The sell-off for tech stocks deepens and drags Wall Street toward its worst day since June

NEW YORK (AP) — A sell-off for tech stocks is getting worse Friday on worries that Wall Street's frenzy around AI sent prices too high.

The S&P 500 dropped 1.8% and was on track to erase its gain for October, even though it set its all-time high during the month. The Nasdaq composite was likewise heading toward its worst day since June, as the weakness for technology stocks dragged it down 3%, as of 12:55 p.m. Eastern time. The Dow Jones Industrial Average was down 496 points, or 0.9%.

Intel's stock led the way downward and is flirting with its worst day since 1974 after tumbling 30.1%. The chipmaker gave a forecast for profit in the final three months of this year that fell short of analysts’ expectations, as CEO Lip-Bu Tan said the personal-computer industry continues to feel pressure. The drop came even though Intel reported a stronger profit for the latest quarter than analysts expected.

Amazon sank 2.3% after reporting a weaker profit for the summer than analysts expected. Potentially more concerning for investors was Amazon’s reporting that it burned through $42.4 billion of cash over the prior 12 months, according to a measure called free cash flow. It spent $94.8 billion on property and equipment, primarily through investments in artificial-intelligence technology.

A day earlier, Alphabet’s stock dropped more than 12% to its worst day on record and almost single-handedly dragged the S&P 500 lower after telling investors it burned through more cash during the summer than the spring. The company behind Google and YouTube cited similar, mammoth investments in AI.