Alphabet's record plunge drags down the Nasdaq

The story

Alphabet fell about 12.6% on Thursday, Bloomberg reported. Its search and ad sales disappointed. That wiped out a record $500 billion or so in company value. It also revived a fear that AI is eating into Google's core business. The Nasdaq, which leans on big tech, fell about 1.4%.

Most of the market went the other way. The S&P 500 slipped only about 0.3%. Small companies rose, and health care jumped about 2.4%. Real estate, utilities, banks and grocery makers rose too. Investors seem to be moving money out of AI-linked tech and into steadier, cheaper spots.

Amazon fell ahead of its earnings report after the closing bell, CNBC reported, as worry grew over AI spending. The interest rate on 10-year government bonds dipped to just under 5%. That's probably people seeking safety as tech sold off, though no headline ties the two. Heating oil futures fell about 1.6%. That's a small break for Mainers heading into heating season. These are wholesale prices, not what you pay at delivery, and they're still high.

Also today

• Caterpillar plunged even after beating estimates, Bloomberg reported, a sign the AI jitters are spreading beyond big tech.
• Wheat rose after China asked about buying U.S. wheat for the first time since the Trump-Xi summit, Bloomberg reported.

Storylines

• Doubts about the AI trade: Alphabet's record drop and Caterpillar's slide added to the worry, while Microsoft is seeking about $25 billion in bonds to pay for AI spending.
• Rates near 5% and inflation worries: The 10-year rate dipped just under 5%, and Hassett said the Fed could raise rates if October inflation runs hot.
• Oil above $100 on Middle East conflict: U.S. oil held flat near $103 a barrel, and global oil sits near $111.
• Midterms Nov. 3: Polymarket halted its international exchange after a breach, days before election week.

Temperature

Neutral · lopsided: One giant stock fell hard, but most sectors and small caps rose, and the market's fear gauge eased.