Analysis
October Split Wall Street: Nasdaq −5.3%, Dow +1.7%
The Nasdaq Composite lost 5.3% in October, its worst month since March 2025, while the Dow gained 1.7%. A 2.86% drop on Friday sealed the split as AI earnings disappointed.
The last session of the month was the worst of it. On Friday, October 30, the Nasdaq Composite fell 2.86% to 25,437.00, its steepest daily decline since June, the S&P 500 lost 1.82% to 7,580.07 and the Dow Jones Industrial Average 572 points, or 1.09%, to 51,770.31. The Russell 2000 of smaller companies fell 1.66%. Intel's 28.6% collapse led the losses, but the selling ran well beyond one company: AMD, Qualcomm, Dell and Sandisk each dropped more than 10%.
Measured from the September 30 close, the month ends with three indexes telling three different stories. The Nasdaq lost 5.3%, its worst month since March 2025, and finished 7.8% below the record of 27,599.79 it set on October 6. The S&P 500 slipped 0.9%. The Dow rose 1.7%. Less than four weeks ago the Nasdaq and the S&P 500 were closing at record highs; what changed in between was a single, crowded week of earnings from the companies that dominate both.
Those results were graded on cash rather than growth. Alphabet suffered the largest one-day loss of market value in its history on Thursday, Amazon fell another 1.4% on Friday after quarterly spending of $75.9 billion, and Meta reported negative quarterly free cash flow for the first time in more than a decade, Investing.com noted. The test was harsher still away from the hyperscalers. Reddit fell 29.2% to $91.73, its worst day since its 2024 listing, after guiding fourth-quarter revenue to $1.0 billion to $1.03 billion, below forecasts; chief executive Steve Huffman said traffic arriving from search engines had dropped by more than 1 million a week on average in October, the same AI-driven shift in search that hit Alphabet. Roblox lost 18.1%.
Money that left technology did not go far. The 10-year Treasury yield eased to about 4.93% from 4.99% and US crude stayed above $100 a barrel. Not every explanation was about earnings. "The expected blue sweep in the midterm elections is further influencing risk-off postures," José Torres, senior economist at Interactive Brokers, said, with the vote due on Tuesday.
The Dow's gain is partly an accident of construction. It is weighted by share price and holds only 30 stocks, so it is far less exposed to a handful of trillion-dollar technology companies than the market-cap-weighted S&P 500 or the Nasdaq. October showed how much those weights now matter: an index can lose more than 5% in a month in which a broad, price-weighted basket of industrial, financial and consumer names rises. November starts with Apple's results on Monday, the midterms on Tuesday and the October jobs report on Friday, so the split will be tested quickly.