US open: Alphabet slump and firm inflation data pull major indices into the red

(Sharecast News) - Major indices were in the red early on Thursday as investors worked through another volatile round of hyperscaler earnings and digested the Federal Reserve's decision to keep its benchmark overnight interest rate unchanged.

As of 1445 GMT, the Dow Jones Industrial Average was down 0.28% at 52,326.50, while the S&P 500 shed 0.37% to 7,715.42 and the Nasdaq Composite came out of the gate 1.36% weaker at 26,188.94.

The Dow opened 148.60 points lower on Thursday, more than erasing gains recorded in the previous session.

Alphabet shares slumped in early action after missing thirdquarter expectations on both earnings and revenue and reporting $9.07bn of negative free cash flow, while keeping fullyear capex guidance unchanged at $195bn to $205bn.

Microsoft, on the other hand, traded higher after posting strongerthanexpected firstquarter results, driven by 48% growth in its Azure cloud infrastructure business. However, neocloud names weakened as Microsoft's lowerthanforecast capex figure suggested data centre partners were taking longer to deliver new capacity.

In terms of Thursday's earnings news, Eli Lilly delivered another strong quarter, with third quarter earnings and revenues comfortably topping forecasts as demand for its GLP1 drugs Zepbound and Mounjaro remained exceptionally strong. Adjusted earnings per share came in at $7.48 against $6.26 expected, while revenues jumped to $24.40bn, well ahead of the $22.61bn consensus. Eli Lilly also lifted its FY26 sales outlook from $85bn-$87bn to $91bn-$92b.

Caterpillar reported betterthanexpected thirdquarter income, buoyed by strong demand for construction equipment tied to the buildout of AI infrastructure, although its shares slid more than 10% in premarket trade as investors reassessed the sustainability of debtfuelled datacentre spending, while Mastercard posted a solid set of numbers, with thirdquarter net revenues rising 14% to $9.8bn, operating income up 16% to $5.9bn, and diluted EPS jumping 22% to $5.28. Bristol Myers Squibb also nudged guidance higher after stronger thirdquarter revenue, though net income held broadly flat yearonyear at $2.2bn, or $1.05 per share.

Still to come, Amazon, Intel, Sandisk and Starbucks were slated to report earnings after the close.

On the macro front, US inflation accelerated in September, keeping price growth well above the Federal Reserve's 2% target, according to the Commerce Department, while the economy expanded faster than expected in the third quarter. The personal consumption expenditures price index rose 0.5% on the month, matching consensus forecasts, while the annual rate of 3.6% was just below expectations. Core PCE, the Fed's preferred gauge of underlying trends, increased 0.3% on the month and 3.1% yearonyear, both in line with estimates. On a quarterly basis, headline PCE eased to 2.1%, with core at 2.5%, down from 5% and 3.3%, respectively, in Q2.

Despite inflation remaining elevated, the economy showed surprising strength, with gross domestic produc growing at a 3.4% annualised clip in the third quarter, ahead of the 3.1% forecast and up from 2.2% in Q2. Growth was driven by a 12.7% surge in business investment linked to the artificial intelligence buildout, while consumer spending rose 3.8%, matching the prior quarter and marking the strongest pace since late 2024.

Elsewhere, Americans lined up for unemployment benefits at a decelerated pace in the week ended 17 October, according to the Labor Department. Initial claims fell by 1,000 to 194,000, after the prior week was upwardly revised by 1,000, while the fourweek moving average decreased by 1,250 to 196,750 from the prior week's upward revision. Continuing claims decreased by 21,000, with the number of Americans receiving unemployment benefits falling to to 1.701m in the week ended 17 October, while the previous reading was downwardly revised by 6,000 from 1.728m.

Still to come, the Kansas Fed's October manufacturing activity data will be published at 1500 GMT.

