Tech Selloff on AI Spending Fears; Fed and ECB Hold Rates as Binance Hack Rattles Crypto

US tech shares fell for a second day as Intel and Alphabet slid on worries over AI spending, while the Fed and ECB kept rates unchanged. A record $6.3bn Binance hack weighed on crypto.

Maz Vantage ·

Wall Street: AI spending worries hit tech

US technology shares fell for a second straight day on Friday as investors questioned the payoff from heavy AI investment. According to the BBC, Intel dropped 28%, shedding more than $130bn in market value, after its finance chief said the firm did not expect to generate more cash than it spends this year and forecast fourth-quarter revenue below expectations. Alphabet slipped a further 1.4% after a 12% fall the day before, Amazon ended 1.4% lower, Reddit fell 29% and Roblox 18%. The Nasdaq finished October with its worst monthly decline since March 2025.

The BBC reports that Meta, Alphabet, Oracle, Amazon and Microsoft have committed to roughly $800bn of spending between them in 2026, and that some investors now fear an AI bubble.

Alphabet's Thursday drop wiped just over $500bn from its value, taking it from $3.97 trillion to $3.46 trillion, after it said AI-generated search summaries were weighing on search advertising revenue. Revenue still grew 25% to $127.6bn, but profit fell short of analyst forecasts, the BBC reports. The same report says Amazon reported negative cash flow of $42bn as its spending rose six-fold in three months.

Federal Reserve holds rates, with two dissents for a hike

The Federal Reserve kept the federal funds target range at 3-3/4 to 4 percent on 28 October. The statement describes economic activity as expanding at a strong pace, with resilient domestic spending, strong productivity growth and robust capital investment, while inflation "remains elevated". The vote was 10-2: Lisa Cook and Beth Hammack preferred to raise the range by a quarter point.

Europe: ECB on hold as energy prices rise

The European Central Bank left its three key rates unchanged on 29 October, with the deposit facility rate at 2.50%. It said continued rises in energy prices pose upside risks to inflation and downside risks to growth, that financing conditions have tightened, and that it is not pre-committing to a rate path. Separately, the ECB announced that President Christine Lagarde will step down on 7 February 2027; her successor will be appointed by the European Council.

Crypto: record exchange hack

Binance said about $6.3bn was accessed in a hack that several analytics firms link to a North Korean group, which would make it the largest crypto theft on record, according to the BBC. Binance said around $3bn had been secured and that it would cover customer losses. Bitcoin fell about 5% to $76,800 on Friday, Coinbase dropped 12% and Robinhood 7.8%. Investing.com reports that Binance is resuming bitcoin withdrawals after covering the bulk of the stolen funds.

China: mixed EV deliveries

October deliveries from Chinese electric-vehicle makers diverged, RTTNews reports via Nasdaq. NIO delivered 34,246 vehicles, down 15.2% from a year earlier. XPeng delivered 50,237, up 20%, helped by overseas sales. Li Auto delivered 29,025, down from 31,767 a year earlier.

What to watch

The week opens with markets weighing whether the AI-spending concerns that hit large-cap tech spread further, a Fed that is holding rates while inflation stays elevated, and an ECB facing an energy-driven inflation risk and a leadership change.

Sources