News from the IT home on October 31st: According to Reuters, the market performance on the last trading day of October was quite dismal, with technology stocks, which have been on the rise since the beginning of this year, facing another test.
On the 30th local time, the Nasdaq Composite Index recorded its largest one-day decline in six months. Intel and the social media platform Reddit both saw a 29% drop in their stock prices, and SanDisk, a chip manufacturer and one of the key beneficiaries of the boom in AI infrastructure investment, also experienced a 13% decline.
This round of selling occurred after a series of declines in the stocks of major tech companies this week. Core participants in infrastructure construction, such as Microsoft, Meta, Amazon, and Google's parent company Alphabet, saw their stock prices fall another 1% to 2% on Friday, following a clear decline earlier in the week.
Caitou Macro pointed out that in the past 12 months, the capital expenditures of four super-large technology companies—Microsoft, Meta, Amazon, and Alphabet—have accounted for more than one-third of the total capital expenditures of the current constituents of the S&P 500 index.
The institution expects that this proportion will continue to rise, but investors are becoming increasingly uneasy about this trend. John Higgins, a macroeconomic market economist at CaiTou, believes: "The huge capital expenditures of the giants are beginning to rely partially on external financing, and investors are growing more concerned about how much money they are actually investing and through what means these investments are being funded."
The Nasdaq 100 index saw an even larger decline on Friday, ultimately falling by 3.5%, which is a 10% drop from its recent high and brings it closer to entering a technical adjustment zone. The Nasdaq Composite Index fell by 7.8% from its previous closing high. October has become the worst month for this index since March 2025, and some of the gains accumulated this year by AI have also evaporated as a result.
Annex Wealth Management Chief Economic Strategist Brian Jacobsen pointed out: "Investors suddenly began to vote with their actions collectively, determining which companies will ultimately make money from these investments and which ones will not."
The sell-off was not limited to tech stocks. Previously, tech stocks had been on the rise driven by optimistic market sentiment, but this time there was a broader withdrawal of risk assets from the market, which also led to an increase in the price of U.S. Treasury bonds. Silver fell by 6% in a single day, with the year-to-date decline expanding to 31%; gold fell by 3.5%, with a cumulative decline of 10% since 2026.
However, in the eyes of some investors, the recent selling in the stock market seems to be just a normal correction after the previous excessive gains.
Sahak Manueilian, the Managing Director of the Global Equity Sales and Trading Department at Wedbush Securities, does not believe that this time it is mainly a leverage issue, and even goes further to say that it "cannot be considered particularly serious." The reason for this is that the entire sector had risen too much before. "The market had been rising almost in a straight line before, so the subsequent decline was naturally very sharp. I think that's exactly the situation we're facing now. Moreover, some investors have already begun to withdraw their funds and turn to other markets."
Oil prices rose by 2%, further deepening market concerns about the outlook for the U.S. economy. Many investors believe that the growth momentum of the U.S. economy relies to a large extent on AI infrastructure construction. Financial stocks were not spared either, with Goldman Sachs falling by 4% and JPMorgan Chase dropping by 6%. Meanwhile, hackers stole over $6 billion from Binance (Note from the editor: at current exchange rates, this is approximately 40.017 billion yuan), causing Bitcoin to fall by 3% as a result.
What investors are concerned about at the moment is whether the market will be able to stabilize again after entering November. After the intense selling on Friday, many chose to exit the market to avoid risks rather than holding their positions throughout the weekend, waiting for further signals from the market.
