Nasdaq slides 3% as tech selloff deepens toward worst day since June

The tech selloff that began at Friday’s open picked up speed after midday. The Nasdaq Composite slid about 3%, deeper than its roughly 2.2% loss at the open (open brief), and Wall Street headed for its worst session since June.

Why it matters — The AP said the selling reflects growing worry that the AI frenzy pushed prices too high. Intel’s weak fourth-quarter outlook and Amazon’s heavy AI spending have turned the market’s focus from AI growth to AI costs, and chip stocks have taken the biggest hit. With the S&P 500 now past a 1.5% loss and the VIX up about a fifth, the move is no longer limited to a few earnings losers.

Update, 2:40 p.m. ET — The selling reached the largest AI chip name: Nvidia was down about 5% in afternoon trading, and the VIX stayed up about 20%, so the drop is now hitting the market’s biggest weights, not only the earnings losers.

Market reaction — Small caps held up better, with the Russell 2000 higher at the open, which points to a rotation out of big tech rather than a broad flight from stocks. Energy remains a bright spot, with WTI crude above $104 on tanker attacks tied to the Iran conflict, while bitcoin stays under pressure near $77,000 after the Binance hack.

WMR data — Track the VIX and the 10-year yield on Market pulse and chip relative strength on Semiconductors to see whether the selloff spreads beyond tech into the close.

What to watch next — Whether the Nasdaq finishes with a loss of 3% or more on the last trading day of October, and Apple’s results on Nov. 2.