The U.S. stock market faced its worst day in months on Friday, driven by a sharp sell-off in tech stocks. The S&P 500 dropped 1.8%, marking its third consecutive losing week, while the Nasdaq composite fell 2.9% and the Dow Jones Industrial Average lost 572 points. Investors grew concerned that the frenzy around artificial intelligence (AI) technology had pushed prices too high, leading to widespread declines in tech-heavy sectors.
Intel's stock plummeted 28.6%, its worst drop since 1974, after the company's profit forecast for the final quarter fell short of expectations. Amazon also declined 1.4% following a weaker-than-expected profit report for the summer, raising concerns about its massive cash burn of $42.4 billion over the prior 12 months. Alphabet, the parent company of Google and YouTube, had already suffered a 12% drop the day before due to similar cash flow issues tied to AI investments.
In the cryptocurrency market, Bitcoin fell below $77,000 after a hack on Binance, the world's largest crypto exchange, impacted over $6 billion worth of crypto. Coinbase Global dropped 10.6%, and MicroStrategy fell 7.8%, despite both companies reporting stronger-than-expected quarterly results. Meanwhile, non-tech stocks showed resilience, with ExxonMobil, Chevron, Mondelez International, and Colgate-Palmolive all reporting stronger profits and rising in value.
The S&P 500 closed at 7,580.07, the Dow at 51,770.31, and the Nasdaq at 25,437.00. Treasury yields eased slightly, signaling investor interest in safer assets, while oil prices rose 2.4% to $113.43 per barrel. International markets were mixed, with South Korea's Kospi dropping 3.5% and Japan's Nikkei 225 falling 2.1% after the Bank of Japan kept interest rates steady.