AI bubble fears drive $1.5 trillion October selloff in US stocks

According to a Wall Street CN report on November 3, 2026, U.S. mega-cap tech stocks suffered their steepest monthly sell-off since March 2025 in October 2025. Over that single month, U.S. equity market value evaporated by more than $1.5 trillion, and the Nasdaq Composite plunged 5.3%, marking its worst month since March 2025. The S&P 500 closed lower for two consecutive months.

The sell-off was fueled by mounting doubts over whether AI capital spending can generate returns. Senior analysts Bert Dohmen and Dion Dohmen at market research and investment analysis firm Dohmen Capital Research wrote that the selling spread outward from the AI and semiconductor sectors, triggering cascading waves of leveraged liquidations and margin calls. Even liquid assets such as gold and silver were not spared. At the same time, questions over whether AI capex can deliver meaningful returns have moved from a fringe concern to the central cloud overhanging the entire sector.

Well-known institutions have moved to raise the alarm. According to The Wall Street Journal, Elliott Investment Management, led by Paul Singer, stated plainly in its October letter to investors that nearly every alarm bell warning of an impending major bear market is currently ringing, and compared the current market environment to the Roaring Twenties before the Great Depression.