Alphabet stock drops 10% after Q3 revenue miss

Alphabet Inc. shares fell approximately 10% in after-hours trading on Wednesday after the Google parent company reported quarterly revenues that missed investor expectations. The decline raised immediate questions about whether the California-based firm can generate sufficient sales to offset its substantial capital expenditures on artificial intelligence.

The earnings report contributed to a volatile start to the week for global markets. In Asian trading on Thursday, the Nikkei 225 in Japan rose 1.1% to 64,659.47. SoftBank Group shares, a known investor in OpenAI, climbed 1.8% during the session. Conversely, the Kospi index in South Korea dropped 1.2% to 5,937.66. Samsung Electronics shares fell 4.1% despite strong quarterly results, as its new shareholder return policy disappointed some investors. SK Hynix shares rose 2.6% following a 10.9% gain the previous day.

Taiwan’s Taiex index declined 1.4%, while Hong Kong’s Hang Seng index edged down 0.2% to 23,038.70. The Shanghai Composite lost 0.8% to 3,651.43. In Australia, the S&P/ASX 200 gained 0.5% to 8,891.80. These moves followed a Wednesday session in the United States where the S&P 500 added 0.3%, the Dow Jones Industrial Average gained 0.2%, and the Nasdaq composite rose 0.3%.

The market action came after the U.S. Federal Reserve held interest rates steady. Investors are now waiting for the European Central Bank to conclude its meeting later Thursday. The Bank of Japan is expected to maintain its current policy stance when it finishes its policymaking meeting on Friday.

Commodity prices remained sensitive to geopolitical tensions. U.S. officials warned that renewed military action against Iran could occur after the November 3 midterm elections. Brent crude oil fell 0.6% to $110.94 per barrel, a level significantly higher than the roughly $72 per barrel price seen before the Iran conflict began in late February. U.S. benchmark crude dropped 0.8% to $101.96 per barrel.

In the bond market, the yield on the 10-year U.S. Treasury eased to around 5.00% after briefly jumping to 5.04% on Wednesday. The two-year Treasury yield steadied at approximately 4.69%, down from above 4.77% the previous day. Currency markets showed minor shifts, with the U.S. dollar rising slightly to 157.85 Japanese yen from 157.84 yen. The euro weakened to $1.1139 from $1.1154.

Microsoft shares offered a counterpoint to the Alphabet decline, gaining nearly 3% in after-hours trading after posting better-than-expected earnings results.