Wall Street retreated on Thursday, with the tech-heavy Nasdaq leading the decline as underwhelming results from Google parent Alphabet fueled doubts regarding the sustainability of the global technology rally.
Alphabet shares tumbled more than 12 percent, wiping approximately $480 billion from the tech giant’s market capitalization during a difficult trading session.
European markets had posted gains earlier in the day, following the European Central Bank’s decision to hold interest rates steady, which mirrored the Federal Reserve’s move to maintain US borrowing costs on Wednesday.
The euro initially slipped after Christine Lagarde announced her intention to step down as ECB president in February, though the currency rebounded following her subsequent press conference.
The sell-off in Alphabet shares pressured all three major US equity indices, with the tech-focused Nasdaq suffering a 1.4 percent loss.
Alphabet’s decline followed a report showing disappointing growth in both its search business and overall advertising revenue.
The company also indicated that capital expenditure would continue to rise significantly in 2027, following estimates that 2026 spending would fall between $195 billion and $205 billion.
“I would broadly think of all of this as a long-range planning process, not a short-term allocation exercise,” Google CEO Sundar Pichai told analysts of the company’s investment splurge.
However, the announcement left investors feeling uneasy.
The Alphabet report “is renewing concerns about AI investment returns, helping push the Nasdaq <a said a note from Briefing.com.
Shareholders “want clear evidence that all of this investment will eventually translate into stronger profits,” Angelo Kourkafas of Edward Jones said.
Nevertheless, Kourkafas noted that the market weakness was not widespread, as companies like MasterCard and Eli Lilly saw their shares rise following their own <a Money is not exiting equities. It's just moving around and rotating," Kourkafas said.
<a s preferred inflation metric—the Personal Consumption Expenditures (PCE) price index—climbed 3.6 percent year-on-year in September, marking an increase from the prior month.
These reports were released one day after the Fed opted to keep interest rates unchanged despite persistent inflation.
As anticipated by economists, the ECB maintained its benchmark interest rate at 2.5 percent, following two previous hikes earlier this year.
The decision was announced just hours after Lagarde revealed she would step down early, in February 2027.
