Key facts
- The Nasdaq 100's 6.7% October decline was its worst monthly performance since March 2025, according to Bloomberg.
- Alphabet shares fell 13% on Thursday, October 29, their biggest single-day decline, after weaker search revenue.
- Amazon's free cash flow deficit reached nearly $35 billion, against positive free cash flow of $430 million a year earlier.
- Meta's future spending commitments rose to $825 billion and Alphabet's exceeded $1 trillion.
- Five-year credit default swaps linked to Broadcom rose to 175.4 basis points, a record closing level, per Bloomberg.
- CDS trading volumes for the 10 largest hyperscalers and chipmakers rose more than eightfold in 2026 to $176 billion, Barclays' Jigar Patel told Bloomberg.
The global AI sell-off eased on Monday, with falling oil prices cited as lifting investors' moods and drawing them back to technology stocks, according to a report that did not date the event.
The rebound followed a 3.5% fall in the Nasdaq 100 on Friday, October 30, which took its October decline to 6.7%, its worst monthly performance since March 2025, according to Bloomberg. The S&P 500 declined 1.8% the same day. South Korea's Kospi fell 3.48% to close at 5,730.74 and Japan's Nikkei 225 dropped 2.1%, while the STOXX Europe 600 Technology index fell 2.75%.
The sell-off followed quarterly results from major technology companies. Alphabet shares fell 13% on Thursday, October 29, their biggest single-day decline, after results showed weaker-than-expected revenue from its core search business and a second consecutive quarter of negative free cash flow. Amazon shares declined 5.6% over Thursday and Friday after reporting a larger-than-expected free cash flow deficit. Intel shares fell 29% after issuing a revenue forecast below analysts' estimates, while Nvidia and Advanced Micro Devices declined 4.2% and 11%.
Three of the four major hyperscalers, Amazon, Meta Platforms and Alphabet, reported negative free cash flow in the latest quarter. Amazon's deficit reached nearly $35 billion, against positive free cash flow of $430 million a year earlier. Microsoft reported positive free cash flow of $18.6 billion. Meta's future spending commitments rose to $825 billion and Alphabet's exceeded $1 trillion.
Anthony Saglimbene, chief market strategist at Ameriprise, told Bloomberg that technology companies had moved from asset-light business models to asset-heavy operations, changing their cash flow profiles and how investors should value them.
Credit markets also showed strain. Five-year credit default swaps linked to Broadcom rose to 175.4 basis points, their highest closing level on record, according to Bloomberg. The measure for SpaceX rose to 266.5 basis points, its highest since trading began earlier in the year, and Alphabet's CDS rose to around 84 basis points. Trading volumes in CDS linked to the 10 largest hyperscalers and chipmakers rose more than eightfold in 2026 to $176 billion through the previous week, Barclays credit strategist Jigar Patel told Bloomberg.