What’s News in Markets: AI Selloff Deepens, Tech Earnings Disappoint, Binance Hack

Host Jack Pitcher opens by saying the week was bumpy for the AI trade, making investors increasingly nervous. Rising interest rates are making it harder for AI companies seeking to raise hundreds of billions of dollars to finance data centers and other infrastructure. Investors are asking when those investments will become profitable, rather than simply accepting the promise of future growth. Anthropic filed long-awaited paperwork on Monday to begin the process of going public. The filing gave investors the most detailed view yet of the AI company’s business, and the initial reaction was broadly positive, helping tech shares rally early in the week. On Wednesday, the Federal Reserve held interest rates steady, as Wall Street expected, producing only a muted response in stock indexes and bond yields. The market’s attention then shifted to earnings from Alphabet, Amazon, and Intel. Their results intensified doubts about the cost and payoff of the AI buildout, and the early-week technology rally quickly disappeared.

The sharpest blow came from Alphabet. On Thursday, its shares fell about 12.6%, the company’s worst trading day ever. That decline erased approximately $497 billion in market value, according to Dow Jones market data, making it the second-largest one-day loss for a U.S. company on record. Investors were disappointed that revenue from Alphabet’s core search business fell short of expectations. They were also concerned that Alphabet was burning cash faster than Wall Street expected as it paid for its AI infrastructure and related expansion. Intel delivered another major shock on Friday. Its shares plunged almost 29% after disappointing third-quarter earnings, as a memory-chip crunch and other problems weighed on PC sales. Intel lost roughly $140 billion in market capitalization in one day, its largest such decline on record, and ended the week down 24%. The broader Nasdaq Composite fell 2.9% Friday, its worst day since June, and finished the week down 2%, while the index also had its worst month in more than a year. The S&P 500 fell 0.6% for the week and the Dow declined 0.9%.

Amazon’s results offered a more mixed picture than Alphabet’s or Intel’s. Amazon Web Services posted its strongest revenue growth in years, suggesting that demand for cloud computing and AI-related services remained substantial. Overall company revenue increased 12% to $201.9 billion. That growth nevertheless came in below analyst estimates. Investors therefore did not treat the AWS performance as enough to overcome the broader concerns about technology valuations and spending. Amazon’s shares fell 3% after the report. Pitcher presents the results from Alphabet, Intel, and Amazon as part of the same week’s larger market question: whether the enormous investments required to build AI infrastructure will ultimately produce profits quickly enough to justify the companies’ spending and investors’ expectations.

Investors also reacted to the possibility that the U.S. could resume military strikes against Iran. The concern followed a briefing by the top American commander in the Middle East to President Trump about military options, according to The Wall Street Journal. The threat of renewed escalation came as disruptions in energy markets helped America’s two largest oil companies produce exceptional results. Drones had struck major oil refineries in Russia and the Middle East, contributing to the disruption. ExxonMobil and Chevron both reported record quarterly earnings from their fuel-making divisions. Both companies are taking steps to increase diesel production after U.S. diesel prices reached records in September. Exxon’s earnings rose to $15.4 billion, up 104% from the same period a year earlier and the company’s highest result since 2022; its shares gained 2.2%. Chevron’s profit reached $9.9 billion, nearly triple its year-earlier result, and its stock advanced about 1%. Brent crude rose 0.8% during the week, ending around $113 a barrel.

Binance, described as the world’s largest cryptocurrency exchange, suspended user withdrawals after hackers drained $6.3 billion from the platform on Thursday. The theft was described as the largest digital-currency heist on record. Blockchain investigators attributed the attack to North Korean state-sponsored hackers. Binance founder Changpeng Zhao said the company would be able to cover the losses of customers whose cryptocurrencies were stolen. The company said it was working with law enforcement and planned to reopen withdrawals within 45 hours. Crypto-related stocks declined after the news, but Pitcher said their moves did not indicate widespread panic among traders. Coinbase fell 10.6% on Friday, Strategy declined 7.8%, and Robinhood ended the day down 7.2%. The episode closes with Pitcher directing listeners to the Journal’s live markets coverage for more stocks affected by the week’s news.