Intel's Q4 guidance significantly undershot expectations, sending its stock plunging 29%—its worst single-day drop since 1974—and dragging down the Philadelphia Semiconductor Index by over 7% in a single day. Amazon AWS revenue grew 39%, but the company's $77.3 billion quarterly capital expenditure far exceeded operating cash flow, with free cash flow continuing to deteriorate.

Binance suffered the largest hack in crypto history, losing approximately $6.3 billion, causing Bitcoin to briefly dip below $76,000.

This week’s focus centers on tomorrow’s U.S. midterm elections and Apple’s after-hours earnings report tonight.

Technology Stocks Plunge: Nasdaq Records Largest Single-Day Drop Since June

On Friday, the S&P 500 declined 1.82%, closing at 7,580.07; the Nasdaq dropped 2.86%, ending at 25,437.00; the Dow fell 1.09%, settling at 51,770.31. The Nasdaq posted its largest single-day decline since June, while the VIX surged to a daily high of 23.93 before closing at 19.42—a 12.91% increase for the session.

Among the 11 sectors in the S&P 500, only Energy, Consumer Staples, and Utilities ended positive; all others declined. The Information Technology sector dropped nearly 5%, the weakest performer of the day. Defensive sectors attracted capital inflows, with Healthcare and Real Estate rising 2.4% and 2.2%, respectively.

Among the Big Seven, Tesla was the sole bright spot, gaining 7.41%. Google Class A shares fell 12.61% (dragged down by last week’s earnings, marking the largest two-day cumulative loss since Alphabet’s IPO), Meta dropped 4.30%, Amazon slid 3.08%, Nvidia declined 3.00%, Apple dipped 0.89%, and Microsoft lost 0.50%.

The Philadelphia Semiconductor Index plunged over 7.2%, with a monthly loss exceeding 15.3% in October. Intel dropped 29%, AMD fell 8.6%, Lumentum shed 8.57%, and Arista Networks tumbled 8.34%.

Looking at weekly performance, the S&P 500 declined 0.58%, the Nasdaq dropped 2%, and the Dow fell 0.85%—three consecutive weeks of losses, marking the longest streak since March. At month-end, the S&P 500 was down 0.94%, the Nasdaq down 5.3%, and the Dow up 1.7%.

Intel Plummets 29%: Worst Single-Day Performance Since 1974

On Thursday after-market, Intel reported Q3 results: revenue of $16.51 billion, up 21% year-over-year; EPS of $0.52, both exceeding expectations. Data Center segment revenue surged 78% YoY, driven by expanding AI-related demand.

However, the key drag came from Q4 guidance. The company forecasted Q4 revenue between $15 billion and $16 billion—significantly below the market consensus of ~$17 billion. The PC business was the primary drag: Intel expects a 25%-30% sequential decline in PC shipments in Q4 and projects a full-year 2026 PC market contraction of 12%, followed by an additional 10% shrinkage in 2027.

Following the announcement, Intel’s after-hours share price initially dropped over 20%, and opened lower on Friday, ultimately closing down ~29%—its worst single-day drop since 1974. Bank of America downgraded its rating from Buy to Neutral, slashing its target price from $145 to $100. Intel’s October decline reached 45%, making it the worst-performing S&P 500 constituent for the month.

Amazon AWS Grows 39%, Capital Expenditure Pressure Mounts

Amazon also reported Q3 results after-market on Thursday. Revenue reached $201.9 billion, up 12% YoY; operating profit hit $28.1 billion, up 61% YoY, achieving a record-high operating margin of 13.9%.

AWS was the standout: revenue rose 39.3% YoY to $46 billion, the fastest growth in five years, with an annualized run rate of $184 billion. AWS backlog climbed to $57.8 billion, more than doubling YoY. CEO Andy Jassy projected that AWS revenue growth would exceed 40% in both 2027 and 2028.

Investors remain concerned about cash flow. Q3 capital expenditures reached $77.3 billion—far exceeding $42.4 billion in operating cash flow—with free cash flow over the past 12 months at -$42.4 billion. The company expects full-year 2026 capex of around $220 billion, with Jassy hinting at a “significant increase” in 2027.

