BRAZIL · MARKETS
Key Facts
- Power Index Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 75.0 points (October 2026 edition).
- What is happening AI spending fears pushed the Nasdaq 100 down 6.7% in October, led by Alphabet and South Korean chip shares.
- Why it matters Investors doubt that record AI spending will pay off, while two US Federal Reserve officials wanted higher rates.
- The numbers The Nasdaq 100 fell 6.7% in October, the S&P 500 0.9% and South Korea’s Kospi stock index 16.2%.
- Who is who Alphabet owns Google; the Nasdaq 100 tracks the largest non-financial firms on the Nasdaq exchange; the S&P 500 tracks 500 large US firms.
- Prediction markets Polymarket gives 8.1% to an AI bubble burst in 2026 and 22.5% by June 2027 (2 November, 1:51 p.m. ET).
- What to watch Nvidia, an AI chip maker, publishes results on Tuesday, 17 November, with a call at 5 p.m. ET.
- What it means for you US investors in tech funds and Brazilians holding US shares face more volatility; travellers face no change.
Doubts over the cost of artificial intelligence hit tech shares from New York to Seoul in October. The Nasdaq 100 fell 6.7% for the month, and Brazilian investors holding US stocks felt it too.
Tech shares fell sharply in October as investors doubted that record spending on artificial intelligence, or AI, will pay off soon. The Nasdaq 100, which tracks the largest non-financial companies on the Nasdaq exchange, lost 6.7% over the month.
The sell-off reached from New York to Seoul. Brazilian and US investors with tech-heavy portfolios both felt it.
How Far the Sell-Off Went
The Nasdaq 100 closed on Friday, 30 October, at 28,385 points, down 3.46% on the day and 6.65% for the month. That was 9.1% below its Tuesday, 6 October high of 31,224.
The Nasdaq Composite, the broader tech-heavy index, fell 2.86% on Friday to 25,437. The S&P 500 fell 1.82% to 7,580 and sits 3.1% below its high of Tuesday, 6 October.
For October as a whole, the S&P 500 lost only 0.9%, which shows how concentrated the losses were in tech. US indexes were near Friday’s levels in early afternoon trading on Monday, 2 November.
South Korea Took the Hardest Hit
South Korea’s Kospi, the main stock index in Seoul, fell 16.2% in October. It closed on Friday, 30 October, at 5,730 points, down 3.5% on the day.
Chip makers such as Samsung Electronics and SK Hynix weigh heavily in the index, so it follows demand for AI hardware closely. The Nasdaq 100’s fall of 6.65% was less than half as large.
What Set Off the Latest Drop
Alphabet, the owner of Google, published third-quarter results on Wednesday, 28 October. Its shares fell 12.6% on Thursday, 29 October, to US$283.82.
Alphabet’s filing shows revenue up 25% to US$127.6 billion, with Google Cloud revenue more than doubling, up 103% to US$30.7 billion. Capital spending also jumped to US$51.4 billion in the quarter, against US$24.0 billion a year earlier.
Free cash flow, the cash left after capital spending, was negative US$9.1 billion, after a negative US$5.9 billion in the second quarter. Alphabet also reported net proceeds of US$28.7 billion from bond sales in the quarter.
Those figures put the cost of the AI build-out at the centre of the debate. Investors are asking how long such spending can run before profits follow.
Interest rates add pressure: the US central bank, the Federal Reserve, held its rate at 3.75% to 4.00% on Wednesday, 28 October. Two of its 12 voters wanted a quarter-point rise.
The Brazil Angle
Brazil’s Ibovespa, the main index of the São Paulo stock exchange, lost 9.9% in October and closed Friday at 167,922 points. It fell 13.9% on Monday, 26 October, after President Luiz Inácio Lula da Silva won re-election on Sunday, 25 October.
Brazilians can own US tech shares through BDRs, which are Brazilian-listed certificates backed by foreign shares. Those holders felt Friday’s drop directly.
B3, Brazil’s stock exchange, is shut on Monday, 2 November, for All Souls’ Day, and reopens on Tuesday, 3 November. The central bank’s official dollar rate, the PTAX, put one US dollar at 5.42 reais on 30 October.
What Prediction Markets Say
Polymarket, a crypto-based prediction market, gives 8.1% to an AI bubble burst in 2026 (2 November, 1:51 p.m. ET). About US$2.5 million has traded on that contract.
It gives 22.5% to a burst by 30 June 2027, in a thinner market of about US$46,000. A contract pays out only if at least three of a list of severe events occur.
Examples include shares of Nvidia, an AI chip maker, halving, or OpenAI or Anthropic, two AI developers, going bankrupt. Over the past day the 2026 price slipped about 1.5 points.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
What It Means for You
US investors in index funds should know that a few AI-linked giants carry heavy weight in the Nasdaq 100. Their moves swing the whole index, and a 6.7% monthly fall is sharp.
Travellers face no change, because the sell-off does not alter flights, visas or entry rules. Brazilian holders of BDRs face the same swings as US shareholders, plus moves in the real.
Related reports include the Global Economy briefing of 2 November and how falling AI stocks put copper and lithium on watch. More is on the Brazil hub and in Brazil Economy Explained.
What Is Not Known
The "trillions of US dollars" of lost market value cited in some coverage could not be confirmed at an index provider. Index providers publish index levels, not dollar losses, so this article reports index moves instead.
Why each stock fell is a market judgment, and the companies have not explained their share prices. It is unclear whether AI-spending doubts or the interest-rate outlook matter more.
What Comes Next
Nvidia reports results on Tuesday, 17 November, with a call at 5 p.m. ET. Brazil’s central bank decides on interest rates earlier, on Wednesday, 4 November.
The Fed meets again on Tuesday, 8 and Wednesday, 9 December. A strong Nvidia report would not by itself settle the doubts over AI spending.
Frequently Asked Questions
Why did tech stocks fall in October?
Investors doubted that record AI spending will pay off soon, and two US Federal Reserve officials wanted higher rates. Alphabet’s 12.6% one-day fall on Thursday, 29 October added to the pressure.
How much did the Nasdaq 100 fall?
The Nasdaq 100 fell 6.65% in October to 28,385 points on 30 October. The S&P 500 fell only 0.9% over the same month.
Did the sell-off hit Brazil?
Holders of US tech shares felt it, but the Ibovespa‘s fall came mainly on Monday, 26 October after Lula’s win. B3 reopens on Tuesday, 3 November.
What is an AI bubble?
An AI bubble is a fear that share prices of AI-linked firms run far ahead of the profits the technology can earn. Polymarket bettors give 8.1% to a burst in 2026.
What is the next big test for AI stocks?
Nvidia, an AI chip maker, reports results on Tuesday, 17 November. The US Federal Reserve meets on Tuesday, 8 and Wednesday, 9 December.
Sources: Alphabet, third-quarter 2026 results (SEC Form 8-K, 28 October 2026); Alphabet, quarterly report (SEC Form 10-Q, 29 October 2026); US Federal Reserve, FOMC statement, 28 October 2026; Nvidia, third-quarter results call announcement, 28 October 2026; B3, Brazil’s stock exchange, Ibovespa data; Banco Central do Brasil, PTAX dollar rate; closing levels of the Nasdaq 100, Nasdaq Composite, S&P 500, Kospi and Ibovespa, 30 September to 30 October 2026, from index and exchange data; Polymarket markets "AI bubble burst in 2026?" and "AI bubble burst by June 30, 2027?" (queried 2 November 2026, 1:51 p.m. ET) (all accessed 2 November 2026).
This article was drafted with automated assistance and reviewed before publication. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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