Stock Market Today: Alphabet's Record Drop Pulls the Nasdaq Down 1.4%

Alphabet had its worst day since Google went public in 2004 on Thursday, dragging big technology stocks down even as most of the market rose. The Nasdaq Composite fell 1.38% to 26,184.72, and the S&P 500 slipped 0.30% to 7,720.39, ending a three-day winning streak. The Dow lost 0.25% to 52,342.56, while the Russell 2000 index of smaller companies rose 1.01%.

Alphabet revived worries about AI spending

Alphabet (GOOGL) plunged 12.6% to $283.82 after its search revenue missed estimates and its free cash flow came in at negative $9.07 billion, as it spent $51.36 billion on property and equipment in the quarter (full story). Yahoo Finance and NBC News put the market value it lost at $482–500 billion, the second-largest one-day loss for a US-listed company after Nvidia’s in January 2025.

Software was hit next. ServiceNow (NOW) plunged 27.0%, its worst day on record, Yahoo Finance said, after a soft forecast for future contracted revenue (full story), and Fortinet (FTNT) plunged 20.1% after cutting its service revenue forecast (full story).

Caterpillar (CAT), whose power equipment runs data centers, plunged 9.25% after it beat profit estimates but kept its 2026 sales forecast unchanged, its worst day since March 2020, Yahoo Finance said (full story). Yahoo Finance tied part of the drop to a wider sell-off in stocks linked to the AI build-out. Microsoft (MSFT), which reported alongside Alphabet on Wednesday, slipped 0.2% (full story).

Most stocks rose anyway

About four in five S&P 500 stocks rose, the AP reported. By our tally of its stocks, eight of the index’s 11 sectors gained, led by health care, and only communication services, technology, and consumer discretionary fell.

Eli Lilly (LLY) jumped 6.6% to a record close after beating revenue estimates by 8% and raising its sales forecast (full story). Carvana (CVNA) soared 15.7% on record car sales (full story). DoorDash (DASH) jumped 5.6% after it agreed to buy Instacart for $65 a share, about $17 billion, and reported quarterly results that beat forecasts, the AP reported.

The economy grew faster than expected

The economy grew at a 3.4% annual rate in the third quarter, up from 2.2% in the second, the Bureau of Economic Analysis said. That beat the 3.2% median forecast in a Wall Street Journal survey. Inflation stayed high: the PCE price index, which tracks what consumers pay, rose 3.6% in the year to September, and 3.1% excluding food and energy, in line with forecasts.

First-time claims for unemployment benefits fell by 1,000 to 194,000 last week, below the 199,000 economists expected, the Labor Department said. Treasury yields fell anyway: the 10-year yield dropped to 4.94% from 5.05% on Wednesday, the AP and Investing.com reported. A day earlier, the Fed had held its target range at 3.75% to 4.00%, its statement said.

In Europe, the European Central Bank held its deposit rate at 2.50%. President Christine Lagarde said she will step down on 7 February 2027, about nine months before her term ends, Euronews and Investing.com reported.

After the bell

As of 5:20 p.m. ET, Intel (INTC) had plunged 19.6% after hours on a fourth-quarter revenue forecast well below estimates (full story). Amazon (AMZN) had slid 6.5% after missing estimates for earnings per share and advertising, even as its cloud arm grew 39% (full story). Reddit (RDDT) had plunged 16.7% on a soft forecast and a warning about falling search referral traffic, and Stryker (SYK) 12.1% by 5:18 p.m. ET after missing estimates and cutting its growth outlook (after-hours movers).

The numbers