Stock Rotation Hits AI Winners on Alphabet’s Miss: Markets Wrap
(Bloomberg) — A selloff in several tech companies spurred a rotation into a broader category of stocks while fueling a push toward the safety of bonds.
A record 13% plunge in Google’s parent Alphabet Inc. revived doubts over whether billions of dollars in artificial-intelligence spending will deliver sufficient returns. Those worries sent the Nasdaq 100 down about 1.5%. Microsoft Corp. drew blowout demand for its $25 billion debt offering. Amazon.com Inc. and Intel Corp. will report their results after the closing bell.
“We are now getting to see who is spending rationally on AI and who is not,” said Richard Reyle at Questar Capital Partners.
Not every technology firm fell, but a basket of AI winners sank 3%. In a sign of rotation to other sectors, almost 400 companies in the S&P 500 rose. Tech losses revived the haven appeal of bonds, which also gained as oil prices eased.
Just a day after the Federal Reserve left rates steady, data showed the US economy expanded in the third quarter at the fastest pace in a year. Meanwhile, the personal consumption expenditures price index — the Fed’s preferred inflation measure — rose 0.5% in September, the most in six months.
“It was another strong round of economic data that shows ongoing inflationary pressures and growth split between the AI buildout and consumption,” said Ian Lyngen at BMO Capital Markets.
AI is still the major theme for activity, but economic resilience is still a broad-based story, according to Eli Nir and Oscar Munoz at TD Securities.
“Couple that with the AI-led inflationary pressures, and it’s clear why the Fed both upgraded its growth assessment and remained acutely focused on their inflation mandate,” they added.
White House National Economic Council Director Kevin Hassett hinted that he expected the Fed would raise rates if inflation figures for this month are elevated.
“If October comes out really high, then I think the Fed would probably appropriately act,” he told Bloomberg Television.
Elsewhere, the European Central Bank President Christine Lagarde played down the danger that inflation will spread beyond energy after news that she’ll step down early overshadowed a decision to leave rates untouched.
Corporate Highlights:
Nvidia Corp. Chief Executive Officer Jensen Huang said the chipmaker’s dealings with Megaspeed International were “normal and not unusual” following a New York Times report that one of the Singapore firm’s executives is under investigation for spying on behalf of China. ServiceNow Inc. gave an outlook for quarterly subscription sales that met estimates, but failed to quell anxieties that AI will disrupt the software maker. Marvell Technology Inc. is in advanced talks to buy data center optics maker Lumentum Holdings Inc., according to people familiar with the matter. DoorDash Inc. agreed to buy rival Instacart in a deal that values the company at about $17 billion. Caterpillar Inc. posted sales that only modestly beat expectations, adding to investor jitters about challenges to the AI infrastructure boom. Mastercard Inc.’s earnings beat estimates as it benefited from increased spending from US consumers. Eli Lilly & Co. raised its sales forecast as demand for the firm’s obesity and diabetes drugs continues to surge. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.6% as of 3:15 p.m. New York time The Nasdaq 100 fell 1.7% The Dow Jones Industrial Average fell 0.5% The MSCI World Index fell 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1162 The British pound rose 0.3% to $1.3363 The Japanese yen was little changed at 157.95 per dollar Cryptocurrencies
Bitcoin fell 0.7% to $80,709.56 Ether fell 1.4% to $2,325.51 Bonds
The yield on 10-year Treasuries declined four basis points to 4.98% Germany’s 10-year yield declined two basis points to 3.36% Britain’s 10-year yield declined three basis points to 5.29% Commodities
West Texas Intermediate crude fell 0.5% to $102.30 a barrel Spot gold fell 1.4% to $4,010.79 an ounce –With assistance from Robert Brand.
©2026 Bloomberg L.P.
See more Swissinfo articles in your Google results. Learn more
