All three main equity indexes gapped down at Friday’s open, as the rotation out of technology and artificial intelligence infrastructure accelerated to a frightful pace on All Hallows Eve. Investors, traders and speculators are seeking safety in energy, consumer staples and healthcare stocks, as well as Treasury bonds, amid rising concern about capex plans and return on AI.
By the closing bell, the Nasdaq Composite had fallen 2.9% to 25,437, the tech-heavy index’s steepest single-day decline since March 2025, turning what had been a modest weekly gain into a 2% weekly loss.
The broad-based S&P 500 was off 1.8% at 7,580, resulting in a 0.6% decline for the week. The blue-chip Dow Jones Industrial Average was down 1.1% today to 51,770. Papa Dow dipped 0.9% this week.
“Mega-cap stocks have faced increased selling pressure over the past two weeks as elevated AI-related spending and rising financing costs raise concerns over the path to profitability,” LPL Financial Chief Cross-Asset Strategist Adam Turnquist observes. “Recent earnings reports have added to these concerns, revealing slowing growth in select hyperscalers’ core businesses.”
Alphabet ( GOOGL , -1.4%) reported its weakest ad revenue growth in five quarters, while e-commerce sales for Amazon ( AMZN , -1.4%) slowed to a three-year low. But Microsoft ( MSFT , -1.6%) reported a nice pop for cloud revenue, including expectations-beating Azure sales.
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Still, according to Turnquist, the Magnificent 7 stocks are showing signs of weakness from a technical perspective.
Indeed, the Magnificent Seven Index has broken below support near its May highs and is approaching another key level. Relative strength “is also at a critical inflection point,” with more deterioration from here suggesting leadership “is rotating away from mega-cap stocks.”
The wider technology complex was also destabilized on Friday by a reported $6.3 billion hack of cryptocurrency exchange Binance engineered by agents of North Korea’s government.
Intel is way outside
Intel ( INTC , -28.6%) was the worst S&P 500 stock on Friday after management reported mixed results and offered weak guidance, amid a more-rapid-than-anticipated deceleration for its core PC market.
The chipmaker expects to report earnings of 25 cents per share for the fourth quarter on revenue of $15 billion to $16 billion. Wall Street forecast EPS of 45 cents on revenue of $17.3 billion.
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Other semiconductor stocks got dragged down, too, including Advanced Micro Devices ( AMD , -10.9%), which is scheduled to report third-quarter earnings after the closing bell on Tuesday.
Nvidia ( NVDA , -4.2%) was the worst Dow Jones stock . Fellow Mag 7ers Meta Platforms ( META , -1.5%) and Tesla ( TSLA , -0.9%) looked better by comparison.
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Apple ( AAPL , -1.2%) will be the sixth Magnificent 7 stock to report this season when it reveals fiscal fourth-quarter results after Monday’s closing bell.
As Turnquist explains, AAPL outperformed this month because the iPhone maker is “more asset-light compared to peers” and is still generating strong positive free cash flow.
Crude oil up, bond yields down
The front-month West Texas Intermediate crude oil futures contract rose 2.4% to $104.45 per barrel, and Brent futures added 1.5% to $112.44, reflecting expectations the war in the Middle East will intensify after midterm elections in the U.S.
The 2-year Treasury yield (-6.4 basis points, 4.592%), as well as the 10-year (-5.8 bps, 4.931%) and the 30-year (-1.9 bps, 5.31%), declined as investors bid up bond prices in their search for safety.
Meanwhile, the Bureau of Labor Statistics (BLS) will share its October update on the employment situation before the opening bell next Friday . Markets expect the data to reflect continuing stability.
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Indeed, even after a cooler-than-expected September jobs report , the Federal Open Market Committee (FOMC) remains focused on the inflation problem.
That includes Cleveland Fed President Beth Hammack, who dissented from the decision to hold interest rates steady at the October Fed meeting and promises to generate economic calendar sparks next Thursday.
Note that the Treasury Department announced an I-bond rate of 5.51% , which is fixed for the six months through April 30, 2027, and looks even more attractive after today’s price action.
What is it about Berkshire Hathaway?
Berkshire Hathaway ( BRK.B , +0.3%), because of what’s inside Warren Buffett’s and Greg Abel’s portfolio, is a lot like an equity index fund . It’s actually the biggest financial stock in the S&P 500.
But Berkshire’s holdings include American Express ( AXP , -1.4%) and Bank of America ( BAC , -2.2%), as well as Apple, which remains the biggest holding, and Alphabet, which will go down as Buffett’s last major equity buy.
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It also includes consumer staples such as Coca-Cola ( KO , +1.4%), energy stocks such as Chevron ( CVX , +1.7%) and industrials such as Delta Air Lines ( DAL , -1.8%).
Today, the blue chip stock traded like a safe haven. Next Saturday, Abel’s team will report quarterly earnings for the first time since Buffett’s retirement as chairman of the board in September.
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