Technology Stocks Slide as Nasdaq Posts Worst Month Since March 2025

October 30, 2026 - 21:53

October closed with a stark split on Wall Street. The Dow Jones Industrial Average and small cap indexes finished the month higher, while the Nasdaq recorded its worst monthly performance since March 2025 as technology and artificial intelligence related shares came under heavy selling pressure.

The divergence reflects a clear rotation in investor sentiment. Money that had poured into AI linked names earlier in the year moved toward more traditional industrial and value oriented sectors. The Dow benefited from that shift, with financial and industrial components attracting steady buying. Small caps also gained ground, helped by expectations that borrowing costs may ease and by their relative insulation from the AI trade that has dominated headlines for months.

The Nasdaq's decline was driven by profit taking in several of the largest technology companies, where valuations had climbed sharply on optimism about artificial intelligence. Disappointing forward guidance from a handful of chipmakers and cloud providers added to the caution. Traders also questioned whether the massive capital spending on data centers and computing infrastructure will translate into earnings quickly enough to justify current prices.

Analysts described the month as a healthy reset rather than a broad retreat. Breadth improved even as the headline technology index fell, a sign that gains are spreading beyond a narrow group of companies. Attention now turns to upcoming earnings reports and economic data, which could determine whether the rotation continues into November or reverses course.