29th October 2026 – (Hong Kong) US equities fell on Thursday as a sharp drop in Alphabet after its third‑quarter update reignited worries about the near‑term pay‑off from heavy AI investment, dragging the tech‑heavy Nasdaq more than 1 per cent lower. The Dow and S&P 500 also edged into the red, with sentiment turning after an early run‑up this week.
The market’s tone soured despite mixed megacap earnings. Microsoft topped forecasts on revenue and profit, but Alphabet’s sales disappointed, and questions over free cash flow and the return on AI spending overshadowed triple‑digit growth in its cloud unit. The selling spilled across AI‑linked names as chipmakers and software groups retreated, with the iShares Semiconductor ETF and the IGV software gauge sliding; Fortinet plunged by more than 20 per cent and ServiceNow also fell double digits following results.
Investors were still digesting the Federal Reserve’s decision on Wednesday to keep interest rates unchanged, a move that included two dissenters favouring a hike amid sticky inflation. A fresh print of the Fed’s preferred inflation measure showed the Personal Consumption Expenditures index rising 3.6 per cent year on year in September, keeping policy and price pressures firmly in focus.
Earnings remained a key catalyst after the bell, with Amazon due to report and several individual movers in play across the session. Eli Lilly climbed around 4 per cent on strong GLP‑1 demand, Caterpillar slumped as much as 12 per cent after an outlook that underwhelmed Wall Street, and Sprouts sank 20 per cent as a price‑cut strategy was flagged to weigh on margins into next year.
In Europe, European Central Bank President Christine Lagarde said she will step down on 7th February 2027, months earlier than expected, a decision that lands as the bloc wrestles with persistent inflation, higher bond yields and fiscal strains, including unrest in France over deficits and proposed austerity. Elsewhere, Carvana jumped about 15 per cent after a record quarter, with third‑quarter revenue up 42.4 per cent to 8.04 billion US dollars and retail vehicle sales rising 39 per cent to 217,385 units, while the company refinanced 1.7 billion US dollars of senior secured notes in a move it said should cut annual interest expense by roughly 45 million US dollars.
