Market Analysis
Markets This Week: Tech Selloff, Midterms, Jobs
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Market Analysis
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Markets This Week: Big Tech AI Spending Fears
StockCram Editorial9 min readWeak results from Alphabet, Amazon and Intel hit AI stocks, and the Nasdaq fell 2.0% this week while oil stayed above $100.
Week of Monday, October 26, 2026 - Friday, October 30, 2026
Key Themes This Week
- •Stocks rose early in the week after Anthropic filed to go public. They fell sharply on Thursday and Friday after Alphabet, Amazon and Intel posted weak results. Investors worried that huge AI spending is not yet paying off. The Nasdaq ended October about 7.8% below its record close of October 6.
- •The Federal Reserve held rates at 3.75% to 4% on Wednesday in a 10-2 vote. Two officials wanted a hike. Data showed the economy grew 3.4% in the third quarter, but inflation stayed sticky. Market watchers noted the mix keeps interest rates in focus.
- •Oil stayed above $100 a barrel. A tanker was hit in the Strait of Hormuz on Friday, and the Iran war has entered its eighth month. Gold fell to its lowest level of 2026, and small-company stocks held up better than big tech for the week.
Weekly Market Performance
S&P 500
-0.6%
7,580.07
Nasdaq
-2.0%
25,437.00
Dow Jones
-0.8%
51,770.31
Russell 2000
+1.3%
2,811.84
Market Snapshot
VIX (fear gauge)
19.42
+12.9% on Friday (weekly change not confirmed)
10Y Yield
4.93%
-0.06 points
WTI Oil
$104.12
+1.0%
Gold
$3,899
-2.7%
US Dollar
101.96
Little changed
Key Themes This Week
AI Spending Meets Investor Doubt
Anthropic's IPO filing on Monday lifted chip stocks. Then Alphabet reported negative free cash flow and fell about 12% on Thursday, its worst day on record. Amazon and Intel disappointed after the close, and Intel fell 28.6% on Friday.
Market Impact
Chip stocks dropped sharply and the semiconductor index lost 7.2% on Friday. Some analysts said companies that miss very high expectations are being punished. Others pointed to strong cloud growth, such as AWS up 39%, as a sign demand remains solid.
A Divided Fed and Sticky Inflation
The Fed held rates on Wednesday, with Beth Hammack and Lisa Cook dissenting in favor of a hike. September's core PCE inflation (the Fed's preferred gauge) was 3.1%. Third-quarter growth came in at 3.4%.
Market Impact
Traders put the odds of a December rate hike very high, according to one market-data site. Supporters of the economy's strength see resilience. Skeptics worry that higher borrowing costs could add pressure to richly valued tech shares.
Middle East Tensions Keep Oil Elevated
A tanker in the Strait of Hormuz was hit by explosive devices on Friday. Traders are also watching the US midterm elections on November 3. WTI crude settled at $104.12.
Market Impact
Energy shares held up better than the rest of the market. Higher fuel costs also feed inflation worries. Some analysts expect prices to stay volatile in the near term, while others note supply from Saudi Arabia has continued.
Top Stories
Alphabet Has Its Worst Day on Record
What Happened
Alphabet reported third-quarter revenue up 25% to $127.6 billion. It also reported negative free cash flow and said spending on data centers will rise significantly in 2027. Its shares fell about 12% on Thursday, erasing roughly $500 billion in market value.
Market Reaction
The drop dragged on the Nasdaq and set the tone for Friday's selloff. Alphabet slipped another 1.4% on Friday and had its worst month on record.
Bullish View
Some analysts pointed to cloud growth of 103% and strong revenue as signs the business is still expanding.
Bearish View
Other analysts noted that spending is rising faster than cash generation. Per-share earnings also fell about 26% from a year earlier as new shares were issued.
Intel and Amazon Results Deepen the Tech Selloff
What Happened
Intel gave weak fourth-quarter guidance and blamed PC weakness tied to higher memory chip costs. Its stock fell 28.6% on Friday, its worst day since 1974. Amazon missed revenue and earnings estimates and reported negative free cash flow of $42.4 billion over 12 months.
Market Reaction
AMD fell 10.9%, Dell 10.8% and HP 9.6%. Amazon cut its early losses and ended Friday down 1.4%.
Bullish View
Some analysts called Amazon's reaction an expectations miss, noting AWS grew 39%, its sixth straight quarter of faster growth, and that management guided for 40%+ growth.
Bearish View
Cautious voices said AI spending now exceeds what many of these firms earn in cash. They noted that stress could spread to credit markets, where CoreWeave's bond yields have climbed near 15%.
Fed Holds Rates in a Split Vote
What Happened
The Fed left its target range at 3.75% to 4% on Wednesday. The vote was 10-2, and both dissenters favored a rate hike. Chair Kevin Warsh said politics played no role and that the Fed will hold fewer rate-setting meetings next year.
Market Reaction
Stocks barely moved after the announcement. Treasury yields drifted lower later in the week as tech stocks fell.
Bullish View
Some observers saw the pause as a sign the Fed is not rushing to tighten further, with solid growth supporting the economy.
Bearish View
Others noted two dissents toward a hike and inflation of 3.6% on the PCE measure, which keeps more tightening on the table.
Hormuz Tanker Attack Lifts Oil
What Happened
A tanker in the Strait of Hormuz was hit by explosive devices on Friday, according to the UKMTO. Houthi attacks on Saudi Arabia also raised supply worries.
