The fissures in the high-tech and AI boom became significant cracks last week when Alphabet's market value fell by $500 billion in its largest ever one-day loss. Intel shares plunged after providing weaker-than-expected revenue guidance for the fourth quarter, while hyperscaler Amazon missed third-quarter estimates and reported a jump in negative free cash flow. Capital expenditure at the four major hyperscalers almost doubled, rising from $113 billion a year earlier to $207 billion, with a further $232 billion to be spent in the fourth quarter.
Technology stocks suffered a broad selloff on Friday, October 30, 2026, after disappointing forecasts from Intel and mounting cash-flow pressure at Amazon sharpened investors' doubts about the cost of artificial intelligence. Investors have become increasingly skeptical about the massive amounts of money tech giants are pouring into artificial intelligence. Big Tech lost more than $1 trillion last week as investors questioned heavy AI spending.
The major averages posted a losing week on Friday, with tech stocks leading a sell-off following disappointing results from Amazon and Intel, with stakes raised for Apple and other major AI companies such as Palantir Technologies. Apple is expected to post EPS of $1.99 on $113.19 billion in revenue, while Wall Street rates both stocks Moderate Buy with 11.47% upside for Palantir and 3.05% downside for Apple based on average price targets. Wall Street expects Palantir to report earnings per share of $0.41 on revenue of $2.18 billion.
Oil declined after a report said US President Donald Trump wants to give diplomacy with Iran more time before potentially resuming strikes following Tuesday's midterm elections. Brent fell more than 3% below $110 a barrel, erasing all of Friday's gains, while West Texas Intermediate slid under $101. The decline followed a third consecutive day of talks involving Iranian and Qatari officials aimed at advancing negotiations to end the conflict, reflecting growing expectations that diplomatic efforts could help prevent another escalation.
The Fed held its benchmark interest rate steady at 3.75% to 4.00% at its October meeting, and although inflation has remained elevated, Fed officials appear to favor a gradual approach as they assess how higher interest rates are affecting the economy. While the Federal Reserve did not raise interest rates on Wednesday, it is still expected to do so in December. The next Federal Reserve interest rate decision is on Wednesday 9 December 2026, where futures markets price a quarter-point rise as the most likely outcome.
Weak guidance and disappointing results from major technology companies, alongside concerns about AI disruption and rising AI-related spending, weighed on technology stocks. Amazon shares fell after capital spending exceeded expectations and online sales growth slowed to 2%, despite accelerating AWS revenue. Amazon maintained its 2026 capital expenditure outlook of around $220 billion, much of it connected to AI infrastructure, as cash capital expenditure would reach approximately $220 billion in 2026.
The acquisition of Perion by Affle 3i Ltd. is for a closing value of $420 million, with Perion shareholders receiving cash consideration of $11.70 per share, representing a 34.48% premium over the stock's last close. The deal aims to scale Affle's CPCU business across developed markets. Affle reported a Q2 profit of Rs 129.8 crore and signed a definitive agreement to acquire Perion Network for approximately $420 million.
The 2026 Midterm elections will influence the U.S. legal and regulatory environment across multiple business and commercial law domains, with mergers and acquisitions activity influenced more by executive branch enforcement priorities than by congressional control alone. Tariffs remain the top election-related issue for middle market industrial companies, particularly manufacturers. Enduring issues such as trade policy, geopolitics and regulatory reforms are likely to have a greater impact on markets than the outcome of the midterm elections itself, with equity markets showing limited historical reaction to midterm elections.
For owners of mid-sized businesses, the past week's technology sector carnage carries direct implications. Big Tech's earnings disappointments have exposed the real-world cost of heavy AI infrastructure investment; companies are spending more than they are generating in free cash flow, and investors are demanding answers. For any business that sells into the tech sector or depends on cloud services, this repricing matters: it may slow capital spending, pressure margins, and delay purchasing decisions from enterprise customers who themselves face margin questions. Investors should avoid overreacting to election noise, as the business cycle, corporate fundamentals and artificial intelligence investment are likely to remain bigger market drivers.
Simultaneously, Tuesday's midterm elections introduce policy uncertainty just as the economy still contends with sticky inflation and the Fed signals more rate hikes ahead. The 2026 US midterm elections could reshape congressional oversight, appropriations, agency action, and legal and regulatory risks for businesses. Owners should monitor the outcome for implications on tariffs, regulatory enforcement, and tax policyu2014but the midterm elections should have limited impact on markets, with long-term policy themes likely to remain the key drivers for investors, and while the election will determine the balance of power in Congress, Morgan Stanley Research expects its outcome to have only a limited impact on the broader policy backdrop over the next two years. Watch oil prices and interest rates closely: falling crude signals some relief on input costs, while the Fed's pause before December suggests further tightening ahead.