The broader market was also still coming to terms with Wednesday's Federal Reserve decision, with policymakers holding rates at 3.75% to 4% following September's quarterpoint hike. The move was widely anticipated, but the Fed noted that inflation "remains elevated" and signalled it would wait for "the accumulation of more information" before considering further action.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Intel Corp. (INTC) $92.83 2.11%

Amgen Inc. (AMGN) $464.01 1.78%

American Express Co. (AXP) $325.53 1.61%

Goldman Sachs Group Inc. (GS) $934.00 1.47%

International Business Machines Corporation (CDI) (IBM) $252.39 1.19%

JP Morgan Chase & Co. (JPM) $345.24 1.05%

Dow Chemical Co. (DOW) $33.61 1.04%

Johnson & Johnson (JNJ) $275.07 0.86%

3M Co. (MMM) $175.61 0.71%

Coca-Cola Co. (KO) $92.49 0.60%

Dow Jones - Fallers

Verizon Communications Inc. (VZ) $44.08 -1.71%

Nike Inc. (NKE) $38.03 -1.09%

Walt Disney Co. (DIS) $110.49 -1.08%

Unitedhealth Group Inc. (UNH) $409.02 -0.80%

Travelers Company Inc. (TRV) $398.95 -0.76%

Merck & Co. Inc. (MRK) $147.54 -0.63%

Boeing Co. (BA) $171.23 -0.62%

Procter & Gamble Co. (PG) $158.87 -0.61%

Cisco Systems Inc. (CSCO) $109.44 -0.58%

Visa Inc. (V) $411.14 -0.31%

S&P 500 - Risers

Oracle Corp. (ORCL) $140.07 10.73%

Laboratory Corporation of America Holdings (LH) $360.42 8.78%

Applied Materials Inc. (AMAT) $418.18 6.66%

Micron Technology Inc. (MU) $951.75 6.49%

Lam Research Corp. (LRCX) $256.99 6.21%

KLA-Tencor Corp. (KLAC) $170.28 5.63%

Illumina Inc. (ILMN) $286.73 5.47%

Helmerich & Payne Inc. (HP) $41.74 5.31%

Western Digital Corp. (WDC) $397.67 4.89%

Quanta Services Inc. (PWR) $647.41 4.85%

S&P 500 - Fallers

F5 Inc. (FFIV) $366.93 -20.76%

CH Robinson Worldwide Inc (CHRW) $126.01 -9.33%

Coterra Energy Inc. (CTRA) $32.56 -8.62%

National Oilwell Varco Inc. (NOV) $19.24 -6.23%

Boston Scientific Corp. (BSX) $41.97 -5.84%

Fortinet Inc. (FTNT) $138.09 -5.27%

FMC Corp. (FMC) $4.63 -5.10%

Xylem Inc (XYL) $89.31 -4.99%

Cintas Corp. (CTAS) $217.03 -4.63%

Essex Prty Trust Inc. (ESS) $260.90 -4.62%

Nasdaq 100 - Risers

Applied Materials Inc. (AMAT) $418.18 6.66%

Micron Technology Inc. (MU) $951.75 6.49%

Lam Research Corp. (LRCX) $256.99 6.21%

KLA-Tencor Corp. (KLAC) $170.28 5.63%

Illumina Inc. (ILMN) $286.73 5.47%

Western Digital Corp. (WDC) $397.67 4.89%

Seagate Technology Plc (STX) $707.00 4.03%

Cadence Design Systems Inc. (CDNS) $342.92 3.87%

DENTSPLY Sirona Inc. (XRAY) $9.50 3.51%

Skyworks Solutions Inc. (SWKS) $86.16 3.39%

Nasdaq 100 - Fallers

Qvc Group Inc Series A (QVCGA) $0.34 -13.49%

Cintas Corp. (CTAS) $217.03 -4.63%

Paychex Inc. (PAYX) $108.21 -4.32%

Automatic Data Processing Inc. (ADP) $284.50 -3.70%

Take-Two Interactive Software Inc. (TTWO) $195.41 -3.65%

Wynn Resorts Ltd. (WYNN) $74.17 -3.37%

Netflix Inc. (NFLX) $61.95 -2.82%

Booking Holdings Inc. (BKNG) $151.20 -2.62%

Mercadolibre Inc. (MELI) $1,653.06 -2.62%

Check Point Software Technologies Ltd. (CHKP) $150.26 -2.36%