US stocks are trading lower, with the Nasdaq indices taking the biggest hit as investors reassess the earnings outlook—and the cost of delivering on the AI growth story.

At the latest snapshot, the major indices stood as follows:

• Dow: down 176.04 points, or 0.34%, at 52,172.21
• S&P 500: down 88.50 points, or 1.15%, at 7,631.89
• Nasdaq Composite: down 569.26 points, or 2.17%, at 25,615.47
• Russell 2000: down 18.92 points, or 0.66%, at 2,840.30
• Nasdaq 100: down 752.25 points, or 2.56%, at 28,650.25

The pattern of declines reflects the makeup of each benchmark: the Nasdaq indices carry the heaviest weightings in technology stocks, so they tend to move hardest when the earnings behind the AI trade come into question.

The selling underscores a shift in what investors are willing to reward. Strong AI growth still matters, but the market is becoming more demanding about what that growth costs, when the investment will generate returns, and how much cash is left along the way. In other words, investors are pressing for evidence that heavy AI spending will ultimately convert into durable profits.

Amazon and Intel both reported after yesterday's close, and both disappointed investors—though for different reasons. Amazon's results raised questions about spending and cash flow, while Intel's guidance cast doubt on the durability of its recovery. Still, the two reports leave buyers facing the same overarching question: does the outlook justify the stock price?

Amazon: strong growth comes with a heavy spending bill

For Amazon, the concern centers on spending and cash flow. AWS continues to grow strongly, but building the infrastructure needed to support that demand requires enormous capital investment. That is the defining trade-off of the AI buildout: servers, data centers and networking equipment have to be paid for up front, while the returns they are meant to produce take longer to show up in the financials. That spending absorbs cash generated by the business, while a softer holiday sales outlook adds uncertainty about the consumer—a sensitive signal, since the holiday stretch is traditionally the heaviest sales period of the retail calendar.

In short, investors want a clearer path from AI demand to sustainable cash flow. Growth matters, but so does the cost of delivering it.

On the technical side, sellers have taken the price below two important reference points: the 200-day moving average at $243.38 and the 50% midpoint of the rally from the February low at $241.60. Moving averages are among the most closely watched trend gauges in technical analysis, while the 50% midpoint marks the level at which half of a prior rally has been given back. The stock was recently trading near $233.22.

Those breaks weaken the technical picture and turn the $241.60–$243.38 area into overhead resistance. Buyers need to reclaim that zone to begin repairing the damage. Until then, any bounce would leave the price below those key technical levels, with sellers maintaining the advantage.

Intel: an earnings beat fails to offset concerns about the recovery

For Intel, the concern is the durability of its recovery. The company beat earnings expectations, but disappointing forward guidance shifted attention toward the challenges ahead. Weak PC demand, manufacturing constraints and continued heavy investment create hurdles for the coming quarters.

The reaction is a familiar feature of earnings season: share prices embed expectations about the future, so forward guidance can carry more weight than a beat on past results.

An earnings beat can attract attention. The outlook helps determine whether buyers stick around.

Intel shares are getting hammered, falling approximately 28.6% to $66, their lowest level since April. Despite the decline, the stock remains well above its year-end level near $37.50. However, it has surrendered a substantial portion of a rally that took the price as high as $142.35 this year.

That is a sharp reminder of how quickly an elevated share price can become vulnerable when expectations for future growth are marked down.

The AI trade faces a tougher test

Taken together, the two reports challenge an important assumption behind the technology rally: that strong AI demand will be enough to support higher stock prices.

Demand itself can remain strong even as the spending required to meet it weighs on cash flow and profitability. The issue, in other words, is not the strength of AI demand but the cost of servicing it. And when expectations are already elevated, investors have less patience for uncertainty about the timing and size of future returns.

The fundamental concerns are also being reinforced by technical breaks. Both the Nasdaq Composite and the Nasdaq 100 fell below their 100-day moving averages yesterday. Today's gaps lower have broken additional support, giving sellers more control and leaving buyers with work to do.

Nasdaq Composite: another support break opens the door lower

The Nasdaq Composite broke below its 100-day moving average near 26,252 yesterday, closing at 26,184.72. Today, the index has gapped below its next key technical level at 25,831.74, trading at 25,615.47 at the opening snapshot—down 2.17%. A gap lower occurs when an index opens below its prior close, reflecting sentiment that shifted outside regular trading hours.

With that support broken, the next major downside focus shifts toward the 25,035 area, where the rising 200-day moving average and the 38.2% retracement are clustered. Like the 50% midpoint, the 38.2% level is a Fibonacci-based retracement reference that measures how much of the prior rally has been surrendered. The combination makes that zone an important barometer if the selling continues. Buyers may look to lean against it, with risk defined by whether the support holds or breaks.

What would improve the picture before then? The first step would be to get back above—and stay above—25,831.74. That would begin to question today's break lower. Beyond that, buyers would need to reclaim the 100-day moving average near 26,252 to take back more control.

Until those levels are recovered, sellers retain the technical advantage.

Nasdaq 100: the old floor becomes a key resistance area

The Nasdaq 100 also broke below its 100-day moving average near 29,559.71 yesterday, falling 1.38% to close at 29,402.51. Today's gap lower has taken the index below a key swing area between 28,822 and 28,953. At the opening snapshot, the index was trading at 28,650.25, down 2.56%.

The break matters because an area that previously attracted buyers now becomes a test for any recovery. If the price rallies toward that old floor and sellers lean against it, the bearish bias would remain intact.

On the downside, the next major target is the 38.2% retracement of the rally from the April low at 28,108, followed by the rising 200-day moving average at 27,894.40.

For buyers, the first task is to reclaim the 28,822–28,953 swing area and establish support above it. That would help stabilize the near-term picture. A recovery above the 100-day moving average near 29,559.71 would be needed to make a stronger case that buyers are regaining control.

For now, the earnings concerns have given investors a reason to sell, and the technical breaks have given sellers added confidence. Buyers need to reclaim the broken levels to challenge that control.