Nasdaq drops 2.9% and ends its worst month since March 2025
Doubts over whether heavy spending on artificial intelligence will pay off hit tech stocks after Amazon and Alphabet reported earnings.
The Nasdaq Composite, the index home to the biggest U.S. tech companies, fell about 2.9% on Friday and finished October down more than 5%. It was the index's worst month since March 2025, set off by Amazon's quarterly report.
The S&P 500, which tracks 500 of the country's largest companies, slid 1.8%. The Dow Jones Industrial Average lost 1.1% but still ended the month higher. All figures are as of the close, 4 p.m. in New York (2 p.m. in Mexico City).
Investors are asking whether the huge outlay on artificial intelligence will pay off. Amazon posted third-quarter sales of $201.9 billion on Thursday, up 12% from a year earlier, and $46 billion at AWS, its cloud business, up 39%.
Yet its free cash flow over the past 12 months was an outflow of $42.4 billion, and it is sticking with about $220 billion in capital spending for all of 2026.
Alphabet showed the same split a day earlier. In its filing with the SEC, Google's parent reported revenue of $127.6 billion, up 25%, and operating income of $40.6 billion. It spent $51.4 billion on investment, and free cash flow for the quarter was negative $9.1 billion. Earnings per share fell to $2.12 from $2.87 a year ago, because of an $8.7 billion loss on equity securities.
The pattern is the same at both companies: the business keeps growing while cash drains into data centers and chips. That tension is what the market punished.
For investors in Mexico, the hit arrives through the exchange rate and through funds that hold U.S. tech shares. The dollar's official FIX rate already ended October at 18.7962 pesos. What the peso does next depends on whether the appetite for risk stays weak when markets reopen Monday, Nov. 2.
