U.S. stocks closed lower across the board on Oct. 30, with tech earnings week ending in a sharp sell-off. The Philadelphia Semiconductor Index fell 7.2%, the Nasdaq dropped 2.9%, the S&P 500 lost 1.8%, and the Dow Jones Industrial Average slipped 1.1%.
Intel led the decline with a 28.6% drop
Intel was the biggest laggard of the session, falling 28.6% from the previous day’s close of $92.07 to $65.76. CNBC reported during trading that the stock was on track for its biggest one-day decline since 1974 and its second-largest single-day drop on record. The closing prices cited in the report were taken from Yahoo Finance, with percentage moves measured against the Oct. 29 close.
Fourth-quarter guidance missed expectations
Intel’s fourth-quarter outlook called for revenue of $15 billion to $16 billion and adjusted earnings per share of $0.25, both below market expectations of $17.1 billion and $0.43.
Chief Financial Officer David Zinsner said weakness in the PC market would last 「at least through the first half of next year」, and said rising prices for components such as memory were weighing on PC shipments.
The guidance also reflected the impact of an explosion-related shutdown at an Israel wafer plant this month. Zinsner said that would reduce company revenue by about $600 million over two quarters.
According to CNBC, Intel shares had already risen about 150% this year before the earnings release. D.A. Davidson downgraded the stock to Neutral from Buy on Friday, with a note titled 「Not Fixed Yet」. CNBC also estimated during trading that the value of the U.S. government’s roughly 10% stake in Intel fell by about $12 billion that day.
Chip stocks fell across the sector
Intel’s decline weighed on the broader semiconductor group. Qualcomm fell 11.1%, Broadcom lost 5.5%, and Nvidia dropped 4.2%. The Philadelphia Semiconductor Index ended the day down 7.2% at 10,688.8.
CNBC said the market was again questioning the strength of the AI trade. The VanEck Semiconductor ETF (SMH) also fell about 7% on the day.
Alphabet lost about 14% over two sessions
Alphabet had posted its biggest one-day decline on record on Thursday, then fell another 1.4% on Friday to close at $279.84. Over two sessions, the stock dropped about 14% from $324.89. Amazon, whose earnings also missed expectations, fell 1.4% on Friday.
CNBC had previously reported that Google and Microsoft did not raise their capital expenditure forecasts this quarter, pushing investors to focus on when AI spending by major tech companies would begin to pay off. Raymond James chief market strategist Matt Orton told CNBC that he did not see this as a 「moment of liquidation」, but said investors should consider whether positioning in the group had become too crowded even with strong fundamentals.
Crypto market faced a major hack on the same day
On the same day, the crypto market was dealing with what the report described as the largest hack on record. Binance’s hot wallet was hacked, with total impact estimated at about $6.3 billion.
