The S&P 500 gave back all of October's gains in two sessions. By Friday's open the index had fallen 1.22% to 7626.09. That is below the September 30 close (7651.54).
The reason is earnings season. Companies are publishing quarterly results and forecasts for the next quarter. Intel's weak guidance and Amazon's cautious figures sent the technology sector tumbling.
For traders, these are days of high volatility. Fear in the market got more expensive, and index moves are measured in percentages per session.
How deep did the index fall?
The month reversed in two days. As recently as Wednesday evening, October was up 1.21%; now it is down 0.33%.
- 7818.93 - the month's high, set on October 6
- 7743.98 - the index level on Wednesday
- about 118 points were wiped off the index by two sessions of earnings
- 2.41 points remain to the month's lowest close (7623.68 on October 23)
Why did the market reverse?
The main source of the sell-off is Intel. The stock opened at $64.98, down 29.42%. That is about $140 billion of market capitalization, which now stands at $345.13 billion.
- Weak guidance. The company expects fourth-quarter revenue of $15.0-16.0 billion versus the expected $17.1 billion, and earnings of $0.25 per share.
- The CFO's words. David Zinsner told analysts that 2027 is unlikely to bring positive free cash flow.
- Costs will not come down. Capital expenditure in 2026 will stay at the $20 billion level and rise sharply thereafter.
- Target cuts. Susquehanna cut its price target to $75 from $105, StoneX - to $100 from $140.
Who suffered along with Intel?
The blow hit the entire chip sector. Broadcom lost 4.97%, Nvidia - 3.35%. Reddit fell separately - about -22%.
- Nasdaq 100 -2.79% - the biggest loser among the indices
- Nasdaq Composite -2.36% - the broad technology market
- Dow Jones -0.36% - barely noticed the sell-off
- VIX +9.83% to 18.88 - fear got more expensive
VIX is the S&P 500 expected volatility index.
The day's second megacap, Amazon, looks milder. Revenue came in at $201.94 billion, up 12%. Cloud unit AWS grew 39% to $45.98 billion with operating profit of $28.08 billion; fourth-quarter guidance is $240-247 billion.
The weak spot is cash flow. Free cash flow went negative by $42.4 billion, with confirmed capital expenditure of about $220 billion for 2026.
What does this mean for a trader?
The trend is not broken. Since the start of the year the S&P 500 is still up 10.80%, and over 12 months - up 11.08%. In other words, this is a giveback of what was gained during the month.
The main point: even after the plunge, Intel is holding +72.73% since the start of the year. A move of that scale over two sessions is about earnings volatility, not about a change in the market's direction.
The last session of October lies ahead. It will decide whether the month closes in the red or not. It is convenient to keep the dates of upcoming earnings and events in the economic calendar, and the tools for working with indices - find a challenge for indices.
Did you watch Intel open at -29%?
Earnings season delivers days like this in batches. One CFO forecast - and minus 118 points on the index in two sessions. What stops you from capturing them is not analysis but nominal size: a Nasdaq position sized to a personal deposit of a couple thousand dollars, on -2.79%, brings in an amount on the level of a food delivery order. In prop trading the logic is different: you pay for selection, the company provides a trading account and risk limits, and profits are split. Megacap earnings continue next week too - it is better to understand the mechanics before then.