US Stock Market Live Updates: Nasdaq futures slide as Alphabet earnings revive AI spending fears
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US Stock Market Live: US stocks open lower on Thursday as Alphabet's results revive concerns over rising AI spending. Investors assess fresh inflation data after the Federal Reserve keeps interest rates unchanged. The Dow Jones falls 0.74%, the S&P 500 drops 0.57% and the Nasdaq declines 1.31%.
US stocks open lower on Thursday as investors weigh rising artificial intelligence spending against returns following Alphabet's quarterly results. Fresh inflation data also draws attention after the Federal Reserve keeps interest rates unchanged.
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Shares of Google parent Alphabet plunged as much as 13% on Thursday after the technology giant missed Wall Street's third-quarter earnings expectations, with slowing growth in its core search advertising business and mounting artificial intelligence spending raising concerns among investors.
Read more: Google stock plunges 13%
Oil prices eased as traders weighed fresh diplomatic contact between the US and Iran aimed at averting further military escalation in the Middle East. Brent December futures traded near $114 a barrel, while the January contract hovered around $110, following reports of communication between US Vice President JD Vance and Iranian security official Mohsen Rezaee. The potential for diplomatic engagement prompted some profit-taking, trimming the geopolitical risk premium after Brent rallied over 10% this month to its highest levels since April.
Despite the brief pullback, underlying supply risks continue to support the broader energy market. Escalating attacks on Russian refineries alongside the Middle East conflict have severely constrained diesel flows, though European futures eased slightly after China issued additional fuel-export quotas and European nations committed to releasing 42 million barrels from oil reserves. Meanwhile, market participants remain cautious ahead of upcoming US midterm elections, as reports suggest potential renewed military action against Tehran could follow the vote.
Gold prices declined up to 1.3% toward $4,015 an ounce after the Federal Reserve held interest rates steady while offering little guidance on future moves, leaving open the possibility of a rate hike before year-end. Markets have largely priced in a potential December hike amid persistent inflation driven by high energy costs, creating headwinds for the non-yielding metal. Adding to market uncertainty, Fed Chair Kevin Warsh signaled a proposal to reduce the annual number of rate-setting meetings from eight to six.
The metal remains vulnerable following a 3% decline in October, partly driven by broader equity liquidations where investors sold gold to cover stock market losses linked to rising AI expenditure concerns. Technical analysts note that bullion is caught in a tug-of-war between short-term momentum sellers and long-term accumulators around key support near $3,970, with thinner year-end liquidity potentially amplifying future price swings. Spot gold last traded down 1% at $4,026.11 an ounce, while silver, platinum, and palladium also recorded losses.
Fortinet’s product revenue growth slowed to 37% ($765 million), down from 52% last quarter, raising concerns over firewall upgrade demand. The company lowered its full-year service revenue guidance. Following the results, BofA Securities and Jefferies reduced price targets or adjusted ratings amid valuation concerns.
US stocks opened lower on Thursday as Alphabet's results rekindled worries about soaring AI costs, while investors assessed fresh inflation data following the Federal Reserve's decision to keep interest rates unchanged.
Read more: US stocks trade lower
Google parent Alphabet stock falls 12.8% at open on Thursday after reporting disappointing quarterly results.
Mastercard reported a net profit of $4.6 billion, or $5.28 per share, for the third quarter, up from $3.9 billion, or $4.34 per share, in the same period last year. Gross dollar volume across its payment platform grew 7% to $3 trillion, driven by sustained consumer spending on travel, dining, and everyday goods despite broader economic uncertainties and higher gasoline prices.
The results cap a strong quarterly performance across major payment networks following strong earnings from Visa and American Express. Continued spending among higher-income households and a resilient labor market helped offset tighter budgets among lower- and middle-income consumers, allowing Mastercard to maintain strong transaction volume growth across its global network.
Microsoft is planning its first US investment-grade bond sale in over nine years, aiming to raise at least $25 billion to fund its artificial intelligence initiatives. The debt offering is structured in up to 10 tranches with maturities ranging from two to 40 years, with final offering sizes subject to market demand. Managed by Wells Fargo, JPMorgan Chase, and UBS Group AG, the sale positions Microsoft among several major tech companies tapping debt markets to support heavy AI investments.
