Key Highlights

● The Nasdaq Composite closed October at 25,437.00.

● It lost about 1,424 points from September's close of 26,861.06.

● It was the worst month since March 2025.

● The slide snapped a two-month winning streak.

The Nasdaq Composite closed October at 25,437.00, down about 1,424 points from its September 30 finish of 26,861.06. According to market data, it was the index's worst month since March 2025, and market data noted that the slide snapped a two-month winning streak.

The final session did much of the damage. On Friday, October 30, 2026, the Composite fell 747.73 points, its largest one-day drop since June 5. It was also the index's third straight weekly loss, according to market data, with the Composite down 518.34 points from its October 23 close.

Big tech's spending problem

The late-month slide centered on how much the largest companies are spending on artificial intelligence. Meta (NASDAQ:META) reported its first negative quarterly free Cash Flow in more than a decade the previous week. Alphabet (NASDAQ:GOOGL) followed on Wednesday night with free cash flow of negative $9.1 billion against expectations of negative $3.5 billion, and on Thursday the stock had its worst day ever, losing about $500 billion in market value.

Amazon (NASDAQ:AMZN)'s report on Thursday night showed trailing 12-month free cash flow of negative $42.4 billion, and the company signaled another increase in Capital spending next year. Intel (NASDAQ:INTC) then warned of cash burn this year and gave a fourth-quarter outlook that fell short, sending its shares to their biggest one-day drop on record, according to market data. The company cited a weak PC market tied to higher memory prices, Manufacturing bottlenecks and a factory accident in Israel.

Value erased

The losses were concentrated in the biggest names. The Nasdaq-100 lost roughly $2 trillion in Market Value in October, according to market data. The Philadelphia Semiconductor index fell steeply for the month and closed on Friday at 10,688.80, and Meta and Alphabet both ended well below their 52-week highs, according to market data. The communication services sector, home to Alphabet and Meta, had its worst month since April 2022, according to market data.

Elsewhere, a different story

The pain was not universal. Investors moved money out of AI, semiconductor and megacap tech shares and into energy, consumer staples, health care and utilities, a rotation that left other benchmarks in far better shape. Nine of the 11 S&P 500 sectors rose in October, with energy, health care, utilities and consumer staples posting strong gains, according to market data. The Dow finished the month up about 864 points and the Russell 2000 edged up about 15 points, while the S&P 500 slipped about 71.5 points.

"The love-hate relationship with tech and AI continues, and investors are becoming more discerning following earnings," a senior market strategist said. "This could remain a significant headwind for the Nasdaq," a senior market analyst said.

What to watch

Apple (NASDAQ:AAPL), which has not yet reported and whose shares have climbed sharply this year, posts results on Monday, November 2. The midterm elections on Tuesday, November 3, carry implications for the AI trade. "I think that will be seen as negative for both the AI names," an Investment manager said of a possible Democratic sweep, according to market data.

The October jobs report follows on Friday, November 6, with the Federal Reserve's December meeting looming after traders priced in a likely rate hike. The strategist also said the tech decline "does not appear abnormal" compared with earlier bull-market pullbacks, and the Nasdaq remains up 2,195.01 points for the year despite October's setback.