The Nasdaq 100 correction returned to Wall Street’s agenda on Friday, as the technology-heavy index briefly fell more than 10 percent below its recent record, marking its third correction of 2026. The drop capped a bruising October for technology shares and sharpened a question that has been building all year: when will the enormous sums being poured into artificial intelligence start paying off?
Technology shares fell for a second straight session on Friday, and the Nasdaq 100 dropped into correction territory during trading before buyers stepped in and lifted it back above the line by the close. A correction is commonly defined as a decline of 10 percent or more from a recent peak. The index closed 9.1 percent below its October 6 record close of 31,224.47, according to market reports, after touching an intraday low that sat 10 percent below that mark.
October closed as the market’s sharpest monthly slide since March 2025. The Nasdaq Composite fell 747.73 points, or 2.86 percent, on Friday to 25,437.00, its steepest single-day percentage drop since June 5, leaving it about 7.8 percent below its record closing high set on October 6. The S and P 500 dropped 140.32 points, or 1.82 percent, to 7,580.07, its worst day since June, while the Dow Jones Industrial Average slipped 572.25 points, or 1.09 percent, to 51,770.31.
What triggered the Nasdaq 100 correction
The immediate trigger was a fresh round of disappointing quarterly results from some of America’s largest technology companies. Intel plunged roughly 28 to 29 percent after its outlook missed estimates, its worst single day in decades, wiping out roughly $140 billion in market value according to market reports. The chipmaker warned about cash burn, a weak personal computer market, and heavy spending to expand production, and guided fourth-quarter revenue to $15 billion to $16 billion, below the $16.5 billion it had just reported.
Alphabet, the parent company of Google, had already suffered a record one-day fall a day earlier, with reports putting its decline at about 12 percent and the loss in market value at more than $500 billion. The company disclosed that the AI summaries at the top of its search results are hurting its core advertising revenue, a warning that struck at the heart of its business model. Amazon, meanwhile, disclosed third-quarter capital spending of about $77 billion and confirmed it expects roughly $220 billion in capital expenditure for 2026, while reporting that it had spent more cash than it earned.
ServiceNow also featured among the disappointing reports that fed the sell-off, according to market coverage, and the Philadelphia Semiconductor Index fell 7.2 percent on Friday, its worst day since June 23, taking its October loss to 15.4 percent.
AI spending nears $1 trillion as investors demand returns
The broader worry is not that demand for artificial intelligence has disappeared. Analysts quoted in market coverage say AI demand remains robust. The worry is timing: companies are committing sums approaching $1 trillion to data centers, chips, power, and networking gear, and investors are increasingly asking when that spending will turn into profits.
Alphabet expects capital expenditure of $195 billion to $205 billion in 2026. Meta forecasts $135 billion to $145 billion, including finance lease payments, while Microsoft expects around $170 billion in capital spending this calendar year and priced a $25 billion bond offering during the week, with proceeds potentially funding capital expenditure. The core businesses of America’s technology giants, the advertising, consumer, and retail machines propping up a collective $750 billion in AI spending this year, are starting to show signs of slowing, according to market analysis.
One portfolio manager quoted in coverage of Friday’s session said the market is moving out of the “hopes and dreams” phase of the AI trade and into a “show me” phase. Strategists at UBS warned of a rising risk of mid-cycle capital expenditure indigestion, while analysts at Miller Tabak noted that the spreading weakness in core businesses means the big payoff many investors have been expecting is being pushed further down the road.
How October compares with earlier 2026 corrections
This is the third time in 2026 that the Nasdaq 100 has fallen more than 10 percent below a record. It closed at 23,132.77 on March 27 and at 27,192 on July 29, and on both earlier occasions it later went on to set new records.
For the month as a whole, the Nasdaq fell about 5.3 percent, its steepest monthly decline since March 2025, while the S and P 500 slipped about 0.9 percent for October and the Dow managed a gain of about 1.7 percent. The S and P 500 technology sector posted its largest monthly percentage loss since March 2025, and communication services saw its biggest monthly drop since April 2022.
The Nasdaq 100 has already wiped out more than $1.2 trillion in market capitalization in October, according to market reports, and the index remained up more than 16 percent for the year despite the month’s weakness.
What investors are watching next
Several tests arrive quickly in the new week. Apple is expected to report after the close on November 2, although the company has not confirmed the date, and November’s earnings reports will show whether returns on AI spending are beginning to arrive. The midterm elections on Tuesday add another layer of uncertainty for markets, with traders watching whether the technology pullback stabilizes or deepens.
For now, the debate has shifted. Earlier in the year, the question was whether artificial intelligence would change the economy. Now, investors are asking a narrower and harder question: how much they are willing to pay, and how long they are willing to wait, before the spending produces the profits to justify it.
Sources: market coverage of the October 30-31 trading sessions, company earnings reports, and analyst commentary reported by Bloomberg and other outlets. This article is for information only and is not financial advice.