US Stock Market: Tech Stocks Wipe Out $2 Trillion In October, Nasdaq 100 Crashes 2,024 Pts; What Is Impacting?

The US stock market witnessed a bearish October as tech stocks erased a whopping over $2 trillion, as investors are wary over aggressive spending in artificial intelligence (AI). The core fear is whether AI infrastructure spending has the potential to give returns quickly. In October, the Nasdaq 100 index crashed by more than 2,000 points, and the Nasdaq Composite index plunged by more than 5%.

Tech Stocks Selloff:

Yesterday, tech stocks wiped out up to $1 trillion alone in value, toppling Nasdaq by 3.4% in the afternoon trade, making it one of the worst single-day performances since mid-June.

Due to the latest extreme bearish trend, Nasdaq 100 sank by 2,023.65 points or 6.65% for October month, while Nasdaq Composite plunged by 1,424.06 points or 5.30% for the period.

The Nasdaq Composite closed the month at 25,437 and Nasdaq 100 ended the month at 28,384.85.

Among the worst performers were chipmakers and semiconductor-related companies. Intel crashed 29% after estimating its Q4 revenue and profitability to decline below expectations. While SanDisk slipped by 13%, followed by approximately 10% drop in stocks like AMD, ARM Holdings, Qualcomm and Marvell. Also, Philadelphia Semiconductor Index and the DRAM ETF tumbled around 7% each.

They were not alone. data centre operators like Nebius and CoreWeave also recorded sharp selloffs of over 10% each.

What investors fear is the overspending by major tech players into developing AI infrastructure, could not hedge expected returns quickly. There is a need of evidence that AI infra spending could offer sustainable revenue and growth.

Giants like Amazon, Meta, Alphabet and Microsoft have infused millions of dollars in AI infra, while expanding their CAPEX. As per Gartner's September 2026 forecast, worldwide AI spending is estimated to hit $2.67 trillion in 2026, which will be higher by 49.5% from 2025. These include AI infrastructure, software and services, not just spending by large technology companies.

Meanwhile, another JP Morgan report stated that the global AI-related capital expenditure may breach $900 billion in 2026, with cumulative spending estimated to reach $5.5 trillion by 2030.

The bottom-line is that AI spending has become one of the biggest investment themes in the global markets. While AI is expected to create opportunities for technology, semiconductor, power and data-centre companies, but for investors the question is whether the revenue generated by these AIs will justify the enormous capital being deployed.

Signs of a slowdown in AI-related business growth have sharpened scrutiny of the durability of AI demand and whether the huge sums being invested in the technology will generate sufficient returns. Among chipmakers, Nvidia fell 4.2%, AMD slumped 11%, Broadcom shed 5.5%, and Micron lost 5.3%. Among hyperscalers, Alphabet extended losses by 1.4% after a slump of 12.6%. Elsewhere, ExxonMobil gained 2.2% and Chevron advanced 1.7% as both topped Q3 forecasts. For the week, the S&P 500 fell 0.9%, the Nasdaq shed 2.4%, and the Dow lost 1.2%. For the month, the S&P 500 declined 0.9%, the Nasdaq lost 6.6%, while the Dow added 1.7%, as per Trading Economics.

Wall Street Outlook Ahead

From an external-cues perspective, the U.S. employment report will be the key event to watch, particularly after stronger-than-expected third-quarter GDP growth reinforced expectations that monetary policy could remain restrictive for longer. With economic activity holding firm and inflationary pressures still persistent, the labour-market data will offer important clues on how long the Federal Reserve may need to maintain its current policy stance, as per Hariselvan Radhakrishnan, Founder & CEO of HST Wealth.

He added that strong hiring and wage growth could strengthen expectations of prolonged monetary restraint, putting upward pressure on Treasury yields and the dollar and potentially weighing on emerging-market flows. Conversely, a measured cooling in employment and wage growth could ease concerns about persistent inflation and allow yields to moderate. ISM surveys and job-openings data will provide additional insight into the strength of economic activity and labour-market conditions ahead of the employment report.

Additionally, Brent crude ended the week near $117 a barrel, keeping the duration of the oil shock at the centre of the market outlook. The upcoming OPEC+ review will be closely watched for signals of a potential supply response, although geopolitical developments are likely to remain the more immediate driver of prices.

As per the expert, a sustained decline in crude would improve the prospects for a broader and more durable equity recovery, while prices remaining elevated could keep pressure on consumption-sensitive and energy-intensive businesses.

Meanwhile, the U.S. 10-year Treasury yield near 4.9% offers some support to equity valuations, but a sustained improvement in foreign investor sentiment will also depend on stable global markets and contained bond yields.

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