Stock indices fall on Alphabet earnings miss and AI spending concerns
U.S. stock markets declined Thursday as disappointing earnings from tech giant Alphabet sparked a broader selloff. Alphabet shares plunged 12 percent after the company missed revenue expectations and reported a negative free cash flow of 9 billion dollars, raising concerns about its artificial intelligence spending. Industrial equipment maker Caterpillar fell 9 percent despite beating earnings estimates, as investors grew cautious about companies priced for perfect results. The Nasdaq Composite dropped 1.4 percent, the S&P 500 fell 0.3 percent, and the Dow Jones declined 0.6 percent. Market sentiment shifted toward defensive positions and concerns about whether massive capital spending on artificial intelligence will deliver promised returns. Meanwhile, Treasury yields fell as investors sought safer assets amid the technology sector turmoil.
Key facts
- Alphabet stock fell 12.6 percent on October 29, 2026, marking its worst single-day drop ever and erasing approximately 500 billion dollars in market value
- Alphabet missed Q3 revenue expectations at 127.59 billion dollars versus estimates near 130 billion dollars, with adjusted earnings per share of 2.67 versus expected 3.02
- Alphabet reported negative free cash flow of 9.07 billion dollars and announced capital expenditures would increase again next year
- Caterpillar beat adjusted earnings per share at 7.20 versus consensus of 7.06 but fell 9.3 percent due to guidance suggesting only moderate fourth-quarter sales growth
- Caterpillar reported record revenue of 20.7 billion dollars and record backlog of 78 billion dollars, with strong data center and power generation demand
- The S&P 500 closed down 0.3 percent at 7,720.39, the Nasdaq Composite fell 1.38 percent to 26,184.72, and the Dow Jones Industrial Average declined 0.6 percent
Limits of this briefing
Search results are primarily from centrist mainstream financial media outlets rather than explicitly left-leaning or right-leaning political commentary sources, suggesting this market event has not yet generated significant partisan political framing. The story centers on financial mechanics and earnings quality rather than policy or ideological issues.
Sources
- Yahoo Finance: Stock market today: Dow, S&P 500, Nasdaq slip as Alphabet stock sinks 12% and AI jitters return Centre
- CNBC: Stock market rocked as investors dump tech shares; Nasdaq suffers worst day since June Centre
- NBC News: Alphabet shares record their worst day ever, shedding $500 billion in value Centre
- Benzinga: S&P 500 Ends Three-Day Surge as Alphabet Shares Plunge: Greed Index Remains in 'Fear' Zone Centre
- Bloomberg: Caterpillar Shares Slump as AI Trade Faces New Reality Check Centre