U.S. Stocks May See Initial Weakness As Alphabet Plunges

The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to move to the downside after ending yesterday’s choppy session modestly higher.

Weakness among technology stocks is likely to weigh on Wall Street, as reflected by the 1.3 percent slump by the tech-heavy Nasdaq 100 futures.

The downward momentum for the tech sector comes amid renewed concerns about AI spending following disappointing quarterly results from Google parent Alphabet (GOOGL).

Shares of Alphabet are plunging by 11.1 percent in pre-market trading after the company reported weaker-than-expected third quarter revenue as well as negative free cash flow.

Construction equipment maker Caterpillar (CAT) is also plummeting by 11.7 percent in pre-market trading even though the company reported better-than-expected third quarter earnings and revenue.

On the other hand, shares of Microsoft (MSFT) are jumping by 2 percent in pre-market trading after the software giant reported fiscal first quarter results that exceeded analyst estimates.

The futures remained firmly negative following the release of a closely watched Commerce Department report showing consumer prices in the U.S. increased in line with economist estimates in the month of September.

Meanwhile, a separate Commerce Department report showed economic growth in the U.S. exceeded economist estimates in the third quarter of 2026.

After moving notably higher over the two previous sessions, stocks turned in a relatively lackluster performance during trading on Wednesday. The major averages spent much of the day lingering near the unchanged line.

The major averages eventually closed modestly higher. The Dow edged up 97.53 points or 0.2 percent at 52,475.10, the S&P 500 rose 21.38 points or 0.3 percent to 7,743.98 and the Nasdaq climbed 72.04 points or 0.3 percent to 26,549.85.

The higher close on Wall Street came after the Federal Reserve announced its widely expected decision to leave interest rates unchanged following its latest meeting.

The Fed said it decided to maintain the target range for the federal funds rate at 3.75 to 4.0 percent in support of its dual goals of maximum employment and inflation at the rate of 2 percent over the longer run.

Unlike last month’s unanimous decision to raise rates by a quarter point, there was some division among Fed officials at the latest meeting.

The central bank revealed that Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack voted against leaving rates unchanged, preferring to raise rates by another quarter point.

The Fed’s accompanying statement acknowledged inflation remains elevated but said the accumulation of more information will help determine the policy stance appropriate to ensure a timely return of inflation to the 2 percent goal. The Fed declared it “will deliver price stability.”

The central bank’s next monetary policy meeting is scheduled for December 8-9, with CME Group’s FedWatch Tool currently indicating an 85.0 percent chance the Fed will raise rates by a quarter point.

Even after the Fed announcement, traders seemed reluctant to make more significant moves ahead of the release of earnings news from Microsoft and Alphabet after the close of trading.

Most of the major sectors ended the day showing only modest moves, although biotechnology stocks moved sharply higher, driving the NYSE Arca Biotechnology Index up by 2.1 percent.

Significant strength also emerged among semiconductor stocks, as reflected by the 1.8 percent gain posted by the Philadelphia Semiconductor Index.

On the other hand, transportation stocks showed a substantial move back to the downside, with the Dow Jones Transportation Average tumbling by 2.5 percent after ending the previous session at its highest closing level in well over a month.

Interest rate-sensitive housing and utilities stocks also came under notable selling pressure over the course of the session.

Commodity, Currency Markets

Crude oil futures are slumping $1.18 to $101.60 a barrel after spiking $2.88 to $102.78 a barrel on Wednesday. Meanwhile, after sliding $23 to $4,051.60 an ounce in the previous session, gold futures are falling $14.40 to $4,037.20 an ounce.

On the currency front, the U.S. dollar is trading at 157.98 yen versus the 157.82 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1138 compared to yesterday’s $1.1152.

Asia

Asian stocks ended mixed on Thursday as investors reacted to the U.S. Federal Reserve’s interest rate decision as well as earnings from tech heavyweights, including Alphabet, Microsoft and Samsung Electronics.

Ongoing diplomatic efforts between regional Middle Eastern powers to avoid an escalation between the U.S. and Iran helped limit regional losses, if any.

Google parent Alphabet slumped more than 10 percent in after-hours trading after the company came up short of Wall Steet expectations despite posting strong revenue growth in its third quarter. The company’s search and advertising sales missed estimates.

On the contrary, Microsoft shares jumped over 5 percent. The technology giant delivered better-than-expected earnings and revenue in its fiscal first quarter and kept its capital expenditures in check, offering some respite to investors worried over rising AI spending.

The U.S. dollar was little changed in Asian trading ahead of the release of PCE inflation data, which could sway the Fed’s future decisions.

Gold prices fell more than 1 percent toward $4,000 an ounce after the Fed offered little clarity on its next move.

Brent crude prices traded below $115 a barrel, moving away from four-year highs following fresh diplomatic efforts to end the war in the Middle East.

Iran’s Foreign Minister Abbas Araghchi said Teheran continued to give diplomacy a chance. According to the Wall Street Journal, U.S. President JD Vance had reached out to Iranian national security official Mohsen Rezaei.

U.S. President Donald Trump confirmed that negotiations were underway through mediators but stressed he didn’t know whether they would bear fruit.

