Stock futures fell on Thursday after Alphabet's Q3 earnings sparked a sell-off and fresh AI jitters rippled through Wall Street. Alphabet's stock sank more than 12%, and the move hit the most rate-sensitive corners of the market first.
Pras Subramanian of Yahoo Finance tracked the drop as the Dow Jones Industrial Average fell almost 0.3%, the S&P 500 lost roughly 0.3%, and the Nasdaq Composite slid about 1.4%. That split showed how quickly one earnings report can hit the tech-heavy index harder than the broader market.
Alphabet and Microsoft split
Microsoft beat analyst expectations on the top and bottom lines, but Alphabet's sales came up short in its Q3 report. Alphabet's cloud growth was up 103%, yet the stock still sold off as investors focused on the gap between growth and the returns implied by AI spending.
The iShares Semiconductor Index ETF skidded, and software stocks tracked by IGV also tumbled after the report. Fortinet and ServiceNow both posted double-digit losses, extending the move beyond one company and into the software and chip complex.
Fed pause and price pressure
The Federal Reserve held rates unchanged on Wednesday afternoon, and two Federal Reserve dissenters favored a rate hike amid sticky inflation. The Personal Consumption Expenditures index rose 3.6% year over year in September, leaving the market with less room to ignore weak guidance from tech companies whose valuations depend on future growth.
Amazon was scheduled to report results after the bell on Thursday, and Intel added another jolt after its own release. Intel reported better-than-anticipated third-quarter earnings, then said Q4 revenue would be $15 billion to $16 billion, short of the $17 billion analysts expected, before the stock fell more than 20% and trimmed losses.
Amazon, Intel, and the next move
Intel said the shortfall came from a worse-than-anticipated drop in PC revenue, while Amazon stock tanked 10% in post-market hours before trimming losses after it maintained its 2026 capex at $220 billion for its AI infrastructure buildout. Amazon's free cash flow also decreased, a reminder that heavy AI spending is still colliding with market demands for clearer payback.
Rivian jumped in after-hours trading after upbeat Q3 results and a guidance increase, with revenue of $2.155 billion versus a consensus of $2.02 billion, an adjusted loss per share of $0.48 versus $0.61 expected, and an adjusted EBITDA loss of $435 million versus $575.9 million expected. The immediate market question is how much of Thursday's broader futures move came from Amazon and Intel after the Alphabet-led sell-off had already reset the tone for AI-linked stocks.
