U.S. stocks closed sharply lower on October 30 as investors reassessed the enormous cash demands of the artificial-intelligence buildout. Reuters reported that the Nasdaq Composite fell 2.84% to 25,440.68, its largest one-day percentage decline since June 5. The S&P 500 lost 1.80% and the Dow Jones Industrial Average fell 1.09%. Quarterly results from Amazon and Intel intensified the pressure by putting fresh attention on the gap between fast-growing AI-related demand and the capital required to supply it.

Amazon's growth came with a cash-flow warning

Amazon's official third-quarter release showed a business still expanding quickly. Net sales rose 12% from a year earlier to $201.9 billion, while Amazon Web Services revenue increased 39% to $46.0 billion. Operating income climbed to $28.1 billion and the company said its 13.9% operating margin was a record. The tension appeared in cash flow. Amazon reported a $42.4 billion free-cash-flow outflow for the trailing 12 months, compared with a $14.8 billion inflow a year earlier, primarily because property and equipment purchases rose by $94.8 billion as AI investment accelerated.

Related reporting: AI slowdown warnings send Nasdaq futures and chip stocks lower

Markets focused on the cost of the buildout

Amazon maintained that its infrastructure spending is supporting stronger AWS growth and said it still expects roughly $220 billion in 2026 cash capital expenditure. Investors nevertheless sold technology shares after the results, while Intel also declined following a quarter that Reuters described as showing heavy cash burn. Semiconductor shares weakened broadly, leaving the Philadelphia Semiconductor Index with a monthly loss. The reaction suggests that revenue growth alone is no longer enough to reassure markets when spending commitments are expanding at the same time.

The selloff was broad, not a verdict on every AI project

The October decline reflects a change in the questions investors are asking. Instead of focusing only on demand for cloud computing, chips and AI services, markets are testing how quickly those businesses can produce cash returns after data-center, power and equipment costs. That does not establish that AI investment will fail. Amazon's AWS growth and record operating margin provide evidence of strong operating demand. The market move shows that expectations, financing needs and the timing of returns now matter alongside sales growth.

Crypto-linked stocks also came under pressure

Reuters said Coinbase, Strategy and Robinhood fell during the session as reports of the Binance security incident added a separate source of risk for digital-asset equities. Those declines should not be attributed solely to the technology selloff: the affected companies have different business models and direct exposure to crypto-market activity. The overlap is still important because a risk-off move in high-growth technology shares can reduce investor tolerance for volatile crypto-linked stocks, especially when industry-specific security concerns are rising at the same time.

What to watch next

The immediate test is whether Amazon can convert its large infrastructure program into sustained AWS growth without keeping free cash flow deeply negative. Investors will also watch whether Intel's spending and operating pressures spread across the chip supply chain. Reuters noted that 82% of the 299 S&P 500 companies that had reported had beaten consensus estimates, so the session was not evidence of uniformly weak corporate earnings. The unresolved issue is valuation: strong results may still disappoint when market prices assume rapid returns from AI. Future earnings, capital-spending guidance and cash-flow trends will determine whether this was a short repricing or the start of a broader reassessment.

Sources

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