US stocks opened lower on Thursday, October 29, 2026, as investors reacted to Alphabet's latest results and fresh inflation data, a day after the Federal Reserve left interest rates unchanged.
At the open, the Dow Jones Industrial Average fell 389 points, or 0.74%, to 52,086.13. The S&P 500 declined 0.57% to 7,699.61, while the Nasdaq Composite dropped 1.31% to 26,201.82, with technology shares leading the retreat.
The main trigger was Alphabet, the parent company of Google. Its shares plunged as much as 13% after the company missed third-quarter earnings expectations, with slower growth in its core search advertising business and mounting artificial intelligence spending raising concerns among investors. Reports put the cash burn highlighted by the market at around $9 billion, reigniting a debate over whether heavy AI investment is paying off quickly enough.
Microsoft offered a contrast. The software giant beat expectations on almost every line in its own results, and its shares jumped about 5% in after-hours trading, showing that investors are now sorting AI winners from heavy spenders rather than rewarding the whole sector together.
The economic backdrop added to the cautious mood. A Commerce Department report showed the Personal Consumption Expenditures price index rose 0.5% in September, in line with economists' estimates, and stood at 3.6% on an annual basis. The core reading, which strips out food and energy, rose 0.3% on the month and 3.1% on the year, also in line with expectations.
Separate data showed the US economy grew 3.4% in the third quarter, ahead of the 3.2% estimate, while weekly jobless claims came in at 194,000, below the 199,000 forecast. The Federal Reserve had held its benchmark rate steady at 3.75% to 4% at its October meeting, citing inflation still above its 2% target, and markets are now pricing in a high chance of a December rate hike.
Wednesday's session had ended higher, with the Dow closing at 52,475.10, the S&P 500 at 7,743.98 and the Nasdaq at 26,549.85, after the Fed decision. Thursday's pullback shows how quickly sentiment can turn when a major earnings report disappoints.
This article is for information only and is not financial advice.
Sources: The Economic Times, Zacks, Reuters
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