**AI Sector Faces Major Declines Amid Earnings Reports**
On Friday, October 27, the Nasdaq dropped 2.9%, marking its worst month since March 2025 with an overall October decline of 5.2%. The Philadelphia Semiconductor Index (SOX) plummeted over 7% on the same day, with a stark 15% decrease for the month. Intel Corp. (INTC) experienced a record one-day drop of nearly 29% after projecting Q4 revenues of $15 billion to $16 billion, significantly below the $17 billion expected by Wall Street. Amazon.com Inc. (AMZN) also saw a decline despite a 39% growth in its AWS cloud business, primarily due to a surge in capital expenditures.
**Midterm Elections Impacting AI and Defense Spending**
The upcoming midterm elections on November 7 will include votes on 41 local data-center measures across 10 states, with Ohio contributing the majority. This reflects growing public sentiment against rapid expansion of data centers, potentially affecting future tech spending. Concurrently, the elections will influence the control of Congress, impacting a proposed $1.5 trillion defense budget. Key components include $53.6 billion for the Pentagon’s new drone-warfare unit and missile defense, as the U.S. military adapts to the changing economics of warfare. Analysts are concerned that delays in passing this budget could slow down critical advancements in both AI and military spending.
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