5 major single-day stock drops of 2026, from Alphabet to IBM

Alphabet's stock suffered its worst day in over two decades on Thursday, contributing to a drop in the U.S. market. The tech giant, behind Google and YouTube, reported weaker summer growth than analysts anticipated, raising concerns about the return on its substantial AI investments. The S&P 500 fell 0.3%, marking its first loss in four days, while the Nasdaq composite declined by 1.4% and the Dow Jones Industrial Average slipped 132 points, or 0.3%.

Alphabet's Class A shares plummeted 12.6%, their worst performance since trading began more than two decades ago. The company burned through more cash during the quarter, with free cash flow in the red due to property and equipment purchases exceeding $51 billion. The AI industry faced additional pressure, as concerns grew about potential profit and productivity gains from the AI revolution, and rising costs of borrowing to acquire more chips.

Despite the negative impact, four out of every five stocks within the S&P 500 increased, and the index would have been higher had it not been for Alphabet's decline. Several companies, including KLA Corp., Eli Lilly, Mastercard, and Merck, reported stronger summer profits surpassing analysts' expectations. DoorDash also exceeded forecasts after agreeing to buy Instacart for $17 billion.

Norwegian Cruise Line Holdings jumped 13.4% after exceeding expectations for summer profits and revenue. The S&P 500 closed at 7,720.39, down 23.59 points, while the Dow Jones Industrial Average fell to 52,342.56, and the Nasdaq composite dropped to 26,184.72. Treasury yields softened amid mixed U.S. economic reports, but concerns about consumer income growth and inflation persist.

U.S. workers submitted fewer unemployment benefit applications, possibly indicating limited layoffs. The 10-year Treasury yield fell to 4.94% from 5.05% as oil prices dipped. Overseas, European indexes rose after the European Central Bank maintained interest rates, while Asian markets were mixed, with South Korea's Kospi falling due to a decline in Samsung Electronics despite a profit increase.