Nasdaq Drops 5% in October as Tech Sells Off — November 2, 2026

Top U.S. Stories

• Tech-led sell-off ends October. On Friday the Nasdaq fell 2.86% to 25,437.00, the S&P 500 lost 1.82% to 7,580.07 and the Dow slipped 1.09% to 51,770.31. The Nasdaq lost about 5% for the month, its worst since March 2025. Why it matters: Weak results from big tech names are raising doubts about whether heavy AI spending will pay off, and those stocks make up a large share of many retirement accounts.
• Midterms on Tuesday. Voters go to the polls on November 3. Secretary of State Rubio said President Trump has not decided whether to resume strikes on Iran and prefers diplomacy. Trump has ruled out strikes before the vote. Why it matters: Iran policy feeds directly into oil prices, and gasoline costs are a top voter concern.
• Fed on hold. The Fed kept its target range at 3.75%-4.00% on October 28. The vote was 10-2, with two members preferring a quarter-point increase. Why it matters: Higher-for-longer rates raise borrowing costs for mortgages and businesses.
• Alphabet, Intel and Amazon all fell after disappointing earnings or outlooks.

Compass Insight

Two forces are pulling on markets at once: doubts about AI spending and a surge in oil. Together they hit stocks while pushing money into safer assets; Treasury yields fell on Friday even as inflation worries persist. For households, expensive oil means higher fuel and utility bills, and a stock portfolio heavy in tech is now swinging more than usual. In the short term, watch Tuesday’s election and any shift in Iran policy afterward. Over the longer term, the question is whether companies can turn massive AI investment into profit, and whether central banks can ease at all with energy prices elevated.

Markets

• Dow 51,770.31 (-1.09%), S&P 500 7,580.07 (-1.82%), Nasdaq 25,437.00 (-2.86%) at Friday’s close.
• WTI crude settled at $104.12, up $2.12 or 2.08%, and rose about 15% in October on Strait of Hormuz tensions.
• 10-year Treasury yield near 4.93%, down on the flight to safety.
• USD/JPY 157.25 on the October 30 reference rate. Japan’s Nikkei 225 closed at 63,290.11, down 2.12%, and the Bank of Japan kept its rate at about 1.25%.
• In Europe, the ECB held its deposit rate at 2.5%, and Christine Lagarde said she will step down on February 7, 2027.

Stocks in Focus

• Alphabet: Shares slid sharply after its October 28 earnings missed expectations, on worries about heavy AI spending.
• Intel: Fell sharply on a weak outlook tied to soft PC sales and memory-chip pricing.
• Energy and refiners: Gained on higher crude and stronger refining margins.

Not a recommendation to buy or sell any security.

Auto-generated and AI-written. Not investment advice.