US Stock Trends (October 30): Amazon Capital Expenditures Surge, Intel Q4 Guidance Misses Expectations

By Trend Research

Earnings reports from tech stocks continue to trigger sell-offs. On Thursday, Google plummeted 12.64%, the Nasdaq fell 1.38%, and all three major indices ended a three-day winning streak. After hours, Amazon Web Services revenue grew nearly 40%, but high capital expenditures and deteriorating cash flows worried investors; Intel's fourth-quarter earnings guidance missed expectations, sending shares down over 20%. Healthcare, real estate, and small-cap stocks bucked the trend, and the sell-off did not spread across the broader market.

Nasdaq Falls 1.38%, Healthcare and Small-Cap Stocks Buck the Trend

On Thursday, the S&P 500 fell 0.30% to close at 7,720.39; the Nasdaq dropped 1.38% to close at 26,184.72; and the Dow Jones Industrial Average slipped 0.25% to close at 52,342.56. The VIX rose 1.71% to 17.20. The Russell 2000 small-cap index gained 1.01%.

Among the S&P 11 sector ETFs, healthcare, real estate, consumer staples, utilities, financials, materials, industrials, consumer discretionary, and energy rose, while information technology and communication services declined. Specifically, healthcare gained 2.40% and real estate rose 2.21%; information technology fell 1.18% and communication services dropped 1.87%.

During regular trading hours, among the Mag 7, Meta rose 1.96% and Apple gained 1.48%; Microsoft fell 0.16%, Tesla dropped 0.23%, NVIDIA declined approximately 0.8%, Amazon fell 4.25%, and Alphabet Class A shed 12.64%.

The Philadelphia Semiconductor Index fell 1.42% to close at 11,518.20, ending a four-day winning streak. Intel dropped 3.62%, Arm fell 3.02%, and AMD declined 2.08%. Most storage stocks pulled back, with SanDisk falling 5.32%, Micron dropping 4.98%, and SK Hynix declining 1.58%; Seagate gained 0.36%.

In other individual stocks, Marvell fell 13.24% and Caterpillar dropped 9.25%; Eli Lilly rose 6.63% after raising its full-year revenue guidance.

The NasDAQ Golden Dragon China Index gained 0.20% to close at 5,411.30. Pinduoduo rose 2.34% and JD.com gained 0.71%; Alibaba fell 1.41% and Baidu declined 1.07%.

U.S. Treasury yields retreated. According to the yield curve published by the U.S. Department of the Treasury, the 10-year yield was 4.98% and the 2-year was 4.61%, dropping 7 and 6 basis points, respectively, from the previous day. Spot gold pulled back to around $4,020 per ounce. At the time of this morning's editorial review, Bitcoin traded at approximately $76,900 and Ethereum at around $2,219.

Amazon AWS Growth Hits 39%, Capital Expenditures Exceed Expectations

Amazon reported third-quarter results after market close on Thursday, with net sales of $201.94 billion, up 12% year over year, slightly below market expectations; earnings per share were $1.89, down approximately 3% year over year.

Operating profit outperformed net income, growing approximately 61% year over year to $28.08 billion, with an operating margin of 13.9%. The decline in net income was primarily driven by a high base effect from the same period last year: in Q3 2025, the company recognized a $9.5 billion pre-tax gain from its stake in Anthropic, which had no comparable counterpart this year.

AWS revenue grew 39.3% year over year to $45.98 billion, beating analyst estimates. Online store revenue grew just 2%, and advertising revenue also fell short of expectations. This year, Prime Day was moved up to the second quarter in most major markets, impacting the year-over-year performance of third-quarter revenue.

Cash spending accelerated even faster. Spending on property and equipment reached $77.26 billion for the quarter, surpassing analyst forecasts. Over the trailing twelve months ending in late September, free cash flow saw a net outflow of $42.36 billion, compared to a net inflow of $14.79 billion in the same period last year.

The company maintained its annual cash capital expenditure plan of approximately $220 billion, and forecast fourth-quarter net sales between $240 billion and $247 billion, with the midpoint slightly below market expectations. Following the earnings release, shares fell over 10% in after-hours trading.

Intel's Fourth-Quarter Guidance Weakens, Plant Accident Impacts Supply

Intel posted third-quarter revenue of $16.5 billion, up 21% year over year, and adjusted EPS of $0.52, exceeding analyst expectations. However, both its fourth-quarter revenue and profit forecasts fell short of market expectations, sending shares down over 20% after hours.

The company expects fourth-quarter revenue to range from $15 billion to $16 billion, versus market expectations of approximately $17 billion; adjusted EPS is projected at $0.25, below the market expectation of roughly $0.43.

During the third quarter, data center and AI business revenue surged 78% year over year to $7.3 billion, while client computing revenue fell 5% to $8.1 billion. Management anticipates that the sluggish PC market will persist at least through the first half of 2027. Rising memory costs are pushing up system prices, which is also dampening end-user demand.

Server chips face a supply-demand imbalance. An explosion at the Kiryat Gat plant in Israel in October led to a shutdown. The company estimates the incident will reduce fourth-quarter revenue by approximately $300 million and compress gross margins by roughly 2 percentage points, with similar impacts potentially lasting into the first quarter of next year.

U.S. Third-Quarter GDP Grows 3.4%, September Inflation Rebounds

The initial estimate for U.S. third-quarter real GDP showed an annualized quarterly growth of 3.4%, accelerating from the 2.2% growth recorded in the second quarter. Investment, consumption, and government spending jointly drove the expansion, with the increase in equipment investment largely coming from computers and peripheral equipment.

The September PCE price index rose 3.6% year over year, up from 3.4% in August, and increased 0.5% month over month. Core PCE, excluding food and energy, rose 3.1% year over year and 0.3% month over month.

The growth in household income and consumer spending was not synchronized. Personal income rose 0.2% month over month for the period, while consumer spending increased by 0.5%, leaving the personal savings rate at 3.8%. After adjusting for price effects, real consumption remained essentially flat, meaning the rise in nominal spending did not translate into a proportional increase in consumption volume.

While economic growth has accelerated, inflation remains above target levels. These figures alone are insufficient to rule out the possibility of further interest rate hikes by the Federal Reserve.

Crude Oil Settles Lower, Saudi Facilities Reportedly Attacked Again

On Thursday, WTI crude oil December contracts fell 0.76% to settle at $102.00 per barrel; Brent crude oil December contracts declined 0.38% to settle at $114.88 per barrel.

U.S. attempts to re-engage with Iran initially pressured oil prices amid negotiation expectations. Subsequently, the Houthi movement claimed an attack on Saudi refinery facilities, causing Brent crude to turn higher after settlement. The extent of facility damage and the actual impact on supplies remain to be confirmed.

Today's Watch

At 8:30 PM Beijing Time, the U.S. will release the Employment Cost Index for the third quarter. Focus will be placed on the pace of wage and benefit cost increases to assess whether labor costs continue to pressure inflation in the service sector.