The US stock market faced a new wave of selling in technology company shares on November 2. Trading that began with gains turned into a decline in quotes for chipmakers and artificial intelligence technology developers. Investors continue to doubt the payback of massive investments by major corporations in AI infrastructure.
This was reported by MarketWatch, The Wall Street Journal and Bloomberg.
At the start of trading, major US indices were gaining, helped by lower oil prices and attempts by investors to buy back cheaper stocks. However, in the second half of the session the technology sector came under pressure again.
According to MarketWatch, the Nasdaq Composite, which had earlier added up to 1.4%, later slid to a decline of about 0.3%. The Technology Select Sector SPDR exchange-traded fund, which tracks shares of the largest technology companies, was losing about 2.2%, and the PHLX Semiconductor index of chipmakers fell 2.6%.
Particularly notable losses were suffered by companies related to the construction and equipping of data centers. Shares of Marvell Technology and Lumentum fell after the announcement of their merger. Investors are assessing the cost of the deal and its potential impact on the financial performance of the future company.
Oracle added further pressure on the sector. Its shares declined after it announced plans to raise $20 billion through a share and bond offering. The company intends to use the financing to develop artificial intelligence infrastructure.
Against this backdrop, investors are examining not only the revenue growth rates of technology corporations, but also their expenses, debt burden, and free cash flow.
The current decline continued the sell-off that began in late October. On Friday, October 30, the Nasdaq 100 lost about 3.5% and during trading briefly fell more than 10% from its October peak, reaching a technical correction level.
However, by the close of Friday's session some of the losses were recovered, so the index ended the day above the ten-percent decline threshold.
According to Bloomberg, October was the worst month for the Nasdaq 100 since March 2025. The index lost about 6.7% over the month.
One of the factors in the decline was the quarterly reports of major technology companies. Despite the growth of their cloud businesses, investors were concerned about significant capital expenditures on data center construction.
In particular, Alphabet's reporting showed increased spending and deteriorating free cash flow. Amazon also reported large investments, and Intel presented a forecast that disappointed market participants.
After the reports, Intel shares plunged almost 29% on October 30, while Nvidia lost more than 4%. The decline also affected other semiconductor manufacturers, including AMD.
The key question for investors is whether technology corporations can quickly enough turn hundreds of billions of dollars of investment in artificial intelligence into sustainable profits. Additional concerns are raised by the possibility of a slowdown in spending on data centers, on which the revenue of makers of chips, servers, and networking equipment depends.
At the same time, the sell-off did not spread evenly across the US market. Lower oil prices supported shares of airlines and other companies with high fuel costs. This partially offset the losses in the technology sector.
In the coming days, investor attention will be focused on new corporate reports, including Apple and AMD. The market also awaits the release of US employment statistics and the results of the midterm congressional elections on November 3.