EPS came in at $1.89 (adjusted for the elevated base due to Anthropic investment gains last year), slightly below the market expectation of $1.96. Revenue also missed slightly. After-hours shares dropped as much as 6%, closing down ~3% on Friday.

Combined with previous reports—Google Cloud revenue doubling yet free cash flow remaining negative, Microsoft Azure growing 48% yet capex doubling—the Q3 earnings of the three major cloud players collectively point to one theme: AI is generating revenue, but burn rates are accelerating faster, eroding free cash flow.

Binance Hit by $6.3 Billion Hack, Crypto Market Sees Turmoil

On Thursday evening, Binance confirmed a massive security breach, with estimated losses of approximately $6.3 billion—the largest hack in crypto history, surpassing Bybit’s $1.5 billion incident in February 2025. The attackers are reportedly linked to North Korea.

Binance immediately suspended deposits and withdrawals and collaborated with multiple industry entities to freeze around $3 billion in transferred funds. Companies including Ripple and Circle participated in the asset freezing initiative.

Bitcoin dropped to a six-week low of ~$76,300 following the news, then rebounded slightly to ~$77,300. Ethereum fell to ~$2,237, and BNB dropped 5.6% to ~$679. The total market liquidation within 24 hours surpassed $1.6 billion, with long positions accounting for $1.35 billion. The Crypto Fear & Greed Index plummeted from 51 to 30.

Markets quickly drew comparisons to the 2022 FTX collapse. Unlike then, Binance explicitly stated it would fully cover user losses and thanked partners involved in the freeze. The situation remains under active development.

Oil Hits Seven-Week High, Gold Falls to One-Year Low

WTI crude December futures rose 2.08%, closing at $104.12 per barrel—the highest close since September 15, with October posting a gain of over 15% and extending four consecutive monthly gains. Brent crude advanced 2.4%, closing at $117.64 per barrel, nearing the March 31 high. The oil tanker incident in the Strait of Hormuz intensified supply concerns, supporting oil prices despite the tech sector sell-off.

Gold moved in stark contrast. December gold futures dropped 3.29%, closing at $3,898.90 per ounce—the lowest level in a year. Elevated inflation data combined with renewed Fed rate hike expectations continued to pressure gold prices.

In the New York bond market, the 10-year Treasury yield fell 6 basis points to 4.929%, marking a seven-week low, as tech sell-offs triggered a flight-to-safety into U.S. debt. The 2-year yield dropped 8.7 bps to 4.569%. For the entire month of October, the 10-year yield declined by ~36 bps—the largest monthly drop since December 2023.

The U.S. Dollar Index closed at 101.96, largely unchanged for the week.

This Week’s Focus

All times are Beijing time.

Tonight (Monday) after U.S. market close: Apple and Palantir report earnings. Apple will release its Q3 results, with market expectations for EPS around $2.02. Following last week’s tech selloff, Apple’s performance will directly influence market sentiment toward the AI spending narrative. Palantir’s options market implies ~13.3% volatility.

Tuesday: U.S. midterm election voting day. All 435 House seats and 35 Senate seats will be up for re-election. The outcome will determine congressional control during the second half of Trump’s presidency, with profound implications for fiscal policy, regulatory direction, and market style preferences. Historical data shows that since 1938, the S&P 500 has risen within 12 months after midterms 95% of the time.

After-market Tuesday: AMD reports earnings. Consensus forecasts revenue of ~$13.1 billion, up 42% YoY; EPS of ~$1.94, up 62% YoY. Following Intel’s collapse, AMD’s performance in data center and AI chips will serve as a key anchor for semiconductor sector confidence.

Wednesday to Thursday: Qualcomm, Arm, Arista Networks, and others report earnings sequentially. Additional data points along the AI infrastructure chain will determine whether tech stocks continue to face pressure or begin stabilizing and rebounding.

Friday 21:30: U.S. October Nonfarm Payrolls report. September’s jobs gain was just 29,000, with the three-month average falling to ~50,000. Further cooling in the labor market could significantly impact expectations for the Fed’s December rate hike decision.

Throughout the week: ISM Manufacturing PMI (Monday) and ISM Non-Manufacturing PMI (Wednesday). September’s Manufacturing PMI stood at 54.5, with the Prices Paid index soaring to 77.9, indicating persistent supply-side inflation pressures.

By: Tide Research