Big Tech's AI bill comes due, but Michigan automakers see a rebound

For a third straight week, the artificial intelligence trade cracked, and this time the blow came from the companies writing the checks.

Alphabet Inc. missed revenue estimates on Wednesday, Oct. 28, burned roughly $9 billion of cash and plans to spend more next year. Its shares fell nearly 13% on Thursday, the worst day in the stock's history, erasing about $482 billion in market value.

Amazon.com Inc. followed with earnings of $1.89 a share versus $1.96 expected and a 2027 capital budget "meaningfully more" than this year's roughly $220 billion.

Intel Corp. guided fourth-quarter revenue well below estimates and warned it will burn cash this year. Its stock plunged about 28% on Friday, its steepest one-day drop in more than 50 years.

By Friday midday, the Nasdaq 100 was down 2.6%, at its lowest since early August and heading for a third straight weekly loss.

The Federal Reserve held rates at 3.75% to 4% on Wednesday in a 10-2 vote, with Gov. Lisa Cook and Cleveland Fed President Beth Hammack voting for a hike.

Chair Kevin Warsh refused to signal a December move, but he did address the AI-driven sell-off.

More: Why Meta's spending sent stocks lower during a volatile market week

"Interest rates get in the cracks. Interest rates affect directly or indirectly almost everything," he said.

He added that investors are becoming selective about the kinds of investments they make, with credit spreads widening for certain assets and financial conditions tightening for others.

Thursday's data cut both ways: third-quarter GDP growth of 3.4% beat the 3.2% consensus, while the PCE price index accelerated to 3.6% from 3.4%. Traders now see a 74% chance of a December hike, down from 85% after the meeting, per CME FedWatch.

Defensive stocks and Detroit went the other way as investors rotated out of tech and into Treasuries.

More: GM's new move aims to put its stock in the company of Amazon and Apple

The 10-year Treasury yield slipped to 4.94%, touching 4.89% on Friday, its lowest since early September. The 2-year fell to 4.62% and the 30-year to 5.31%.

Health care stocks are up more than 10% in October while the S&P 500 is slightly lower, the sector's widest monthly lead over the index since November 2000.

Michigan's automakers rebounded. General Motors Co. gained about 14%, its biggest weekly rise since October 2025. The stock jumped 5.5% on Tuesday after GM said it will move its listing to Nasdaq on Nov. 17 and prepare its Lansing Delta Township plant for hybrid production.

Ford Motor Co. rose about 5% after Wednesday's results. Revenue of $49.53 billion and adjusted earnings of 49 cents a share beat forecasts of $46.24 billion and 41 cents, respectively, and Ford raised the low end of its full-year profit outlook to $10.5 billion. "Ford delivered a strong quarter as we're entering a defining phase of the company's transformation," CEO Jim Farley said.

Benzinga is a financial news and data company headquartered in Detroit.