Alphabet reported its third‑quarter adjusted earnings per share and revenue below market expectations, and posted a negative free‑cash‑flow of $9.07 billion, while keeping its full‑year capital‑expenditure forecast at $195 billion to $205 billion.
The Nasdaq composite fell 1.2%, the S&P 500 slipped 0.3% and the Dow edged down 0.1%, all dragged down by the tech sell‑off that followed Alphabet’s miss.
Caterpillar shares also slid roughly 10%, even though the industrial equipment maker reported better‑than‑expected revenue and earnings; its construction‑industries sales, however, fell slightly below estimates.
In contrast, Eli Lilly rallied about 8% after posting third‑quarter revenue of $24.4 billion and raising its full‑year forecast to $91–$92 billion from $85–$87 billion, buoyed by strong sales of Zepbound and Mounjaro.
Economic data added another layer of complexity: the U.S. economy grew 3.4% in the third quarter versus a consensus 3.1% estimate, while the personal consumption expenditures price index rose 0.5% in September, pushing annual inflation to 3.6%.
With AI‑spending scrutiny tightening and the Federal Reserve likely to keep rates steady until the end of 2026, market participants are bracing for a cautious earnings season and potential capex restraints among tech firms.