Market Reaction
WTI rose 2.1% on Friday to $104.12, a six-month high. WTI gained about 15% in October, and Brent rose about 14%.
Bullish View
Some analysts expect diplomacy to ease supply fears. Iran's government said it welcomes talks, and President Trump said the conflict will wrap up soon.
Bearish View
Other analysts cited a lack of a clear diplomatic path and possible escalation after the midterm elections.
Sector Performance
Winners
Energy
Higher on Friday (weekly figure not tallied)Oil prices stayed above $100. Exxon and Chevron rose after beating earnings estimates on strong refining margins.
Consumer Staples and Defensive Names
Modest gains on Friday (weekly figure not tallied)Walmart and Costco rose about 1.8% on Friday as money moved away from tech.
Laggards
Semiconductors
-7.2% on Friday; more than -15% for OctoberIntel's weak outlook and AI spending doubts hit chipmakers broadly.
Communication Services and Technology
Worst monthly drops in years (weekly figure not tallied)Alphabet and Meta fell on spending worries. The S&P 500 tech sector had its biggest monthly loss since March 2025.
Top Stock Movers
Gainers
XOMExxon Mobil
+2.1% (Friday premarket)Earnings beat estimates on strong refining margins. Weekly change was not tallied.
CVXChevron
+1.7% (Friday premarket)Chevron also topped estimates as fuel-making profits rose. Weekly change was not tallied.
WMTWalmart
+1.9% (Friday)Defensive consumer names attracted interest as tech sold off. Weekly change was not tallied.
Decliners
INTCIntel
-28.6% (Friday)Weak fourth-quarter guidance tied to PC demand and higher memory costs. It was the stock's worst day since 1974.
GOOGLAlphabet
-12.6% (Thursday)Negative free cash flow and heavy spending plans overshadowed 25% revenue growth. It was the stock's worst day on record.
AMDAdvanced Micro Devices
-10.9% (Friday)Chip stocks sold off after Intel's outlook.
DELLDell Technologies
-10.8% (Friday)AI server names fell on worries about spending and the memory-cost squeeze.
Economic Data Released
Third-Quarter GDP (advance estimate)+3.4% annualized
Expected: +3.1%
The economy grew faster than forecast, up from 2.2% in the second quarter. Some see resilience, while others link strong growth to continued pressure on the Fed.
September PCE Inflation3.6% headline, 3.1% core (year over year)
Expected: Above the Fed's 2% goal
Inflation picked up in September. Core prices rose 0.3% on the month, which kept talk of a further rate hike alive.
Federal Reserve DecisionHeld at 3.75%-4%, 10-2 vote
Expected: Hold widely expected (about 90% odds)
The hold was expected, but two dissents for a hike showed a divided committee.
Employment Cost Index (Q3)+0.8% quarter over quarter
Expected: +0.8%
Wage costs matched forecasts. Wages and salaries rose 0.7%, slower than the prior quarter. That offered a small sign of easing labor costs.
Historical Perspective
Comparison
Nasdaq's 7.8% pullback from its record is smaller than the 10% drop that defines a correction. Its worst month since March 2025 shows how fast sentiment can shift after strong runs.
Perspective
Historically, markets have often swung sharply during earnings seasons when expectations were high. Pullbacks have been common even in long uptrends. Learning about managing risk can help put weeks like this in context.
Breaking Developments
Strait of Hormuz Tanker Attack Amid Iran Wargeopolitical
Friday, October 30, 2026
A tanker in the Strait of Hormuz was hit by explosive devices attached by a small boat. The US-Israeli war on Iran has entered its eighth month, and the US has said it could renew strikes.
Market Relevance
WTI settled at $104.12 and Brent near $113 (January contract), the highest levels since April. Gold fell as higher oil kept inflation and yield worries alive.
EnergyAirlinesShippingConsumer Discretionary
Ongoing. Traders are watching the November 3 US midterm elections and any diplomatic talks.
Anthropic Files for IPOcorporate
Monday, October 26, 2026
Anthropic publicly filed to list on the Nasdaq under the ticker ANT. The filing showed fast revenue growth alongside about $80 billion in first-half losses.
Market Relevance
Chip and AI shares rose Monday on the news, but those gains faded after Big Tech earnings.
TechnologySemiconductorsCloud Computing
Ongoing. The offering timing and market conditions remain uncertain.
Meta Plans Up to $95 Billion Equity Raisecorporate
Monday, October 26, 2026
Meta said it plans to raise up to $95 billion in equity to fund data centers and AI infrastructure. It also raised its 2026 capital spending guidance.
Market Relevance
The move added to worries about how Big Tech funds AI. Meta's stock was mixed during the week.
Communication ServicesTechnology
Ongoing. Funding costs and share dilution are being watched.
Record Hack at Binancefinancial
Week of October 26, 2026
A record hack at crypto exchange Binance weighed on digital assets.
Market Relevance
Bitcoin fell more than 4% for the week and traded near $77,300 on Friday.
Crypto-related stocksFinancials
Details and customer impact may continue to emerge.
Sources
- • Reuters (2026-10-30)
- • CNN (2026-10-30)
- • Yahoo Finance (2026-10-30)
- • CNBC (2026-10-30)
- • Kitco (2026-10-30)
- • CNBC (2026-10-29)
- • Quartz (2026-10-29)
- • CNBC (2026-10-28)
- • Reuters (2026-10-26)
Disclaimer: This weekly recap is for educational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always consult with a qualified financial advisor before making investment decisions.