Google drags down Wall Street stocks

Wall Street stocks experienced a decline on Thursday, October 29, as Alphabet, the parent company of Google, saw its shares drop by 12 percent following disappointing profits. The main stock indices in London flashed red, indicating a drop in investor confidence. After a mostly downbeat showing across Asia, European markets advanced, with the European Central Bank leaving interest rates unchanged.

The euro dipped after Christine Lagarde announced her resignation as ECB president, but later rose as she signaled a potential rate hike in December. Crude prices fell by more than one percent due to reports of renewed diplomatic efforts between the United States and Iran to avoid further strikes. Wall Street's main stock indices were lower during midday trading, with the tech-heavy Nasdaq Composite dropping 1.3 percent.

Alphabet's shares plunged 12 percent, and Google's parent company reported lower-than-expected profits while maintaining significant spending on artificial intelligence. The decline in tech stocks extended to other companies, such as Caterpillar, which faces higher financing costs due to increased borrowing rates driven by AI infrastructure spending.

South Korean chipmaker Samsung Electronics also disappointed investors with record quarterly profits but missing market expectations in its semiconductor division. Despite the underwhelming results, markets continued to advance in Europe, while Tokyo finished higher. Microsoft posted forecast-topping revenue and profit, fueled by its Azure cloud computing division, but its shares initially rose before falling.

Tech earnings will be a focus in the coming days, with Amazon and Intel reporting after the US close. The Federal Reserve's decision to hold interest rates has been widely expected, with the central bank citing the need for more data to combat inflation, which has remained stubbornly above its 2 percent target for five years. Personal consumption expenditures data showed that core prices rose by 3.1 percent year-on-year in September, reaching their highest levels since May.