The Nasdaq Composite fell about 2.6% in midday trading in New York on Friday to its lowest level in nearly three months, as results from Intel and Amazon deepened worries about the cost of the artificial intelligence (AI) building boom.
The Nasdaq 100, the index of the exchange's 100 largest non-financial companies, fell about 3% and was on course to lose just over $1 trillion of market value on the day.
The broader S&P 500 fell about 1.5% and was heading for its worst day since June, while the Dow Jones Industrial Average, which is less exposed to tech, was down 0.7%.
Intel and chip stocks lead the fall
Intel, the chipmaker, fell about 29% after forecasting weak fourth quarter revenue and saying the PC slowdown should last at least through the first half of next year.
Nvidia, the AI chipmaker, fell almost 4% and AMD, its rival, lost more than 9%.
Amazon, the online retailer and cloud computing provider, pared an early 7% fall to trade about 2% lower after reporting quarterly capital expenditure of $77.3 billion, against forecasts of $58.7 billion.
Alphabet, the Google owner, fell a further 1% after losing about $480 billion of market value on Thursday.
Reddit, the social media platform, fell about 24% after weak user numbers, and Roblox, the gaming platform, fell about 16% after daily active users dropped 9% to 138 million.
Rates add to the pressure
Markets expect the Federal Reserve to raise interest rates by more than half a percentage point by mid-2027, according to LSEG data, which would make debt-funded AI spending harder to justify.
The Nasdaq 100 has fallen more than 5.8% this month, and Reuters said more than $2 trillion of market value was set to be wiped from the index in October.
Some strategists are urging calm: Paul Stanley, managing director at Arca, said the AI trade is "down, but not out", and Matt Orton of Raymond James told CNBC the selloff is not a reckoning, as fundamentals remain strong.
Apple reports on Monday after the US close, AMD on Tuesday and Nvidia in mid-November.
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