S&P 500 Falls 0.30% on Oct 29, 2026 as Alphabet Sinks 12.6%

Key takeaways

• The S&P 500 fell 23.59 points, or 0.30%, to 7,720.39 on Thursday, October 29, 2026, ending a three-day winning streak.
• The Nasdaq Composite lost 365.13 points, or 1.38%, to 26,184.72 after Alphabet shares sank 12.6% on a quarterly revenue miss, according to Reuters.
• Small caps went the other way: the Russell 2000 rose 28.71 points, or 1.01%, to 2,859.22.
• The US economy grew at a 3.4% annual rate in the third quarter, up from 2.2% in the second, while the PCE price index rose 3.6% from a year earlier in September, according to the Bureau of Economic Analysis.
• The 10-year Treasury par yield eased to 4.980% from 5.050%, and the 2-year fell to 4.610% from 4.670%, US Treasury data show.

Session recap

Wall Street closed mixed and mostly lower on October 29 as a steep drop in Alphabet revived worries about the payoff from heavy artificial-intelligence spending, while money rotated into health care and smaller companies. For the wider picture across regions, see Asian and global markets today; the previous session is covered in our US stocks brief for October 28, when the S&P 500 rose after the Federal Reserve held rates.

Percentage changes are calculated from the October 28 closes (S&P 500 7,743.98; Nasdaq 26,549.85; Dow 52,475.10; Russell 2000 2,830.51; VIX 16.91). Treasury par yields are the official end-of-day curve, based on bids at roughly 3:30 p.m. New York time.

Trading was busy but not extreme. Reuters reported that 17.05 billion shares changed hands on US exchanges, against a 17.09 billion average over the previous 20 sessions. Breadth was healthier than the headline indexes suggest: advancing issues outnumbered decliners by 1.95-to-1 on the NYSE, and the S&P 500 posted 19 new 52-week highs against 6 new lows, according to the same report.

What drove it

Alphabet's 12.6% slide

Alphabet fell 12.6% after its third-quarter sales fell short of expectations, Reuters reported. The Associated Press said the stock was heading for its worst day since it began trading more than 20 years ago, and noted that purchases of property and equipment topped $51 billion while free cash flow turned negative. Yahoo Finance reported that the slide put roughly $500 billion of market value at risk. Because Alphabet is one of the largest weights in both the S&P 500 and the Nasdaq, its fall alone explains much of the gap between the two indexes. Earlier this month we set out the big-tech earnings dates and the AI spending question that dominated this week.

Software and chip selling

The selling spread to software. ServiceNow and Fortinet each dropped more than 20% after their results, and Marvell Technology lost 13.2%, according to Reuters, which said semiconductor stocks fell 1.4% to snap a four-day winning streak. Caterpillar fell 9.3% after its outlook disappointed, Reuters reported.

Rotation into health care and small caps

Eli Lilly rose 6.6% and Merck gained 3.8%, while Ford jumped 12.4%, Reuters reported. Yahoo Finance tied Lilly's gain to strong third-quarter sales of its GLP-1 weight-loss drugs and a raised forecast. Ross Mayfield, investment strategy analyst at Baird, told Reuters: "There's plenty of other places to go with your money outside of the AI trade." The Russell 2000's 1.01% gain on a day the Nasdaq fell points to that rotation.

Growth, inflation and the Fed

The Bureau of Economic Analysis said real GDP grew at a 3.4% annual rate in the third quarter, faster than the 2.2% pace of the second. Yahoo Finance reported that economists had expected 3.1%. Inflation was firmer: the BEA said the PCE price index rose 3.6% from a year earlier in September, and Yahoo Finance reported core PCE, which excludes food and energy, at 3.1%. The data came a day after the Federal Reserve held rates with two officials voting for a hike, so firmer inflation keeps the debate over further tightening alive. Despite that, Treasury yields fell, a backdrop that tends to favor rate-sensitive small caps.

Earnings season backdrop

With 253 S&P 500 companies reported, 81% have beaten analyst estimates and aggregate third-quarter earnings growth is expected at 31.0% year on year, Reuters said, citing LSEG data. After the bell, Amazon fell 6.5% in extended trading, according to Reuters, and Yahoo Finance reported that Intel guided fourth-quarter revenue to $15 billion to $16 billion, below the roughly $17 billion analysts expected. Those moves will feed into Friday's open. Our guide on how to read an earnings report explains how guidance moves stocks.

Oil and bonds

Brent crude fell 0.9% to $110.67 a barrel in afternoon trading, the AP reported, while Yahoo Finance said traders were weighing diplomacy involving Iran. The AP noted the 10-year yield had topped 5.30% earlier this month, its highest since 2002; Thursday's official close of 4.980% leaves it well below that peak. Our explainer on how the 10-year Treasury yield works covers why that matters for stock valuations.

Political & policy watch

• Federal Reserve: The Fed held rates on October 28 with two dissenters who favored a hike, Yahoo Finance reported, and described price pressures as "elevated," according to Reuters. Thursday's PCE reading is the kind of data those officials cited.
• US midterm elections: Voters go to the polls on Tuesday, November 3. Yahoo Finance said Democrats were favored to win the House; control of Congress affects the outlook for fiscal policy, tariffs and spending bills.
• European Central Bank: The ECB held rates, and President Christine Lagarde said she will resign in February, nine months before her term ends, the AP reported. Leadership changes at major central banks can move the euro and global bond yields.

What to watch next

US clocks move back one hour on November 1, so the 8:30 a.m. Eastern releases fall at 13:30 UTC from that date.

Risk checklist for readers

• Concentration risk: a handful of mega-cap stocks carry large weights in the S&P 500 and Nasdaq, so one company's results can swing the whole index, as Alphabet did on October 29.
• After-hours prices: extended-hours trading has thinner volume, and moves such as Amazon's can change sharply by the next regular session.
• Inflation versus growth: strong GDP with rising PCE inflation can push rate expectations up; watch how bond yields react to the November 6 jobs report and November 10 CPI.
• Event risk: the November 3 midterms can move sectors tied to fiscal spending, health policy and trade.
• Global spillover: US yields and the dollar influence currencies and foreign flows in Asia, including Southeast Asian markets, so US sessions often set the tone for the next Asian open.
• Check primary data: GDP and PCE figures are first estimates that the BEA revises later; confirm numbers on bea.gov, bls.gov and treasury.gov.

This article is for information only and is not investment advice.