Nasdaq 100 Enters Correction as Tech Stocks Plummet Amid AI Spending Concerns

The Nasdaq 100 index has officially entered correction territory, experiencing a 10% decline from its October high, according to reports. This downturn is largely attributed to significant selling pressure on technology stocks, particularly in the semiconductor and artificial intelligence sectors.

Recent market activity has been influenced by concerns surrounding Alphabet’s performance, alongside broader volatility affecting major tech companies. The index’s fall below its 100-day moving average suggests a potential shift in market sentiment, which could have implications for related financial markets, including cryptocurrencies.

Market participants are particularly attentive to the recent drop in Bitcoin prices, which reflects a waning confidence among investors. Analysts note that the likelihood of Bitcoin surpassing key price thresholds by November 3 has diminished, indicating a cautious outlook.

Market Impact and Future Observations

The combined losses of the Nasdaq 100 and S&P 500 have reached nearly $3.3 trillion, driven by disappointing earnings reports and soft guidance from major tech firms. The Nasdaq Composite saw a 3.37% decline, closing at 25,303.37, while the S&P 500 slipped 2.08% to 7,559.85.

• Intel faced a staggering drop of approximately 29-30% after revising its revenue forecast downward.
• Amazon reported negative free cash flow, raising concerns about its capital expenditures.
• Alphabet’s significant loss in market value highlighted investor worries regarding the growth of its search advertising business.

As the tech sector navigates these challenges, observers will be monitoring key economic indicators and any developments in technology performance that could further influence market sentiment.

New Developments on Meta Platforms

• S&P Global Ratings has revised its outlook on Meta Platforms to negative, indicating concerns about the company's ability to finance its AI ambitions.
• Meta reported Q3 2026 earnings with revenue of $64.6 billion, a 26% increase year-over-year, but also recorded its first negative free cash flow in over a decade at approximately -$2.12 billion.
• The company raised its 2026 capital expenditure guidance to $135 billion to $145 billion, primarily for AI infrastructure.
• Meta plans to invest around $825 billion in future data center and AI infrastructure spending.
• To fund its AI initiatives, Meta is considering a new class of non-voting shares and possible equity raises to avoid additional debt.
• Following the earnings report, Meta's stock fell 7%, and its five-year credit default swaps increased to 114.79 basis points, indicating heightened risk perception among traders.
• Despite the negative outlook, some Wall Street analysts raised their price targets for Meta, citing the strength of its core advertising business.