Stock market today: Dow, S&P 500, Nasdaq slip as Alphabet stock sinks 12% and AI jitters return
US stocks retreated on Thursday as Alphabet’s third-quarter earnings triggered a sell-off, while renewed anxiety regarding artificial intelligence weighed on tech-heavy indexes. The Dow Jones Industrial Average (^DJI) declined nearly 0.3%, while the S&P 500 (^GSPC) dropped approximately 0.3%. The tech-focused Nasdaq Composite (^IXIC) fell by about 1.4%.
The recent rally in tech stocks stalled as investors processed the Federal Reserve’s decision to hold rates steady on Wednesday alongside earnings reports from Microsoft (MSFT) and Google parent company Alphabet (GOOG, GOOGL). While Microsoft exceeded analyst expectations for both revenue and earnings, Alphabet’s sales figures fell short. Although cloud growth reached 103%, concerns surrounding the tech giant’s free cash flow and the return on investment for its AI initiatives pressured the stock, which plummeted more than 12%.
(^DJI)
A broader sell-off in AI-related equities intensified, impacting the iShares Semiconductor Index ETF (SOXX) and software stocks (IGV). Companies such as Fortinet (FTNT) and ServiceNow (NOW) saw double-digit declines following their respective earnings disclosures.
Markets are bracing for further hyperscaler results after Thursday’s closing bell, with Amazon (AMZN) scheduled to report. Other individual stocks reacted to their own earnings news: Eli Lilly (LLY) climbed 6% on the back of strong third-quarter results for its GLP-1 medications. Conversely, Caterpillar (CAT) shares slid as much as 12% after the industrial giant provided a forecast that disappointed Wall Street. Shares of the grocery chain Sprouts (SFM) tumbled 22% after the company announced a price-cutting strategy <a s decision on Wednesday afternoon to keep interest rates unchanged. The move included two dissenting votes from officials who favored a rate hike due to persistent preferred inflation gauge indicated that prices accelerated in September, with the Personal Consumption Expenditures index rising 3.6% year over year.
Carvana stock jumps as on record quarter, vehicle sales
Carvana (CVNA) shares surged 15% after the online car retailer announced a 42.4% year-over-year increase in third-quarter revenue, reaching $8.04 billion and marking its first quarter with sales surpassing the $8 billion threshold.
Retail vehicle sales climbed 39% to 217,385 units, marking the first time the company has sold more than 200,000 vehicles in a single quarter.
Carvana also noted that it refinanced $1.7 billion in senior secured notes, a strategic move projected to reduce annual interest expenses by approximately $45 million.
