Amazon and Intel's third-quarter earnings disappointed, heightening market concerns over artificial intelligence spending and investment returns. Chip stocks faced heavy selling pressure on October 30, dragging all four major U.S. indexes lower, with the Philadelphia Semiconductor Index plunging more than 800 points and tumbling over 15% for the month. In the coming week, U.S. stocks face a triple test from the midterm elections, Big Tech earnings and the nonfarm payrolls report, with the trend gripping market nerves.
All Four Major Indexes Close Lower, Philadelphia Semiconductor Index Plunges 7.2%
The Dow Jones Industrial Average closed down more than 570 points or 1.1% on October 30 at 51,770.31; the S&P 500 fell 1.8% to close at 7,580.07; the tech-heavy Nasdaq fell more than 4% intraday before ending down 2.9% at 25,437; the Philadelphia Semiconductor Index plunged 830 points or 7.2% to close at 10,688.8. All three major U.S. indexes closed lower for the week; for the month, the S&P and Nasdaq both closed lower, while the Dow barely closed higher.
Intel Plunges 28.6%, Worst Since 1974
Weak results from Amazon and Intel triggered selling in chip stocks, with Amazon trimming its decline to 1.4% by the close, while Intel failed to recover, plunging 28.6% at the close for its worst single-day drop since 1974. Other semiconductor stocks were also dumped, with Nvidia down 4.2%, AMD slumping 10.9%, and TSMC ADR down 6%. Tech earnings deepened investor worries over massive AI investments, with the AI theme key to supporting the U.S. bull market.
Triple Test Next Week: Election, Earnings, Jobs Report
In the coming week Apple, AI software company Palantir, and semiconductor stocks AMD and Qualcomm will report earnings in turn, and U.S. stocks may remain volatile. The U.S. midterm elections on November 3 will determine whether the Democrats can retake control of Congress, currently controlled in both chambers by the Republicans led by U.S. President Trump, with markets widely expecting the Democrats to win the House while views are divided on whether they can win the Senate. As data center construction increasingly draws public backlash, a sweeping Democratic victory is expected to bring more scrutiny, potentially affecting AI development.
Nonfarm Payrolls to Sway Fed Rate-Hike Expectations
The October nonfarm payrolls report is due on November 6, helping investors assess the timing and pace of the Federal Reserve's next rate hike based on U.S. economic conditions. The Federal Reserve stood pat at its October meeting, with markets betting on another rate hike in December. In addition, the United States will end daylight saving time on November 1 and revert to standard time, with U.S. stocks opening one hour later from Taiwan time on the 2nd, at 10:30 p.m.