Initial claims for US state unemployment benefits dropped by 1,000 to a seasonally adjusted 194,000 for the week ending October 24, beating market forecasts of 199,000. Layoffs remain near historic lows as resilient domestic demand and strong corporate profits support steady retention. However, ongoing geopolitical tensions stemming from the Middle East conflict have made employers hesitant to significantly expand payrolls, keeping the market in a low-hire, low-fire state.
Continuing unemployment claims also fell by 21,000 to 1.701 million for the week ending October 17. Economists suggest the unemployment rate could hold steady or decline from September's 4.2% reading, further constrained by a shrinking labor pool amid immigration crackdowns. Following the data, Federal Reserve Chairman Kevin Warsh described labor conditions as quite positive, supporting expectations for a potential interest rate hike in December as inflation remains elevated.
Microsoft Corporation has announced a ten-part debt offering consisting of both floating and fixed rate notes due across various years. According to a filing with the US Securities and Exchange Commission, the total size of the offering has not yet been disclosed.
US gross domestic product grew at an annualized rate of 3.4% in the third quarter, outperforming expectations despite ongoing Middle East tensions and elevated oil prices. Strong consumer spending, supported by steady hiring and low layoffs, matched the previous quarter's 3.8% pace. Heavy corporate spending on artificial intelligence infrastructure also provided a substantial boost to business investment, pushing economic expansion well past the central bank's non-inflationary target rate.
Despite the strong numbers, underlying risks remain. Persistent gasoline prices above $4 a gallon are forcing households to dip into savings, while wage growth continues to lag behind inflation. Wall Street analysts also warn that massive corporate borrowing to fund long-term AI projects may not deliver immediate returns, creating potential drag on future equipment spending. The unexpected growth creates a sharp contrast with low consumer sentiment and presents a complex backdrop for upcoming central bank interest rate decisions.
Alphabet shares fell 11.33% to $285.42 in premarket trading after closing at $321.89, as the company's quarterly results revived concerns over rising AI spending and returns.
Investors also assessed company-specific developments ahead of further earnings reports. Intel and Amazon were scheduled to release results after Thursday's market close, adding to a busy week for major technology companies. Outside the technology sector, Caterpillar shares fell 9.7% following its third-quarter results, while Eli Lilly gained 3.9% after forecasting annual revenue above Wall Street estimates. Carvana rose 7.5% after exceeding third-quarter revenue estimates, and Chipotle Mexican Grill advanced 7% on better-than-expected quarterly comparable sales. These moves reflected a mixed market as investors weighed corporate earnings against concerns over AI spending and interest rates.
The US Federal Reserve kept interest rates unchanged on Wednesday, as expected, while awaiting further inflation data. Investors turned their attention to September's Personal Consumption Expenditures price index, the central bank's preferred inflation gauge, and the third-quarter GDP reading due later on Thursday. According to the CME FedWatch Tool, traders saw more than an 81% chance of a rate hike in December. LSEG data also showed money market participants pricing in another rate increase by mid-2027, amid elevated inflation measures and an oil shock linked to the Middle East conflict.
Software stocks declined after disappointing quarterly results from cybersecurity company Fortinet and software maker ServiceNow. Fortinet shares tumbled 26.2%, while ServiceNow dropped 19.6% after missing third-quarter profit estimates. Zscaler and Salesforce also traded lower amid broader weakness across the sector. Semiconductor stocks faced selling pressure, with Nvidia down around 0.5%, AMD falling 2.5% and Intel losing 3.5%. Marvell Technology declined 12.4% following reports of advanced talks to acquire data-centre optics maker Lumentum Holdings, whose shares rose 4.8%.
Microsoft shares rose 2.1% after the company reported stronger-than-expected cash flow and forecast robust cloud growth. Its performance offered investors some reassurance that heavy investments in artificial intelligence could translate into business growth and financial returns. However, concerns over the scale of capital expenditure across major technology companies continued to weigh on sentiment. Investors increasingly assessed whether projected AI revenue could justify rising spending and borrowing costs, tempering enthusiasm for the AI trade despite Microsoft's relatively strong results.
US stock futures fell on Thursday as Alphabet's quarterly results revived concerns over rising artificial intelligence spending and its returns. Nasdaq 100 futures declined 0.93%, while S&P 500 futures lost 0.2% and Dow futures fell 0.09%. Alphabet shares slid 10.4% in premarket trading after disappointing search advertising results and a sharp increase in cash burn linked to AI investments. If the losses held, the Google parent stood to lose more than $400 billion in market value.