Intel shares fell about 29% on Friday, their steepest one-day decline since 1974, after the chipmaker gave a fourth-quarter revenue outlook below market estimates. The Nasdaq Composite dropped 2.86% on Friday, its largest one-day fall since June, as the Intel selloff weighed on technology stocks. The S&P 500 fell 1.82% and the Dow Jones Industrial Average lost 1.09% on the same day.
For the week, the S&P 500 declined 0.58%, the Nasdaq fell 2% and the Dow dropped 0.85%. All three indexes recorded a third consecutive weekly loss, their longest such streak since March. The Philadelphia Semiconductor Index lost more than 7.2% on Friday and fell more than 15.3% in October.
Three straight weekly losses for all three indexes is the longest run of its kind since March. The streak shows how the market has struggled to hold gains through October, even before Friday’s sharp session. A week that ends with every major index lower for a third week in a row leaves traders looking for a fresh reason to buy, and the coming week offers several.
Intel results beat estimates, guidance disappointed
Intel reported third-quarter revenue of $16.51 billion, up 21% from a year earlier, and earnings of 52 cents per share. Data center revenue rose 78% from a year earlier. The company projected fourth-quarter revenue of $15 billion to $16 billion, below estimates near $17 billion, and said it expected PC shipments to fall 25% to 30% from the prior quarter. Traders focused on the outlook rather than the third-quarter result, and the shares fell through the session.
The size of the fall reflected how far the guidance sat below what the market had priced in. A shortfall of about $1 billion to $2 billion against estimates near $17 billion left little room for investors who had bought Intel shares on a recovery in chip demand. The warning on PC shipments added to the pressure, since personal computers remain a large part of Intel revenue.
Intel selloff spreads through chip stocks
Chip stocks fell with Intel on Friday. The Philadelphia Semiconductor Index lost more than 7.2% in a single session, a drop that capped a weak month for the group after a fall of more than 15.3% in October. Semiconductor shares have carried much of the market advance this year on demand for artificial intelligence hardware, so a sharp fall in one of the sector’s largest names hit sentiment across the group.
The Nasdaq decline was its largest one-day drop since June. Technology stocks led the market lower, and the session left the index down 2% for the week. The Dow and the S&P 500 also ended the week lower, extending a run of weekly losses to three for all three indexes.
Intel investors face a crowded week ahead
The calendar gives the market little rest. Monday brings the manufacturing survey and two large technology reports after the close. Tuesday brings the election result and another chip report. Wednesday and Thursday bring more results, and Friday brings the jobs data that often sets the tone for the weeks that follow. Each of those events can move prices on its own, and together they leave little room for a quiet week.
Attention now turns to a crowded calendar. Apple and Palantir are scheduled to release results after the market closes on Monday, November 2. Voters will decide all 435 House seats and 35 Senate seats on Tuesday, November 3. AMD is scheduled to report after the market closes that day, while Qualcomm, Arm and Arista Networks are set to report on Wednesday and Thursday.
The October employment report is due on Friday, November 6, at 8:30 a.m. ET. September payrolls increased by 29,000, and the three-month average was about 50,000. The Institute for Supply Management manufacturing survey is scheduled for Monday, with its services survey due on Wednesday. The September manufacturing PMI was 54.5, while its prices-paid index was 77.9. Bitcoin traded at $78,383 at 8:18 p.m. ET on Sunday, November 1.