Wall Street Wrap: S&P 500, Nasdaq and Dow Daily — 2026-10-29
Alphabet’s disappointing Q3 earnings triggered a historic sell-off in tech stocks, dragging the S&P 500 and Nasdaq lower on Thursday, October 29, snapping a recent winning streak. This occurred just one day after the Federal Reserve held interest rates steady, causing a brief market rally that was quickly overshadowed by renewed AI spending concerns and a sharp drop in Caterpillar shares.
Wall Street Wrap: S&P 500, Nasdaq and Dow Daily — 2026-10-29
Top developments
Alphabet Earnings Spark Historic Tech Sell-Off
On Thursday, October 29, Alphabet’s Q3 earnings report disappointed investors, causing the stock to drop approximately 12% and reigniting fears about the profitability of AI investments. This "historic drop" dragged the broader market lower, with the S&P 500 falling 0.3%—its first decline in four days—and the Nasdaq leading indexes lower. The sell-off in Alphabet and other tech names overshadowed positive earnings from Microsoft, which guided to Azure growth of 45%, above analyst expectations.
Fed Holds Rates Steady in Split Vote
The Federal Reserve decided to keep interest rates unchanged on Wednesday, October 28, in a split vote, a move that initially lifted major indexes. Chair Kevin Warsh stated that politics played "no role" in the decision ahead of midterm elections. While the decision initially cooled inflation worries and led to gains, the subsequent Alphabet news reversed the momentum. The 10-year Treasury yield edged higher to 5.02% following the Fed's announcement, reflecting a steepening yield curve.
Caterpillar and Industrial Weakness Weigh on Dow
While tech led the downside, the Dow Jones Industrial Average also faced pressure from Caterpillar, which fell significantly, contributing to a loss of over 100 points for the index on Thursday. This industrial weakness contrasted with earlier in the week when the Dow had seen gains supported by Boeing and other non-tech sectors.
Local view
International financial media highlighted the divergence between US economic resilience and market volatility. Bloomberg Línea noted that while US economic growth and persistent inflation reinforced expectations for potential future rate hikes by the Fed, the immediate market reaction was driven by "new doubts about AI" following Alphabet's results. Similarly, Infobae reported that Wall Street closed higher on Wednesday following the Fed's decision, with the S&P 500 reaching 7,748.03 points, before the subsequent tech sell-off erased these gains.
Context & numbers
- S&P 500: Fell 0.3% on Thursday, Oct 29, ending a four-day winning streak.
- Treasury Yields: The 10-year Treasury yield rose to approximately 5.02% following the Fed's rate hold.
- Fund Flows: US equity funds saw net inflows of $5.07 billion in the week ending Oct 21, down from $13.37 billion the prior week, as investors began to unwind crowded AI trades.
- Hedge Fund Positioning: Net leverage among hedge funds fell to 47%, indicating a reduction in risk exposure ahead of key earnings.
On the radar
- Intel Earnings: Investors are watching Intel’s Q3 results, released after hours on Thursday, for clues on whether the recent 20% selloff in the stock has bottomed out. Management’s guidance on data center growth and profitability is critical.
- PCE Inflation Data: The latest PCE inflation report showed expected rises, while Q3 GDP estimates topped forecasts, keeping the Fed's "higher for longer" narrative in play.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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