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

Hey listeners, it's Saturday, October 31st. I'm Jack Pitcher for the Wall Street Journal, and this is What's News and Markets. Our look at the biggest stock moves of the week and the news that drove them. Let's dive in. A bumpy week for the AI trade is making investors nervous. Rising interest rates have made it more difficult for AI companies that are trying to raise hundreds of billions of dollars to build out data centers and other infrastructure to access affordable capital. Increasingly, companies that want to borrow or facing tough questions from investors who want to know when such investments could turn profitable. AI giant and theropic filed much anticipated paperwork on Monday to kick off the process of going public, offering the most detailed look yet at its business. Investors generally liked what they saw, helping spark a rally and tech shares. On Wednesday, the Federal Reserve announced it would hold interest rates steady for now, which is what Wall Street had expected. Stock indexes and bond yields had a relatively muted reaction. Then all eyes turned to tech earnings, with Alphabet, Amazon, and Intel all reporting. We'll jump into the details in a minute, but Markets got ugly fast. The cracks in the AI trade multiplied through the week, culminating in a sharp tech sell-off Friday that sent the NASDAQ composite to its worst day since June, and it's worse month and more than a year. The tech heavy index tumbled 2.9 percent on Friday, and in the week 2 percent lower. The S&P 500 dipped 0.6 percent, and the Dow fell 0.9 percent. The early week tech rally vanished fast once big tech earnings rolled in. The biggest shockwave came from Alphabet, which suffered its worst trading day ever. On Thursday, shares finished the day about 12.6 percent lower, equivalent to $497 billion in lost market cap, according to Dow Jones' market data. It was the second biggest single-day loss for a U.S. company on record. Alphabet earnings also disappointed investors. Revenue from the company's core search unit fell short, and the company also burned through cash at a faster clip than Wall Street expected, reflecting the cost of the AI build out. And yesterday Intel had its worst trading day ever, after it too reported disappointing third quarter earnings. Shares plunged almost 29 percent after the memory chip crunch and other hiccups weighed on PC sales. Intel lost $140 billion in market cap. It's largest one-day market cap decline on record. For the week, shares were also down 24 percent. Amazon reported its highest revenue growth from Amazon Web Services in years. Overall, revenue increased 12 percent to $201.9 billion, but still fell below analyst estimates. Shares of Amazon fell 3 percent. Investors are seizing on fears the U.S. could resume military strikes against Iran. After the top American commander in the Middle East, brief president Trump on military options, according to the Wall Street Journal, that threat of fresh escalation comes as America's two biggest oil companies banked huge third quarter profits, benefiting from the disruption and energy markets, after drones took out major oil refineries in Russia and the Middle East. The fuel making divisions at Exxon Mobile and Chevron turned in their highest quarterly earnings ever on Friday. Both companies are taking steps to boost their output of diesel, prices of which hit records in the U.S. in September. Exxon's earnings climbed to $15.4 billion, up 104 percent over the same period last year and the highest since 2022. Shares of Exxon rose 2.2 percent. Chevron's profits rose to $9.9 billion, almost tripling its results from the year earlier period. Shares of Chevron advanced about 1 percent. It careered moved 0.8 percent higher and in the week around $113 a barrel. Binance, the world's largest cryptocurrency exchange, suspended user withdrawals after hackers drained $6.3 billion from the platform on Thursday and the largest digital currency heist on record. Blockchain investigators have attributed the attack to North Korean state-sponsored hackers. Binance founder Changping Zao said the company will be able to cover the losses of people whose cryptocurrencies were stolen. The company is in contact with law enforcement about the attack and on Friday said it plans to reopen its platform for user withdrawals within 45 hours. Crypto-related stocks dipped after the Binance hack, but the moves don't point to widespread panic among traders. On Friday, Shares of Coinbase fell 10.6 percent, strategy declined 7.8 percent and Robinhood ended the day down 7.2 percent. And now you know what's news and markets this week. You can read about more stocks that moved on the week's news and our live markets coverage on WSJ.com. Today's show is produced by Michael LaValle, with supervising producer Melanie Roy. I'm Jack Pitcher, have a great weekend and see you next Saturday. (upbeat music)