Stocks fall as investors question big AI spending returns

In short: US stocks fell sharply after a sell-off in technology shares revived worries that huge AI spending may not pay off soon.

What's going on

On Friday, October 30, 2026, the S&P 500 fell 1.8%. It was its worst daily drop since June. The technology sector was the main reason, falling 4.2%.

The Nasdaq, which is packed with tech companies, fell 2.9%. Nvidia fell 4.2%, and it was the biggest single factor pulling down the S&P 500 that day.

Some of the pressure came from company updates that made investors nervous about spending. Intel shares dropped almost 29% after the company gave a weak outlook. Amazon also drew attention after reporting a $42.4 billion free cash flow outflow over the last 12 months, meaning more cash went out than came in from running the business. Amazon also reported $94.8 billion in spending on property and equipment, with much of it tied to AI, such as data centers (large buildings filled with computers, like warehouses for computing power).

Alphabet had fallen sharply the previous day after it reported heavier cash spending as well. Together, these results added to a broader fear that companies are putting hundreds of billions of dollars into AI infrastructure before they can clearly show the financial payoff.

What to watch

Investors are also watching interest rates. If borrowing stays expensive, it can be harder for companies to finance even more data centers and related AI build-outs, especially if profits do not rise fast enough to justify the cost.

Source: NYTimes