Key Highlights

● The Nasdaq Composite was down 2.52% for October through Thursday's close.

● Alphabet's record capex of $51.4 billion and negative free Cash Flow sent shares down 12.6%.

● Intel's weak fourth-quarter Revenue guide sent shares down about 25% pre-market.

● Markets price roughly 85% odds of a December Fed rate increase.

The index that powered most of this Bull Market is about to post a losing month. Through Thursday's close, the Nasdaq Composite was down 2.52% for October, and Nasdaq-100 futures were down another 2.62% as of about 8 a.m. ET Friday, according to market data quotes. Unless tech stages a sharp turnaround in the final session, October will go into the books as a red month for the Nasdaq while the Dow, S&P 500 and Russell 2000 stay in positive territory.

The numbers

The Nasdaq Composite ended September at 26,861.06 and closed Thursday at 26,184.72, according to market data. It fell 1.38% on Thursday alone. At the end of September, the index was up 15.6% for the year, the best of the four major benchmarks, so October is giving back a chunk of that lead.

Perspective matters, though. Even after October's drop, the Nasdaq was still up about 12.7% for 2026 through Thursday, by a calculation combining the September year-to-date figure with this month's move. A losing month would dent the year, not erase it.

The tech-heavy QQQ ETF was down 2.50% for the month through Oct. 27, compared with a 0.92% gain for SPY and a 4.57% rise for the equal-weight RSP, according to market commentary. Another source noted that Friday marks the second straight session of declines for stock futures.

The cash-burn problem

This week's megacap Earnings turned a worry into a selloff. Alphabet (NASDAQ:GOOGL)'s capex hit a record $51.4 billion in the third quarter and its free cash flow was negative $9.1 billion, sending the stock down 12.6% Thursday. Amazon (NASDAQ:AMZN) reported trailing 12-month free cash flow of negative $42.4 billion and reaffirmed $220 billion of 2026 capex, and its shares were down about 7% pre-market Friday. Intel (NASDAQ:INTC)'s fourth-quarter revenue guide of $15 billion to $16 billion, versus roughly $17.1 billion expected, sent it down about 25%.

"Strong AI Demand is no longer enough on its own," one senior market analyst said. The analyst said Alphabet's selloff highlighted "growing concerns about AI-related cash burn" and warned that "this could remain a significant headwind for the Nasdaq."

The damage spread across chips. AMD (NASDAQ:AMD) was down 8.72% and Arm (NASDAQ:ARM) 9.41% at 8:23 a.m. ET, according to a pre-market table, while media reports listed Nvidia (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO) and Micron (NASDAQ:MU) among chipmakers down 2% to 9%. Overseas, Korea's Kospi fell about 4% and Japan's Nikkei 225 2.3%, and Europe's Stoxx tech index slid about 2%.

Not just earnings

Rates are another headwind. The Fed raised rates in September and held this week with two officials, Lisa Cook and Beth Hammack, dissenting in favor of another hike. Market-implied odds show roughly 85% odds of a December increase. Chair Kevin Warsh said of AI capex and rates: "I don't believe they are somehow divorced from the rest of the economy." Even with the 10-year Yield easing to about 4.94% to 4.99%, it's still near two-decade highs, which pressures richly valued growth stocks.

There's a counterpoint. Microsoft (NASDAQ:MSFT) held up after its quarter, with Azure growth of 48%, and Alphabet's cloud revenue more than doubled. Demand for AI services is real; the debate is about the price of building it. One brokerage called Amazon's selloff a "spend-scare overreaction," according to a headline.

What to watch: whether dip buyers show up in the cash session, Apple (NASDAQ:AAPL)'s results on Nov. 2, and AMD, Arm, Qualcomm (NASDAQ:QCOM) and Palantir (NASDAQ:PLTR) reports next week. Political risk is also on the radar. One market strategist said that a "blue wave" in Tuesday's midterms would be "negative for both the AI names."