Wall Street Opens Lower as Amazon and Intel Earnings Deepen AI Worries
Wall Street opened lower on Friday, with losses concentrated in technology stocks. Nasdaq 100 futures fell 2.5 percent before the opening bell, S&P 500 futures fell 1 percent, and Dow Jones Industrial Average futures were little changed, as investors weighed the latest round of big technology earnings.
The selling extended a bruising session on Thursday, when Alphabet fell 12.6 percent, its largest one-day percentage decline on record, erasing more than $500 billion in market value. The Nasdaq Composite fell 1.4 percent on Thursday while the S&P 500 slipped 0.3 percent and the Dow lost 0.3 percent. Nine of the 11 sectors in the S&P 500 rose on Thursday, a sign the damage was concentrated in technology.
Amazon reported third-quarter revenue of $201.9 billion and earnings of $1.89 a share, both below Wall Street estimates. Cloud revenue at Amazon Web Services jumped 39 percent to $46 billion, but investors focused on cash. Trailing 12-month free cash flow swung to a $42.4 billion outflow, and Amazon kept its plan for about $220 billion in capital spending in 2026. Amazon shares fell about 7 percent in premarket trading.
Intel beat third-quarter estimates, with revenue up 21 percent to $16.51 billion and adjusted earnings of 52 cents a share, but its fourth-quarter guidance fell well short of expectations. Intel projected revenue of $15 billion to $16 billion and adjusted earnings of 25 cents a share, against expectations of about $17 billion in revenue and 44 cents a share, citing weakness in the personal computer market and manufacturing constraints. Intel shares plunged 25 percent in premarket trading.
The selling spread across chip and internet stocks. Advanced Micro Devices fell about 9 percent in premarket trading, Nvidia about 3 percent and Broadcom about 4 percent. SanDisk fell about 9 percent even after beating estimates and raising its outlook, and Dell fell 12 percent. Reddit plunged 21 percent after warning that daily users could fall by a low-double-digit percentage in the fourth quarter if search referrals keep declining.
Energy stocks pushed the other way. Exxon Mobil and Chevron both beat third-quarter profit estimates as soaring refining margins lifted earnings from fuel-making, Reuters reported. Exxon reported adjusted earnings of $4.23 a share, above the $4.12 average estimate, and Chevron earned $5.28 a share on an adjusted basis. Their shares rose 2 percent and 1 percent in premarket trading.
Oil prices also rose. Attacks on Saudi Arabia by Yemen’s Houthis raised concerns about supply disruptions, TipRanks reported.
The morning’s economic data did not drive the selling. The Employment Cost Index rose 0.8 percent in the third quarter, in line with economists’ expectations, according to Reuters, the Bureau of Labor Statistics reported, and total compensation was up 3.4 percent from a year earlier. Traders priced in about a 75 percent probability of a December interest rate increase, according to the CME FedWatch Tool, down slightly from 84 percent the previous day.
Friday is the final trading day of a bruising month for artificial intelligence stocks, as investors scrutinize the enormous cost of the AI boom and demand evidence that the spending will translate into profit, CNN reported.
