U.S. stocks fell, led by a 1.37% drop in the Nasdaq after Alphabet shares slid 12.6% on a revenue miss and accelerated AI-related cash spending. The Dow fell 0.25% and the S&P 500 lost 0.30%, while the Russell 2000 rose 1.0%.
All three major U.S. indexes fell on Thursday as investors reassessed large technology companies’ AI spending and digested earnings and inflation data. Alphabet’s revenue miss and accelerated AI-related cash burn sent its shares down 12.6%, weighing on the communication services sector; semiconductor stocks fell 1.4%.
The Dow Jones Industrial Average fell 132.54 points to 52,342.56, the S&P 500 lost 23.59 points to 7,720.39, and the Nasdaq Composite dropped 365.13 points to 26,184.72. The advance estimate showed third-quarter GDP growth of 3.4%, above analyst expectations. Of the 253 S&P 500 companies that had reported, 81% beat analyst expectations; analysts expected aggregate third-quarter earnings growth of 31.0% year over year.
Caterpillar fell 9.3% despite topping quarterly profit estimates, while Eli Lilly rose 6.6% after lifting its revenue outlook and Ford gained 12.4% following a quarterly revenue beat. Fortinet and ServiceNow each dropped more than 20% after results. Amazon fell 6.5% in extended trading after giving disappointing fourth-quarter sales guidance.
