Markets
Nasdaq Falls 1.4% as Alphabet Posts Worst Day Since 2004 While Small Caps Climb
Image: 6493990 via Pixabay
A record loss of market value at the Google parent pulled tech lower, while smaller companies rallied and Amazon and Intel slid after the bell.
By Noris Ortiz ·
Technology shares dragged Wall Street lower on Thursday as a historic selloff in Alphabet revived doubts about the payoff from heavy spending on artificial intelligence, even as smaller companies and much of the rest of the market moved higher.
At the 4 p.m. ET close, the Nasdaq Composite fell 365.13 points, or 1.38%, to 26,184.73. The S&P 500 slipped 23.59 points, or 0.30%, to 7,720.39, and the Dow Jones Industrial Average lost 132.54 points, or 0.25%, to 52,342.56 [1]. The small-cap Russell 2000 went the other way, rising about 1% to 2,859.22 [1]. The S&P 500's decline put it on track for its first loss in four sessions, according to an Associated Press report during the day [2].
Alphabet was the center of the session. The Google parent's shares sank nearly 13%, their steepest one-day drop since the company went public in 2004, after third-quarter revenue fell short of expectations and investors focused on weaker free cash flow and the returns on its AI investment [1]. NBC News reported that the slide erased about $500 billion in market value, the second-largest one-day wipeout for a single U.S. company after Nvidia's $589 billion loss in January 2025 [3]. Search advertising growth was a particular concern; JPMorgan analysts described the size of the slowdown as "steeper than expected," according to NBC News [3]. Microsoft, which also reported on Wednesday, held up better and ended little changed [1].
The weakness spread to other parts of technology. Software stocks tumbled, led by a 25% drop in ServiceNow, and Caterpillar fell as much as 12% before trimming its losses [1]. Elsewhere, Carvana jumped about 15% after reporting strong growth and Crocs rose 25% to its highest level in more than two years [1]. Midday AP data showed gains in Norwegian Cruise Line Holdings, Eli Lilly, Merck, Mastercard and DoorDash, which agreed on Thursday to buy Instacart [2][1].
The economic backdrop was mixed for investors. The government's first estimate showed the U.S. economy grew at a 3.4% annualized pace in the third quarter, ahead of the 3.1% economists expected, while the personal consumption expenditures price index rose 3.6% from a year earlier in September, up from 3.4% in August [1]. Bonds rallied anyway. The 10-year Treasury yield was near 4.99% late in the session, down about 6 basis points [1], as a drop in oil prices helped pull yields lower, according to the AP [2]. U.S. crude for December delivery traded near $102.91 a barrel late in the day [1].
In crypto, bitcoin was down about 1.8% at roughly $79,785 late in the afternoon in New York [1].
After the bell, the focus shifted to two more large technology companies. Amazon shares fell as much as 10% in extended trading before paring losses, as the company kept its 2026 capital spending plan at $220 billion and reported a trailing 12-month free cash outflow of $42.4 billion [1]. Intel slid about 17% after hours after forecasting fourth-quarter revenue of $15 billion to $16 billion, below the roughly $17 billion analysts expected [1]. Rivian rose after reporting third-quarter revenue of $2.155 billion and raising its full-year outlook [1].
Looking to Friday, traders will be watching whether the after-hours losses in Amazon and Intel carry into the regular session, and whether the rotation from the largest technology names into smaller companies that showed up on Thursday continues as a heavy week of corporate earnings draws to a close.
Sources:
[1] Yahoo Finance, "Stock market today: Dow, S&P 500, Nasdaq slip as Alphabet stock sinks 12% and AI jitters return", October 29, 2026. https://finance.yahoo.com/markets/live/stock-market-today-thursday-october-29-dow-sp-500-nasdaq-alphabet-microsoft-earnings-130305714.html
[2] Associated Press, "A potentially historic drop for Alphabet's stock drags the US market lower", October 29, 2026. https://lancasteronline.com/business/stock_market/a-potentially-historic-drop-for-alphabets-stock-drags-the-us-market-lower/article_ba035af5-4128-5bf7-93e7-040866082d61.html
[3] NBC News, "Alphabet shares record their worst day ever, shedding $500 billion in value", October 29, 2026. https://finance.yahoo.com/markets/stocks/articles/google-parent-alphabet-stock-price-150651158.html
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.