By Stephen Culp and Purvi Agarwal
NEW YORK, Oct 30 (Reuters) - US stocks tumbled on Friday, with the Nasdaq suffering its largest one-day percentage drop since June 5 following disappointing quarterly results from Intel and Amazon, which amplified growing worries surrounding AI-related companies' massive spending on the nascent technology.
All three major US stock indexes slumped, with the tech-heavy Nasdaq suffering the steepest loss.
The tech rout was sparked by disappointing quarterly results from
Intel and Amazon released late on Thursday.
Chip stocks veered sharply lower, dragging the Philadelphia SE Semiconductor Index to a monthly loss.
"It's fair to say that this week, not just today, has been very much about the future of AI and what that's going to look like, whether there will be a positive return on investment and if so, how quickly," said Oliver Pursche, senior vice president at Wealthspire Advisors in New York.
"Companies that are performing and meeting the very lofty expectations that have been set are doing well," Pursche added. "Those that are falling short and seem to be missing the mark or not executing as expected are getting punished."
All three main equity indexes closed lower on the week. The S&P 500 and the Nasdaq logged monthly losses, while the Dow exited October with a gain.
According to preliminary data, the S&P 500 lost 139.30 points, or 1.80%, to end at 7,580.21 points, while the Nasdaq Composite lost 747.73 points, or 2.84%, to 25,440.68. The Dow Jones Industrial Average fell 571.98 points, or 1.09%, to 51,770.58.
Third-quarter earnings season has passed the halfway mark, with 299 companies in the S&P 500 having reported. Of those, 82% have beaten consensus expectations, according to LSEG data.
Analysts now expect third-quarter S&P 500 earnings growth of 31.6%, year-on-year, per LSEG.
Oil supermajors Exxon Mobil and Chevron both beat quarterly profit expectations, benefiting from soaring profit margins as a result of energy supply disruptions arising from the US-Israeli war with Iran and Russia's war in Ukraine.
Starbucks dipped after the coffee chain forecast an annual revenue decline due to its divestiture of its Chinese business.
Cryptocurrency-related firms Coinbase, Strategy, and Robinhood fell in the wake of reports that hackers stole $6.3 billion from Binance, the world's biggest cryptocurrency exchange.
(Reporting by Stephen Culp in New York; Additional reporting by Shashwat Chauhan, Tharuniyaa Lakshmi and Purvi Agarwal in Bengaluru; Editing by Matthew Lewis)
