U.S. stocks ended last Friday on a deeply negative note, and this time the culprit was none other than the artificial intelligence narrative itself.
First, the numbers: At the close in the early hours of October 31 Beijing time, the Dow Jones Industrial Average fell 1.09% to 51,770.31, the S&P 500 fell 1.82% to 7,580.07, and the Nasdaq Composite fell 2.86% to 25,437. The Nasdaq Composite and S&P 500 both posted their third consecutive weekly losses. Since setting a record closing high on October 6, the Nasdaq Composite has fallen 7.8%. ETFs tracking the Nasdaq 100 dropped about 3.47% in a single day, and have pulled back nearly 10% from their early-October highs, approaching correction territory—a decline of 10% from a high is generally considered a correction.
The catalysts were two earnings reports. Intel’s quarterly results, released Thursday evening, disappointed. Its stock plunged 28.6% on Friday, wiping out more than $140 billion in market value and marking the company’s second-largest single-day decline on record, behind only its 29.9% drop on July 5, 1974. The Philadelphia Semiconductor Index fell 7.2% in a single day; SanDisk slid more than 13%, Qualcomm fell more than 11%, and Advanced Micro Devices dropped more than 10%, as memory stocks tumbled across the board. Nvidia fell more than 4%, losing $217 billion in market value in a single day, or about 1.4 trillion yuan. Apple closed with a market capitalization of $5.03 trillion, overtaking Nvidia at $4.93 trillion to become the world’s most valuable company again for the first time since late July.
The most telling thing about this sell-off is not the size of the losses, but where the money is going. Of the S&P 500’s 11 sectors last week, only Communication Services and Information Technology fell, dropping 8.5% and 1.8%, respectively. Communication Services posted its biggest monthly decline since April 2022. Healthcare led the way, rising 3.1%, followed by Materials and Utilities, each up about 2%. Data from the London Stock Exchange Group showed that U.S. equity funds saw net outflows of $6.65 billion last week, while net outflows from individual stocks reached a record $14.8 billion. Institutional net selling for the week hit its 10th-highest level since 2008. In plain English: institutions aren’t just rebalancing their portfolios; they’re voting with their feet and retreating from the AI trade.
What’s interesting, though, is that the fundamentals haven’t collapsed. U.S. third-quarter GDP grew at an annualized rate of 3.4%, exceeding expectations. Consumer spending rose a robust 3.8%, while business investment in equipment climbed 20.9%. The Federal Reserve stood pat last week, saying it needed more information before considering any policy changes. The economic data is hot, but stocks are falling. That suggests the market isn’t selling off because of the economy, but because of a valuation problem: gains driven by Anthropic’s IPO announcement and the Fed holding rates steady were wiped out by concerns about the financing and financial returns needed to support the AI investment theme at the heart of the U.S. bull market. Put simply, people are starting to wonder when all the money poured into AI will actually pay off.
The chain reaction is clear: Intel’s earnings shock was just the spark; the real fire is the old question of returns on AI capital spending. Nvidia fell, the Philadelphia Semiconductor Index dropped 7.2%, and memory stocks crashed across the board, showing that the sell-off has spread from one company to the entire AI hardware chain. Meanwhile, money has moved into healthcare and utilities, indicating this isn’t dip-buying—it’s a genuine flight to safety. Timing is also crucial: the Nasdaq Composite is already down 7.8% from its high, just one step away from a 10% technical correction, and October also saw its worst monthly performance in more than a year. If a correction is confirmed, algorithmic selling and stop-loss orders could take over and push the market further down.
Next week will be the real test: Palantir Technologies and Apple report after the market closes on November 2, the U.S. midterm elections take place on November 3, and the nonfarm payrolls report comes out on November 6. If Apple’s results also fail to support the AI narrative, a further drop that takes the Nasdaq Composite into correction territory will be all but inevitable. On the other hand, if Apple delivers an answer that convinces the market, this 7.8% pullback could prove to be just a healthy shakeout.
Put simply: this sell-off isn’t about the U.S. economy; it’s about how the AI story is being priced. As long as the story holds, stocks rise on faith. Once people start doing the math, valuations fall. In the near term, keep an eye on the Nasdaq Composite’s 25,000-point threshold. If it fails to hold, the correction will officially be underway.
