The key facts

  • Alphabet shares fell about 10% in after-hours trading after weak quarterly revenue
  • Microsoft shares rose almost 3% thanks to better-than-expected earnings
  • The Fed kept the rate unchanged; two members voted for a hike, and analysts see a December increase as possible

Alphabet's weak report shook a market buoyed by AI hype

Another round of earnings from US tech giants prompted a correction in markets that had been rising on high investor expectations, fueled by the global frenzy around artificial intelligence. Shares of Alphabet, Google's parent company, fell about 10% in after-hours trading: quarterly revenue disappointed investors and raised questions about whether the company can generate enough sales to justify its massive AI investments. Microsoft shares, by contrast, gained almost 3% thanks to better-than-expected earnings — reports euronews.

What else moved the markets

On Wednesday, US indices closed with modest gains: the S&P 500 rose 0.3%, the Dow Jones 0.2%, and the Nasdaq Composite 0.3%. The yield on 10-year US Treasury bonds fell below 5.00% after briefly spiking to about 5.04% the day before, while two-year yields stabilized at 4.68%. Brent crude fell 1.2% to $110.32 per barrel — still well above the roughly $72 level at which it traded before the war with Iran began in late February. Oil prices dropped more than 1% despite warnings from US officials about a possible resumption of military operations against Iran after the midterm elections on November 3.

The Fed's decision and Asian trading

As expected, the Federal Reserve, at the conclusion of its meeting on Wednesday, kept the rate unchanged. Two Fed officials voted for a hike, and analysts believe a rate increase in December is likely, as inflation remains too high. Markets are also awaiting the outcome of the European Central Bank's meeting, while the Bank of Japan is expected to keep its current policy at its meeting on Friday.

Asian markets reacted in different directions

In Asia, indices moved in different directions. Japan's Nikkei 225 rose 0.2% to 64,073.17, while shares of SoftBank Group, an investor in OpenAI, lost 0.5%. South Korea's Kospi fell 2.2% to 5,880.25: Samsung Electronics dropped 5.4% despite strong quarterly results — investors were disappointed by the new parameters of its capital return policy for shareholders — while SK Hynix gained 1.6% after surging 10.9% the previous day on better-than-expected earnings. Taiwan's Taiex fell 1.9%, Hong Kong's Hang Seng gained less than 0.1% to 23,101.86, the Shanghai Composite lost 0.9%, and Australia's S&P/ASX 200 rose 0.5%.