Nasdaq 100 sheds 3% as AI spending doubts and a record Binance hack hit risk appetite

Technology stocks and cryptocurrencies sold off together as another round of weak earnings sharpened doubts about the returns on artificial-intelligence spending. The Nasdaq 100 fell about 3%, taking its October losses past $1.2 trillion in market capitalisation, while Intel sank 28% after its outlook missed estimates and Amazon dropped on heavier capital spending.

The core businesses propping up roughly $750 billion of AI investment this year - advertising, consumer and retail - are showing signs of slowing, and in some cases are being cannibalised by the technology itself. That has focused investors on whether the sums being committed will pay off. "It raises the question as to whether the payout will be as big as they have been promising," said Matt Maley of Miller Tabak.

Bitcoin slid to around $77,000 after Binance disclosed a record hack, renewing questions about the security of customer assets. Maley warned that the rotation into other sectors that has held up the US market could vanish: "If the major averages begin to drop in a more compelling manner, it is very likely that investors will stop rotating into other sectors and start rotating into cash."

Defensive corners of the market drew buyers, with staples and utilities rising, while the S&P 500 hovered near its 100-day moving average. Treasuries wavered but were set for their best month since February 2025, and oil climbed on worries the US may resume strikes against Iran.

Ulrike Hoffmann-Burchardi of the UBS Chief Investment Office said AI demand remains robust but flagged a rising risk of mid-cycle capital expenditure indigestion. "We continue to see scope for equity gains overall and believe investors should focus on building a resilient portfolio that includes exposure beyond tech," she said.