Alphabet Shares Slide as AI Costs Weigh on Earnings

Shares in Google parent Alphabet Inc. fell about 10% in after-hours trading after the company’s quarterly revenues disappointed investors. Questions arose over whether Alphabet is generating enough sales to justify its huge investments in artificial intelligence. The decline contrasted with Microsoft, whose shares gained nearly 3% after logging better-than-expected earnings.

US Markets Mixed as Tech Earnings Diverge

The S&P 500 added 0.3% on Wednesday, while the Dow Jones Industrial Average gained 0.2% and the Nasdaq composite climbed 0.3%. The 10-year US Treasury yield eased below 5.00% after briefly jumping to around 5.04% earlier in the day. The two-year Treasury yield steadied to 4.68%, down from higher than 4.77%.

Oil prices fell more than 1%, with Brent crude down 1.2% to $110.32 per barrel early Thursday. Brent crude was roughly $72 a barrel before the Iran war began in late February. The US dollar fell to 157.72 Japanese yen from 157.84 yen, while the euro traded at $1.1146, down from $1.1154.

The Federal Reserve held interest rates steady at its policy meeting concluded Wednesday, though two officials were in favour of a hike. Analysts said a rate hike in December remains likely since inflation is still too high. Markets are watching the outcome of the European Central Bank meeting later today and expect the Bank of Japan to stand pat at its policymaking meeting concluding Friday.

In Asia, Japan’s Nikkei 225 edged up 0.2% to 64,073.17, with SoftBank Group shares falling 0.5%. Samsung Electronics sank 5.4% despite strong quarterly results, as shareholder return policy arrangements disappointed some investors. SK Hynix rose 1.6% after soaring 10.9% the day before on better-than-expected quarterly results. Taiwan’s Taiex declined 1.9%, while Hong Kong’s Hang Seng edged less than 0.1% higher to 23,101.86 and the Shanghai Composite index shed 0.9% to 3,647.12.