Key Highlights

● ServiceNow suffered its worst day on record on Thursday, October 29, 2026.

● Fortinet slid steeply and Caterpillar fell sharply.

● The broader market held up on Thursday.

● The S&P 500 closed Thursday at 7,720.39.

The trouble for technology stocks began before Friday. On Thursday, October 29, ServiceNow (NYSE:NOW) suffered its worst day on record, plunging in a session that also saw Fortinet (NASDAQ:FTNT) slide steeply and Caterpillar (NYSE:CAT) fall sharply. The same day, Alphabet (NASDAQ:GOOGL) had the worst session in its history, losing about $500 billion in Market Value after reporting negative free Cash Flow of $9.1 billion and a search Revenue miss.

Remarkably, the broader market held up, a sign that investors were still picking their targets rather than selling everything. The S&P 500 closed Thursday at 7,720.39, the Dow at 52,342.56 and the Nasdaq Composite at 26,184.72. Advancing stocks on the New York Stock Exchange outnumbered decliners by 1.95 to 1, and the VIX Volatility index stood at 17.20. Volume of 17.05 billion shares was close to the 20-day average of 17.09 billion. The damage was severe but concentrated.

Friday's second wave

That changed after Thursday's close. Intel (NASDAQ:INTC) guided fourth-quarter revenue well below expectations and warned of cash burn, citing a weak PC market and Manufacturing hurdles. Amazon (NASDAQ:AMZN) reported trailing 12-month free cash flow of negative $42.4 billion and signaled heavier spending in 2027.

On Friday, October 30, 2026, selling spread across technology. The S&P 500 fell 140.32 points to 7,580.07, the Dow lost 572.25 points to 51,770.31, and the Nasdaq Composite dropped 747.73 points to 25,437.00, its worst day since June 5. The VIX rose to 19.42. Technology was the worst-performing sector.

Software joins the rout

Software stocks, already shaken by ServiceNow, fell again. Datadog (NASDAQ:DDOG) was among the S&P 500's worst performers, sliding sharply with no company-specific news in a broad software and AI-spending selloff. Cloudflare (NYSE:NET), Snowflake (NYSE:SNOW), MongoDB (NASDAQ:MDB), Okta (NASDAQ:OKTA), Shopify (NASDAQ:SHOP) and F5 (NASDAQ:FFIV) all moved lower with the sector. Fastly (NYSE:FSLY) and JFrog (NASDAQ:FROG) fell as well. AppLovin (NASDAQ:APP) dropped ahead of its own earnings.

Cybersecurity names, Fortinet's group, also weakened. Reports differed on how software fared during the day: Market data said software names were among the few gainers at one point, but a widely followed software fund closed lower.

Strategists tied the selling to rising doubts about AI spending and returns. "The love-hate relationship with tech and AI continues, and investors are becoming more discerning following earnings," a senior market strategist said. A senior market analyst said "strong AI Demand is no longer enough on its own."

Breadth worsened

Friday's selloff was broader than Thursday's. New 52-week lows rose to 448 from 230 a day earlier, while 162 stocks set new highs. Still, money moved into defensive areas rather than leaving the market entirely. Energy, consumer staples, utilities and health care rose, and six of 11 sectors finished higher.

The strategist offered some perspective, saying the tech decline "does not appear abnormal" compared with earlier bull-market pullbacks. An Investment strategist warned, though, that "The Earnings bar is very high."

What to watch

Several software and internet companies report next week. Palantir (NASDAQ:PLTR)'s results come Monday, November 2, after the close, and Datadog and AppLovin also report in the coming days. Their outlooks will show whether Thursday's carnage reflected company-specific problems or a broader reset in how investors value software.

Apple (NASDAQ:AAPL) also reports Monday, followed by the midterm elections on Tuesday and the October jobs report on Friday, November 6. Investors will be watching whether the rotation out of technology continues or whether bargain hunters step in after the week's losses.