," said Matthew Maley of Miller Tabak.marketscreener.com