Wall Street slides as Alphabet's revenue miss revives worries over AI spending
US stock indexes fell after Alphabet's weak quarterly report sent its shares down 13.2%. Reuters also reports US GDP growth above forecasts and a Fed hold on rates.
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what happened
According to Reuters, US stocks fell on Thursday as investors reassessed the huge spending of big technology companies on artificial intelligence. The Nasdaq Composite lost 1.66%, the S&P 500 dropped 0.63% and the Dow Jones Industrial Average slipped 0.59%. Alphabet's shares plunged 13.2% after its quarterly revenue came in below expectations and its cash burn on AI projects accelerated. Smaller companies in the Russell 2000 gained 0.8%, bucking the trend.
On Wednesday the Federal Reserve kept rates unchanged, saying price pressures remain elevated and that its next move will depend on more information. On Thursday, a first estimate showed third-quarter US GDP growing faster than expected, while inflation picked up amid a war-related oil supply squeeze.
why it matters
Strong growth, elevated inflation and a Fed pause limit hopes for near-term rate cuts and push investors to separate tech firms that can fund AI from those borrowing to do so.
market impact
Tech stocks and the Nasdaq: pressure from worries over AI spending; Russell 2000 holding up better than the market
- Nasdaq Composite pressure down — worries about AI spending weigh on technology shares
- Alphabet pressure down — revenue miss and faster cash burn on AI projects
- Russell 2000 pressure up — investors rotate into smaller firms outside the AI trade
tags
instruments
sources
- Wall Street slides as Alphabet revenue miss revives AI capex jitters — Reuters, 29 October 2026 at 18:27 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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