Equity indices finished mixed last week, with the S&P 500, Dow and Nasdaq declining 0.6%, 0.9% and 2.0%, respectively, while the Russell 2000 gained 1.3%. Friday’s selloff erased earlier gains as technology valuations and AI spending remained under scrutiny. Intel fell nearly 29% on Friday following a disappointing profit outlook. October closed with the S&P 500 down 0.9%, while its equal-weight counterpart gained 4.9%, highlighting the month’s rotation away from the largest stocks. Oil benchmarks remain high and Treasury yields eased slightly, with the 10-year yield finishing the week at 4.94% (-5bps WoW). The Federal Reserve held its policy rate at 3.75%-4.00% last Wednesday, with two dissenters favoring a quarter-point increase. The official FOMC statement described economic and productivity growth as strong, spending as resilient and inflation as elevated. At Stenger Family Office, we favor companies with durable cash generation, manageable debt and the ability to protect margins if financing and operating costs remain elevated in the current macroeconomic backdrop.
AI-Narrative Losers from Last Week: Intel and Reddit. Upstream of AI is Intel (NASDAQ: INTC), which fell ~29% on Friday after its profit outlook disappointed investors, despite third-quarter revenue growing 21% YoY and Data Center and AI segment revenue growing 78% YoY. (The stock is also down over 8% Monday at time of writing). Management expects PC weakness through at least 1H27 and guided fourth-quarter adjusted EPS to $0.25, down from $0.52 in the third quarter. Meanwhile Reddit (NYSE: RDDT), downstream of AI, also fell ~29% Friday despite reporting 53% revenue growth and a 75% increase in diluted EPS. Its fourth-quarter revenue outlook missed consensus expectations, while management warned that declining search referrals could pressure user counts. Both stocks’ volatility last week highlight how vulnerable stock prices are in the short run to prevailing narratives. At Stenger Family Office we see major drops in individual names we like as potential buying opportunities, which Nick gives context and perspective during Ep. 212 – Fire Sale of The Nick Stenger Show.
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