Wall Street split in two at midday Thursday. Alphabet Inc. (NASDAQ:GOOGL) dragged the Nasdaq 100 lower after a costly quarter, while small caps and most other stocks moved higher.
Alphabet fell 11.8%, on track for its worst session on record. Third-quarter earnings came in at $2.12 per share, well below the $3.02 consensus, as capital spending more than doubled to $51.4 billion and free cash flow turned negative for a second straight quarter.
The slide erased about $470 billion of Alphabet’s market value by midday, even as Google Cloud revenue jumped 103% to $30.7 billion.
The economy gave investors a reason to look elsewhere.
Gross domestic product grew at a 3.4% annualized pace in the third quarter, above the 3.2% consensus and up from 2.2% in the second quarter. Meanwhile, the core personal consumption expenditures price index rose 3.1% from a year earlier in September, in line with estimates.
As a result, the Russell 2000 gained 1.2% while the Nasdaq 100 lost 1%. If those moves hold into the close, it would be the first session since July 2024 in which small caps rose more than 1% while the Nasdaq 100 fell more than 1%.
Breadth told the same story. In the Russell 1000, 764 stocks were higher and 256 lower, roughly three gainers for every loser.
Bonds Are Calm
The 10-year Treasury yield slipped 1 basis point to 4.99%, back below the 5% mark it held before the data. The 2-year yield fell 2 basis points to 4.67%, and the 30-year yield was flat at 5.33%.
On Wednesday, the Federal Reserve held rates at 3.75%-4.00%. Before Thursday’s data, traders priced an 83% probability of a 25-basis-point hike at the Dec. 9 meeting, according to the CME FedWatch tool.
Oil retreated. West Texas Intermediate crude fell 2.3% to $100.44 a barrel, and Brent lost 1.8% to $109.61. Gold futures eased 0.4% to $4,036 an ounce, while silver dropped 2.2% to $52.50. Bitcoin (CRYPTO: BTC) rose 0.5% to about $81,611.
The S&P 500 slipped 0.2% to 7,726, down 18 points.
The Dow Jones Industrial Average fell 0.2% to 52,363. Caterpillar Inc. (NYSE:CAT) weighed most, down 8.1% after third-quarter revenue missed forecasts. However, Merck & Co. Inc. (NYSE:MRK) rose 4.3% after lifting the midpoint of its 2026 guidance.
The Nasdaq 100 fell 1% to 29,502. Microsoft Corp. (NASDAQ:MSFT) slipped 1.6% despite earnings of $4.89 per share against a $4.72 consensus. In contrast, Meta Platforms Inc. (NASDAQ:META) gained 2.6% and Apple Inc. (NASDAQ:AAPL) rose 1.5%.
The Russell 2000 climbed 1.2% to 2,864.
Thursday’s Performance In Major US Indices
| Index | Last | % Change | MTD | YTD |
|---|---|---|---|---|
| S&P 500 | 7,726.00 | -0.23% | +0.97% | +12.86% |
| Dow Jones | 52,362.62 | -0.21% | +2.86% | +8.95% |
| Nasdaq 100 | 29,501.85 | -1.04% | -2.98% | +16.84% |
| Russell 2000 | 2,863.62 | +1.17% | +2.39% | +15.38% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) slipped 0.4%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) fell 0.5%.
- The Invesco QQQ Trust (NASDAQ:QQQ) dropped 1.3%.
- The iShares Russell 2000 ETF (NYSE:IWM) rallied 1.1%.
Drugmakers Lead as Software Sinks
Health care led the S&P 500’s sectors. The State Street Health Care Select Sector SPDR ETF (NYSE:XLV) rose 2%, lifted by strong drugmaker earnings. Eli Lilly and Co. (NYSE:LLY) gained 6.3% after raising its 2026 revenue outlook to $91 billion-$92 billion on third-quarter sales of $24.4 billion.
The iShares U.S. Pharmaceuticals ETF (NYSE:IHE) advanced 2.6%.
Communication services lagged. The State Street Communication Services Select Sector SPDR ETF (NYSE:XLC) fell 1.6%, as Alphabet is among its largest holdings.
Real estate, utilities and financials also rose between 1.4% and 1.8%, with Mastercard Inc. (NYSE:MA) up 4.3% after its quarterly report, while technology lost 1.1% and energy slipped 0.4%.
Software Takes a Hit
- ServiceNow Inc. (NYSE:NOW) plunged 25.6%, heading for its worst day on record. Earnings of $1.00 per share missed the $1.02 estimate, and the company guided fourth-quarter growth in current remaining performance obligations to 18.5% in constant currency.
- Fortinet Inc. (NASDAQ:FTNT) tumbled 21.5%. Earnings of $0.91 per share beat the $0.86 consensus, but service revenue grew only 13% to $1.31 billion.
- Sprouts Farmers Market Inc. (NASDAQ:SFM) sank 22% after projecting a 1.7% decline in full-year comparable store sales.
- Alnylam Pharmaceuticals Inc. (NASDAQ:ALNY) dropped 17.3% despite beating estimates, as U.S. demand growth for its amyloidosis drugs slowed to $81 million from $129 million in the second quarter.
- Service Corp. International (NYSE:SCI) lost 12.3% after lowering its full-year adjusted earnings outlook to $3.94-$4.04 per share.
On the Upside
- ADT Inc. (NYSE:ADT) soared 33.5% after agreeing to be taken private by Thrive Holdings for $10 per share in cash, a 45.6% premium to its Oct. 27 close.
- Crocs Inc. (NASDAQ:CROX) jumped 25.7% after raising its full-year revenue and adjusted earnings outlook, as both the Crocs and HeyDude brands grew in the third quarter.
- Insmed Inc. (NASDAQ:INSM) climbed 17.9% after third-quarter revenue of $524.4 million topped estimates and it raised 2026 sales guidance for Brinsupri to $1.35 billion-$1.4 billion.
- Textron Inc. (NYSE:TXT) rose 14.6% after adjusted earnings climbed to $1.76 per share from $1.55 a year earlier and it raised its full-year earnings and cash flow outlook.
Thursday’s Russell 1000 Top Gainers
| Name | % Change |
|---|---|
| ADT Inc. | +33.54% |
| Crocs Inc. | +25.66% |
| Insmed Inc. | +17.91% |
| Carvana Co. | +15.06% |
| Textron Inc. | +14.58% |
Thursday’s Russell 1000 Top Losers
| Name | % Change |
|---|---|
| ServiceNow Inc. | -25.59% |
| Sprouts Farmers Market Inc. | -21.95% |
| Fortinet Inc. | -21.49% |
| Alnylam Pharmaceuticals Inc. | -17.33% |
| Service Corp. International | -12.31% |
What’s Next
Amazon.com Inc. (NASDAQ:AMZN) lost 2.7% ahead of its report, which is due after today’s market closes. Analysts expecting earnings of $1.97 per share.
Gilead Sciences Inc. (NASDAQ:GILD) also reports, with a consensus of $2.19 per share.
Photo: Shutterstock
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