The stock market experienced significant turbulence on Friday, as investors pulled back from technology shares, causing the Nasdaq Composite to tumble 2.86%—its worst daily drop since June—closing at 25,437. The Dow Jones Industrial Average also fell, down 572.25 points or 1.09%, ending at 51,770.31, while the S&P 500 declined 1.82% to 7,580.07. This shift was largely driven by profit-taking ahead of month-end and anticipation of the upcoming midterm elections, with a notable rotation from AI-related stocks towards more defensive sectors like consumer staples and healthcare.

Several major technology companies reported disappointing earnings, intensifying the sell-off in the sector. Amazon’s shares dropped over 1% after posting third-quarter revenue and earnings that missed Wall Street expectations and revealing a negative free cash flow of $42.4 billion. Intel’s stock plunged nearly 29% following a weak forecast tied to a slowdown in PC demand, with its client computing and AI revenue declining 5% from the prior year’s quarter. Other chipmakers such as Advanced Micro Devices and Nvidia saw double-digit and single-digit declines, respectively, amid broad pressure on semiconductor stocks.

Contrasting the tech slump, defensive sectors provided some stability to the broader market. Consumer staples giants Walmart and Coca-Cola rose more than 1%, helping to cushion Dow losses, while healthcare stocks like Merck, Amgen, and Regeneron Pharmaceuticals rallied. Regeneron’s shares surged more than 11% after surpassing earnings expectations and raising its gross margin guidance for the year. This rotation highlights investor caution amid economic uncertainties, with market participants scrutinizing how technological advancements, particularly in AI, translate into tangible economic benefits and sustainable earnings.

Further dampening sentiment was news that Anthropic, an AI algorithm company, may face a “high” junk debt rating following its IPO, as reported by the Financial Times. Meanwhile, broader indicators showed continued volatility, with chip ETFs falling below key moving averages and gold and silver prices dropping to their lowest levels since late 2025. Oil prices rose, with Chevron and ExxonMobil reaching record highs after robust quarterly profits. Overall, October closed as a challenging month, particularly for tech stocks, with the Nasdaq falling 5.3%—its steepest monthly decline since March 2025—amid investor caution in the face of weak earnings and elevated macroeconomic risks.