Nasdaq falls 2.9%, its worst day since June, as Intel sinks 29%

Intel led the drop: Intel shares closed down almost 29%, their worst day since 1974, CNBC and AP reported. The chipmaker forecast fourth-quarter revenue of $15 billion to $16 billion, below the $17.07 billion analysts expected, according to LSEG data cited by Reuters, and its finance chief, David Zinsner, said Intel does not expect positive cash flow this year. Zinsner said he sees the PC slowdown continuing at least through the first half of next year, BBC reported. Revenue in Intel's PC chip group fell 5% from a year earlier to $8.1 billion, CNBC reported.

Who else fell: AMD dropped close to 11%, Broadcom about 5% and Nvidia about 4%, and data-storage maker Sandisk fell 13% even though its results beat estimates, CNBC reported. Amazon lost more than 1% after a third-quarter earnings miss and negative free cash flow of $42.4 billion, and Alphabet slid further after Thursday's record drop. Money moved into safer stocks: Walmart and Coca-Cola each rose more than 1%, and drugmakers Merck and Amgen gained, which kept the Dow's loss smaller.

How this week's AI report cards compare: Microsoft reported 48% growth in Azure, its cloud business, and capital spending that came in below forecasts; its finance chief, Amy Hood, said 'we still have demand that exceeds supply,' Fortune reported. Alphabet and Amazon, by contrast, both showed AI spending outrunning the cash their businesses bring in, and Intel added a weak PC outlook on top of heavy factory spending. Adding to the mood Friday, the Financial Times reported, citing unnamed sources, that Blackstone told investors AI lab Anthropic may not receive an investment-grade credit rating after its stock market debut, CNBC noted; that report has not been confirmed by the companies. Apple reports its results on Monday.

The strongest case that this is a warning sign: 'It's really been a horror show this morning and the real villain is AI spending,' Gene Goldman of Cetera told Reuters. Bank of America, UBS, Bernstein, Wells Fargo and Barclays all cut their Intel price targets, and D.A. Davidson downgraded the stock in a note titled 'Not fixed yet,' CNBC reported. 'There are real economy risks, and the market's picking up on that,' Keith Buchanan of Globalt told CNBC.

The strongest case that it's an overreaction: Demand for AI computing is still running ahead of supply, Microsoft says. Some analysts described Friday's move as broad selling rather than fresh bad news for every company. 'The market is in a sell first, ask questions later mood right now,' said Matt Britzman of Hargreaves Lansdown, adding that Intel's warning gave investors 'an easy excuse to take some money off the table across chip stocks,' Reuters reported. Energy stocks went the other way: Exxon and Chevron rose to record highs after strong quarterly profits, CNBC reported.

What's still unknown: Whether the selling spreads beyond tech next week, which brings Apple's results on Monday and the Nov. 3 midterm elections. CNBC said some investors were taking money off the table ahead of the vote. Rising oil prices are another pressure: Brent crude rose about 2.4% to roughly $117.60 a barrel at midday after a tanker was damaged in the Strait of Hormuz, CNBC reported.

Updated Oct. 30, 2:20 p.m. PT with closing figures. An earlier version used midday numbers (Nasdaq down about 2.6%, S&P 500 down 1.6%). Closing index levels are from Nasdaq's official index page and CNBC's close report. Intel's 'worst day since 1974' is from CNBC and AP. The $12 billion drop in the government's Intel stake is CNBC's midday estimate, and the 10-year yield and Brent figures are midday. The Blackstone-Anthropic item is an unconfirmed Financial Times report citing unnamed sources. The hero photo shows the Nasdaq studio in 2015, not Friday's trading. Not investment advice.