This morning’s question was whether the chipmakers would shrug off Intel and bounce. Six hours later, the answer is coming through loud and clear: they are not bouncing, they are joining in. Nasdaq 100 futures are down about 2.6% ahead of the US open, worse than at breakfast, and the selling has spread from one disappointing forecast to almost every corner of the semiconductor industry.
Underneath the red, money is not leaving the market so much as changing seats. Drugmakers, oil majors and household staples are higher before the open, Treasury yields are falling and the Dow is barely moving. It looks like a sector clear-out on the last trading day of October rather than a rush for the exit, but it is a big one.
The Situation Right Now
S&P 500 futures are down about 1.1% near 7,668, against Thursday’s cash close of 7,720.39. Nasdaq 100 futures are off roughly 2.6% near 28,783, while Dow futures are flat, which says plenty about where the damage is concentrated. On Thursday the Nasdaq Composite fell 1.4% after Alphabet’s record one-day drop, the S&P 500 slipped 0.3% and, tellingly, the small-cap Russell 2000 rose 1%.
Europe is holding up far better than US tech. The FTSE 100 is up about 0.2%, helped by its heavy weighting in energy and healthcare, while the DAX is down around 0.6% and the Stoxx 600 is 0.3% lower. Asia took the hit overnight: Japan’s Nikkei fell 2.1%, South Korea’s KOSPI dropped 3.5% and Taiwan lost 2.5%, all markets packed with chip stocks. Hong Kong was the exception, up 1.5%. The VIX, Wall Street’s fear gauge, has climbed above 18.6.
What Changed Since This Morning?
At around 05:00 UK, Nasdaq futures were down 1.8% and S&P futures 0.9%. Both have slid further since, so European hours have not brought the relief some were hoping for. Intel has gone from somewhere between 16% and 20% lower after hours to about 25% lower in pre-market trading, and the losses have widened out to chip designers, memory makers and the companies that build chip-making equipment.
Bonds have moved the other way. The US 10-year Treasury yield has eased to about 4.91% from 4.93% at breakfast, the dollar has slipped and sterling has climbed to around $1.3425. Oil has pushed higher again, and gold, silver and Bitcoin have all lost more ground.
The Biggest US Market Story: The Chip Sell-Off Spreads
Intel’s third quarter was not the problem. Revenue of $16.51 billion met or beat several forecasts, and its data centre and AI sales jumped 78% to $7.3 billion. The trouble was the outlook. Intel guided fourth-quarter revenue to $15 billion to $16 billion, well short of the roughly $17.1 billion to $17.3 billion analysts had pencilled in, and earnings per share of around 25 cents against expectations in the mid-40s. It pointed to a weak PC market, higher memory costs and supply limits.
On its own, that would be an Intel story. What makes it a market story is the company it keeps. This week Alphabet and Amazon both showed that their AI spending is running hotter than investors expected, and Alphabet’s free cash flow turned negative. Investors are now asking two uncomfortable questions at once: are the biggest buyers of AI hardware going to slow down, and are the costs of the build-out squeezing the suppliers too?
The pre-market board suggests traders are not waiting for the answer. Arm is down nearly 10%, AMD around 8.6%, SanDisk almost 9% and Western Digital close to 8%. Micron is down nearly 6%, and the equipment makers Lam Research, Applied Materials and ASML are each 5% to 6% lower. Even Nvidia is down about 3%. This is the sector giving back gains across the board, not one company being punished.
Stocks Moving Before The Open
Away from chips, the earnings season is still handing out harsh treatment. Reddit is down about 20% after cautious guidance and falling traffic from Google search, despite revenue growth of more than 50%. Twilio is down around 17%. Amazon is roughly 7% lower after its results, while Alphabet is down a further 1% after Thursday’s 12.6% slide.
The winners tell you where the money is going. Eli Lilly, which hit a record on Thursday after lifting its full-year outlook, is up another 2.8%. Merck and Bristol Myers Squibb are both higher, Colgate-Palmolive is up about 3% and Linde more than 2%. Exxon Mobil and Chevron are up around 2% after both beat forecasts on strong refining profits, the same theme that lifted BP and Shell in London this week.
FX & Dollar
The dollar is weaker rather than acting as a safe haven. The dollar index is down about 0.35% near 101.68, as falling Treasury yields make US cash a little less attractive. Sterling is up around 0.4% at about $1.3425 and the euro is near $1.1193. The yen has firmed slightly to about 157.10 per dollar after the Bank of Japan held rates but sounded more open to raising them.
Bonds
Treasuries are rallying, which is what you would expect when investors trim risk. The 10-year yield is down about 8 basis points at 4.91% and the two-year is down about 9 basis points at 4.57%. Remember that bond prices rise when yields fall. In the UK, the 10-year gilt yield has eased to around 5.28%. Lower yields give the rest of the market some cushion, but they are not stopping the chip selling.
Commodities
Oil is the awkward one. Brent crude is up about 2.5% near $117.80 and US crude is above $104. Dearer energy keeps inflation pressure alive at exactly the moment growth stocks are wobbling, which leaves central banks with less room to cushion any wider sell-off. Gold is down about 1.3% just under $3,980 and silver has dropped nearly 4% to around $50.35, which looks more like profit-taking than a hunt for safety. Bitcoin is down more than 4% near $77,200, trading like another risky tech asset today.
Today’s Remaining Catalysts
The cash open at 13:30 UK time is the big moment. The first half hour will show whether buyers step in to the beaten-up chip names or whether the selling carries on into the weekend. It is also the last trading day of October, so month-end rebalancing by big funds can exaggerate moves in either direction late in the session. Keep an eye on oil too: another leg higher in Brent would make life harder for anyone hoping the Federal Reserve can ride to the rescue.
Levels Traders Are Watching
For the S&P 500, Thursday’s close of 7,720 is the line to reclaim, with 7,700 a round number just below it. For Nasdaq 100 futures, 29,000 is the nearest round number overhead. In bonds, the 10-year yield’s distance from 5% matters for how much support growth stocks get. Brent near $118 and gold around $4,000 are the commodity reference points. These are reference levels, not targets.
Where This Leaves Us
The bias going into the open is cautious. The evidence points to a sector reset in technology rather than a broad panic: the Dow is flat, small caps rose on Thursday, defensive sectors are gaining and bonds are rallying in an orderly way. That is a market changing its mind about how much it will pay for AI growth, not one giving up on stocks altogether.
The opportunity, for patient traders, lies in watching how quality chip names behave once the cash session opens rather than guessing at the bottom from pre-market prices. The risk is that a second leg lower in the big AI names drags the whole index with it, especially with oil climbing and the fear gauge rising into a weekend. The view would change if chipmakers recover most of their pre-market losses in the first hour, or if the selling spreads into the Dow and small caps.
Markets to watch are the Nasdaq 100, Nvidia, the memory makers, the 10-year Treasury yield and Brent crude. For beginners, the lesson is that one weak forecast can move an entire sector when investors are already nervous, and that a good company can still fall when expectations were set too high. If you want to see how your own trading decisions measure up in conditions like these, take the Samuel & Co Trading Assessment as a sensible next step.
