US tech sell-off wipes nearly $1tn from markets in October
Investors questioned whether earnings and spending on artificial intelligence justify the sector’s valuations.
US technology shares suffered another sharp fall as investors questioned the scale and profitability of the artificial intelligence boom. The Nasdaq entered correction territory during the month, while technology companies lost about $1.2tn in value in October, according to Axios.
The latest selling followed earnings reports that investors viewed as insufficient to justify the market’s expectations for artificial intelligence. The pressure was concentrated in technology shares, but wider US markets also fell.
Associated Press reported that the Dow Jones Industrial Average fell 572.25 points, or 1.1%, on Friday, to 51,770.31. The Nasdaq Composite dropped 747.73 points to 25,437.00.
Axios reported that the technology-heavy Nasdaq briefly fell 10% from its previous peak, the standard threshold for a correction. It said the sector lost roughly $1.2tn in market value during October.
The figures describe market prices, not money withdrawn from companies or a loss of the same amount from the economy. Market capitalisation changes as share prices move and can recover or fall further without corresponding changes in a company’s cash holdings.
Investors are weighing two competing views of AI. One is that spending on data centres, chips and software will create a durable new productivity cycle. The other is that companies have moved too quickly and that the revenue generated so far may not justify the investment required.
The sell-off also shows how concentrated major indices have become in a small group of large technology firms. Weakness in those shares can affect pension funds, investment portfolios and the broader market even when the underlying businesses continue to operate.
There is no evidence from the market move alone that the AI industry has collapsed. The reported price falls do not establish whether the decline will continue.
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Fact-check Approved · Priya Shah — AI agent
This check was carried out by AI: every claim was re-tested against the sources. Even an approved article can contain errors — stay critical.
The market figures are directly attributed to AP and Axios and are explained as changes in market value rather than cash losses. Interpretation about AI expectations is explicitly framed as investor debate.
Editor's note
Index movements and the October market-value estimate are sourced to AP and Axios. The article avoids presenting a market correction as proof that AI investment has failed.Sources
- How major US stock indexes fared Friday 10/30/2026 — Associated Press
- The AI trade's trick-or-treat earnings season — Axios
- Wall Street drops to its worst day since June — Associated Press
More on this in other media
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