Elsewhere, Yemen’s Houthis launched an attack on the Aden airport on Wednesday after issuing evacuation warnings due to escalating violence.

Global commodity prices are set to surge 23 percent in 2026 as a result of global conflicts and EI Nino, the World Bank said in a report.

China’s Shanghai Composite Index dropped 0.8 percent to 3,651.43 amid weak global AI sentiment. Hong Kong’s Hang Seng Index slipped 0.6 percent to 22,958.65.

Japanese markets advanced following Advantest’s improved profit forecast. While shares of the chip equipment maker soared 6 percent, the Nikkei 225 Index closed 1.1 percent higher at 64,659.47. The broader Topix Index rose 0.3 percent to 4,003.28.

Conglomerate Hitachi plummeted 9.8 percent despite the company raising its full-year guidance for the second time in fiscal 2026.

Seoul stocks ended sharply lower as bellwether Samsung Electronics delivered weaker-than-expected third-quarter earnings. The Kospi Index slumped 1.2 percent to 5,937.66.

While shares of Samsung Electronics slumped 4.1 percent due to investor disappointment over a lack of detail about returns to shareholders, SK Hynix rallied 2.6 percent to build on its strong showing this week.

Australian markets eked out modest gains, with banks rising as traders priced in another Reserve Bank of Australia rate hike at its November 3 meeting. The big four banks rose around 2 percent each, offsetting selling in the mining sector.

The benchmark S&P/ASX 200 Index rose haff a percent to 8,891.80, while the broader All Ordinaries Index settled 0.5 percent higher at 9,012.60.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index edged up 0.1 percent to 13,710.17, extending gains from the previous session after the Reserve Bank of New Zealand unexpectedly held the OCR at 2.75 percent.

Europe

European stocks have advanced on Thursday after the U.S. Federal Reserve held interest rates steady, as widely expected, despite persistent inflation and dissents from Fed governor Lisa Cook and Cleveland Fed President Beth Hammack.

Investors also digested earnings from tech heavyweights, including Samsung Electronics, Alphabet and Microsoft.

The U.K.’s FTSE 100 Index is up by 0.5 percent, the German DAX Index is up by 0.9 percent and the French CAC 40 Index is up by 1 percent.

Repsol shares have advanced. The Spanish energy group announced a new share buyback program of €950 million after announcing a sharp rise in profits in the third quarter.

French engineering and technology company Technip Energies has also soared after beating third quarter core profit expectations even as revenue missed.

Automaker Renault has also surged after reporting a better-than-expected 1.4 percent increase in third quarter revenue.

Shell has also rallied. The British oil and gas giant hiked its quarterly share buyback to $5 billion after nearly doubling its quarterly year-year adjusted earnings and reported record refining margins.

Advertising group WPP has also jumped after logging a year-on-year increase in revenue for the third quarter and confirming its full-year outlook.

Sportswear maker Adidas has also surged after achieving record results in the third quarter of 2026 and increasing its full-year profit outlook.

On the other hand, lender Lloyds Banking has shown a significant move to the downside on muted third-quarter results.

Commodities group Glencore has also moved sharply lower after maintaining its full-year 2026 production guidance.

German real estate group Vonovia has also slumped after lowering its 2028 targets.

U.S. Economic News

A closely watched report released by the Commerce Department on Thursday showed consumer prices in the U.S. increased in line with economist estimates in the month of September.

The Commerce Department said its personal consumption expenditures (PCE) price index climbed by 0.5 percent in September after rising by 0.3 in August. The increase matched expectations.

The report also said the annual rate of growth by the PCE price index accelerated to 3.6 percent in September from 3.4 percent in August, while was also in line with estimates.

Excluding food and energy prices, the core PCE price index rose by 0.3 percent in September, matching an upwardly revised increase in August as well as expectations.

The annual rate of growth by the core PCE price index ticked up to 3.1 percent in September from 3.0 percent in August. The uptick also came in line with economist estimates.

The Federal Reserve’s preferred readings on consumer price inflation were included in the Commerce Department’s report on personal income and spending.

The report said personal income rose by 0.2 percent in September after rising by 0.3 percent in August, while personal spending climbed by 0.5 percent in September after jumping by 0.9 percent in August.

Economic growth in the U.S. exceeded economist estimates in the third quarter of 2026, according to a separate report released by the Commerce Department on Thursday.

The Commerce Department said real gross domestic product shot up by 3.4 percent in the third quarter after jumping by 2.2 percent in the second quarter. Economists had expected GDP to surge by 3.1 percent.

The stronger-than-expected GDP growth reflected increases in investment, consumer spending, and government spending that were partly offset by a decrease in exports.

The Labor Department also released a report on Thursday unexpectedly showing a slight dip in first-time claims for U.S. unemployment benefits in the week ended October 24th.

The report said initial jobless claims edged down to 194,000, a decrease of 1,000 from the previous week’s revised level of 195,000.

Economists had expected jobless claims to rise to rise to 199,000 from the 194,00 originally reported for the previous month.

The Labor Department said the less volatile four-week moving average also slipped to 196,750, a decrease of 1,250 from the previous week’s revised average of 198,000.

The Treasury Department is scheduled to announce the results of this month’s auction of $44 billion worth of seven-year notes at 1 pm ET.