Halloween 'carnage' on Wall Street as AI share price slump sparks fears of stock market crash

Updated: 07:05 EDT, 30 October 2026 A Halloween slump in technology stocks has sparked fears of a market crash that would hammer the savings and pensions of millions of British families.With fear stalking trading rooms around the world, the tech-heavy Nasdaq index in New York looked set to follow up Thursday’s 1.4 per cent slide with a drop of more than 2 per cent on Friday.Analysts warned of ‘tech carnage’ with shares in US giants Amazon and Intel among the biggest losers following bleak results on Thursday night.Intel shares were on course to open around 25 per cent lower – wiping around £90billion off its value – while traders were betting on a 7 per cent slump at Amazon worth some £140billion.The latest sell-off comes after Google owner Alphabet tumbled more than 12 per cent on Thursday night – wiping close to £400billion off its value.The tech titan – one of the so-called Magnificent Seven – is now down 30 per cent since its peak in May while the Nasdaq is off more than 5 per cent. Traders are braced for turmoil on dealing floors around the world A host of US tech stocks, driven to record highs this year on a wave of AI mania, are now in so-called ‘bear market’ territory – meaning they are down more than 20 per cent from their peak.The FTSE 100 index has held up in the face of the sell-off – at least for now – as it benefits from a lack of exposure to tech and AI.London’s blue-chip index edged up 0.2 per cent to 10,744 on Friday morning despite the ructions on Wall Street.But the tech slump is proving painful for millions of British investors who are exposed to the US stock market through their pensions and ISAs.A host of Britain’s most popular investments, from technology funds and trusts and those that track major global indices, are packed full of US stocks now in reverse.Neil Wilson, investor strategist at Saxo, warned of ‘tech carnage as October wraps up’ as investors fret over whether huge spending on AI infrastructure such as data centres will pay off.He said: ‘This is starting to look quite ugly. The selloff looks a bit indiscriminate and shows that investors don't just want capex, they want to see the returns already.’The AI trade has run into turbulence recently as investors grew uneasy about the billions Big Tech has poured into scaling up AI infrastructure while awaiting evidence of stronger returns.Several companies have tapped the bond market to finance those investments, amplifying concerns that debt-funded spending will become harder to justify as borrowing costs rise.Jake Behan, head of capital markets at Direxion, said the slump in share prices in recent days ‘is a good example of how the AI trade has changed’.He added: ‘At this point, the market isn't just asking how fast you can grow. It's asking what you have to spend to get there.’The AI trade got a brief respite earlier this week when AI lab Anthropic – which is behind the Claude model – unveiled plans to list on the US stock market with a value of up to £1.5trillion.Russ Mould, investment director at AJ Bell, said: ‘The FTSE 100’s lack of tech exposure has proved to be a blessing in disguise.‘The UK index is standing tall amid a global tech sell-off. Helped by record profits for index heavyweight BP and a well-received update from pharma giant AstraZeneca, the index managed a healthy gain on Friday. This followed heavy selling on Wall Street and parts of Asia as fears about AI spending intensify.‘Companies seen as victims of AI disruption in the software and data space, including Sage and Relx, made progress, to outweigh a weak showing from miners and London’s limited contingent of tech and AI-related plays. Miners are linked to the AI theme as copper is a key component for data centres.‘Chancellor John Healey will be pleased to see that the positive reaction to his Budget in currency and bond markets hasn’t unravelled, with the pound higher and gilt yields easing. Oil prices remain elevated but are down on their highs from the week.’DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you