The week began positively for Wall Street, with the Nasdaq rising over 2% before experiencing a downturn, ultimately closing down 2% for the week and 5.3% for October. The S&P 500 mirrored this trend, ending nearly 2% lower for the week.
The shift in investor sentiment was largely driven by disappointing earnings from major tech companies, which raised concerns about spending on AI amidst expectations of potential interest rate hikes by the Federal Reserve.
Notably, Intel's weak outlook resulted in a 28% drop in its shares, while Alphabet and Amazon also faced significant declines of 12.6% and 3%, respectively, after missing earnings expectations.
In contrast, defensive stocks like Eli Lilly and FedEx performed well, with Lilly gaining over 11% due to strong demand for its drugs, and FedEx shares rising nearly 5% as investors reacted positively to its efficiency improvements. Overall, the market's rotation from tech to more defensive sectors highlights a growing focus on financial discipline among investors