#美股 #Intel
First, the numbers: At the close in the early hours of October 31 Beijing time, the Dow Jones Industrial Average fell 1.09% to 51,770.31, the S&P 500 fell 1.82% to 7,580.07, and the Nasdaq Composite fell 2.86% to 25,437. The Nasdaq Composite and S&P 500 both posted their third consecutive weekly losses. Since setting a record closing high on October 6, the Nasdaq Composite has fallen 7.8%. ETFs tracking the Nasdaq 100 dropped about 3.47% in a single day, and have pulled back nearly 10% from their early-October highs, approaching correction territory—a decline of 10% from a high is generally considered a correction.
The catalysts were two earnings reports. Intel’s quarterly results, released Thursday evening, disappointed. Its stock plunged 28.6% on Friday, wiping out more than $140 billion in market value and marking the company’s second-largest single-day decline on record, behind only its 29.9% drop on July 5, 1974. The Philadelphia Semiconductor Index fell 7.2% in a single day; SanDisk slid more than 13%, Qualcomm fell more than 11%, and Advanced Micro Devices dropped more than 10%, as memory stocks tumbled across the board. Nvidia fell more than 4%, losing $217 billion in market value in a single day, or about 1.4 trillion yuan. Apple closed with a market capitalization of $5.03 trillion, overtaking Nvidia at $4.93 trillion to become the world’s most valuable company again for the first time since late July.
The most telling thing about this sell-off is not the size of the losses, but where the money is going. Of the S&P 500’s 11 sectors last week, only Communication Services and Information Technology fell, dropping 8.5% and 1.8%, respectively. Communication Services posted its biggest monthly decline since April 2022. Healthcare led the way, rising 3.1%, followed by Materials and Utilities, each up about 2%. Data from the London Stock Exchange Group showed that U.S. equity funds saw net outflows of $6.65 billion last week, while net outflows from individual stocks reached a record $14.8 billion. Institutional net selling for the week hit its 10th-highest level since 2008. In plain English: institutions aren’t just rebalancing their portfolios; they’re voting with their feet and retreating from the AI trade.
What’s interesting, though, is that the fundamentals haven’t collapsed. U.S. third-quarter GDP grew at an annualized rate of 3.4%, exceeding expectations. Consumer spending rose a robust 3.8%, while business investment in equipment climbed 20.9%. The Federal Reserve stood pat last week, saying it needed more information before considering any policy changes. The economic data is hot, but stocks are falling. That suggests the market isn’t selling off because of the economy, but because of a valuation problem: gains driven by Anthropic’s IPO announcement and the Fed holding rates steady were wiped out by concerns about the financing and financial returns needed to support the AI investment theme at the heart of the U.S. bull market. Put simply, people are starting to wonder when all the money poured into AI will actually pay off.
The chain reaction is clear: Intel’s earnings shock was just the spark; the real fire is the old question of returns on AI capital spending. Nvidia fell, the Philadelphia Semiconductor Index dropped 7.2%, and memory stocks crashed across the board, showing that the sell-off has spread from one company to the entire AI hardware chain. Meanwhile, money has moved into healthcare and utilities, indicating this isn’t dip-buying—it’s a genuine flight to safety. Timing is also crucial: the Nasdaq Composite is already down 7.8% from its high, just one step away from a 10% technical correction, and October also saw its worst monthly performance in more than a year. If a correction is confirmed, algorithmic selling and stop-loss orders could take over and push the market further down.
Next week will be the real test: Palantir Technologies and Apple report after the market closes on November 2, the U.S. midterm elections take place on November 3, and the nonfarm payrolls report comes out on November 6. If Apple’s results also fail to support the AI narrative, a further drop that takes the Nasdaq Composite into correction territory will be all but inevitable. On the other hand, if Apple delivers an answer that convinces the market, this 7.8% pullback could prove to be just a healthy shakeout.
Put simply: this sell-off isn’t about the U.S. economy; it’s about how the AI story is being priced. As long as the story holds, stocks rise on faith. Once people start doing the math, valuations fall. In the near term, keep an eye on the Nasdaq Composite’s 25,000-point threshold. If it fails to hold, the correction will officially be underway.
#美股 #Intel