US stocks closed lower on Thursday, October 29, 2026, with the Nasdaq Composite down 1.37% at 26,184.72. Doubts about returns on AI spending outweighed a stronger-than-expected GDP print, while Treasury yields fell and the Federal Reserve left the door open to a December rate hike.
🔑 Key takeaways
- The Nasdaq Composite lost 1.37%, Alphabet fell about 10% after hours and Intel more than 17%.
- Third-quarter US GDP beat expectations, driven by consumer spending and AI-related business investment.
- The 10-year Treasury yield dropped 10.6 basis points to 4.939%.
- Markets still priced an 80% chance of a Fed hike in December.
- Brent settled at $114.88 a barrel and spot gold at $4,019.71 an ounce.
Strong GDP Fails to Calm Markets
US third-quarter GDP grew faster than expected. Resilient household spending and AI-driven business investment more than offset higher oil prices linked to the Middle East conflict. Inflation data released the same day broadly matched forecasts, with no major surprise.
The Fed held rates steady on Wednesday, but two committee members voted for a hike. Chair Kevin Warsh sounded more confident about inflation, which supported bonds during Asian trading. Ahead of the release, consensus expected the core PCE (Personal Consumption Expenditures) price index to rise 0.3% month on month in September, after 0.2% in August. Even so, markets still priced an 80% chance of a December hike.
The Bank of Canada raised rates on Wednesday for the first time in more than three years and warned it could tighten further.
« The dissenting votes in favor of a rate hike at today’s meeting could be read not as a question of whether the Fed will hike again, but when. With tightening already priced in, yields are likely to stay within a range unless a clearer signal of more aggressive tightening or a pivot toward cuts emerges. »
Kerry Craig, global market strategist at J.P. Morgan Asset Management
Earnings Split Tech: Winners and Losers
Asian shares rose early before giving up those gains as AI-linked earnings triggered sharply divergent reactions. Alphabet fell about 10% after Wednesday’s close on results below expectations, and heavy AI-related cash burn wiped out nearly $400 billion of market value. Nasdaq futures slid 1%.
| Stock | Move | Driver cited |
|---|---|---|
| Alphabet | about -10% | Results below expectations, heavy AI-related cash burn |
| Microsoft | +3% | Results and cash flow above forecasts |
| Samsung Electronics | more than -4% | Operating profit nearly nine times higher, a third-quarter record |
| SK Hynix | +1.3% | Followed an 11% jump on strong results |
| Intel | more than -17% | Weak results, guidance below expectations |
| Amazon | more than -5% | Heavy cash burn, holiday-quarter revenue guidance well below estimates |
| ServiceNow and Fortinet | more than -20% each | Financial updates |
Microsoft, by contrast, beat forecasts on stronger-than-expected cash flow. Samsung Electronics reported an operating profit nearly nine times higher, lifted by demand for AI chips, yet its shares lost more than 4% and the KOSPI fell 2.6% after a rebound of almost 7% the day before. The MSCI Asia Pacific ex-Japan index lost 0.7%, the Nikkei gained 0.3% and the Hang Seng rose 0.2%.
« The reason Alphabet is down is that its traditional advertising revenue business has been hit by precisely what is fueling the AI boom. So it produces a mixed picture for Google. »
Jamie Hannah, deputy chief investment officer at VanEck
At the close, the Dow Jones lost 132.54 points (-0.25%) to 52,342.56, the S&P 500 fell 0.30% to 7,720.39 and the MSCI World index slipped 0.12% to 1,132.62. An earlier reading at 1:12 p.m. ET showed deeper losses, including a 1.41% drop in the Nasdaq. The gaps reflect different timestamps, not conflicting data.
Intel fell more than 17% after weak results and guidance below expectations, dragging other chipmakers lower. Amazon lost more than 5% in late trading after flagging heavy third-quarter cash burn and holiday-quarter revenue forecasts far below Wall Street estimates.
« Even though markets are down today and reacting negatively to results like Alphabet’s, ServiceNow’s and others, we also got a GDP number that suggests the fundamentals of the economy remain strong. »
Anthony Saglimbene, chief market strategist at Ameriprise
Bonds Rally, and Europe Holds Rates at 2.5%
Treasury yields fell as investors digested solid growth and in-line inflation. One basis point (bp) equals one hundredth of a percentage point.
| Maturity | Close | Change | Reading at 1:12 p.m. ET |
|---|---|---|---|
| 2-year | 4.602% | -13.3 bp | 4.668% |
| 10-year | 4.939% | -10.6 bp | 4.999% |
| 30-year | 5.3007% | -6.03 bp | 5.3383% |
« Most of it came from growth in spending on AI. »
Peter Cardillo, chief market economist at Spartan Capital Securities, on the GDP report
During Asian trading, the 2-year yield had first dropped 6 bp overnight before stabilizing near 4.6933%, as Warsh’s comments steepened the yield curve.
In Europe, the STOXX 600 closed up 0.77%. The ECB kept its key rate at 2.5% and suspended its run of hikes. ECB President Christine Lagarde confirmed, after months of speculation, that she will step down in February.
Dollar, Oil and Gold: Modest Moves
| Asset | Close | Change | Earlier reading |
|---|---|---|---|
| Dollar index | 101.88 | -0.23% | 101.96 (-0.16%) |
| EUR/USD | 1.118 | +0.25% | 1.1168 (+0.14%) |
| USD/JPY | 157.69 | -0.07% | 157.87 (+0.03%) |
| US crude | $102.00 | -0.76% | $101.83 (-0.92%) |
| Brent | $114.88 | -0.38% | $115.08 (-0.21%) |
| Spot gold | $4,019.71 | -1.16% | $4,024.01 (-1.06%) |
| Spot silver | $52.10 | -3.48% | $52.44 (-2.85%) |
Oil fell as prospects for peace talks eased fears of further supply disruption from the escalating Middle East conflict. According to the Wall Street Journal, US Vice President JD Vance sent a letter to Mohsen Rezaei, head of Iran’s Supreme National Security Council, to revive negotiations. Qatari mediators presented Iran with a new draft agreement, while a senior Iranian official rejected what was presented to him as unacceptable.
Gold declined after inflation data strengthened expectations of a Fed hike later in the year, reducing the appeal of a non-yielding metal. The dollar weakened after the latest data, and the euro gained ground. Readings describing a stable euro and an unchanged dollar refer to an earlier snapshot, not the close.
Outlook: Resilient Economy, Lingering Rate Risk
The session captured a split: a resilient US economy on one side, technology stocks under pressure on the other. The central question is now whether massive AI investment will generate enough returns to justify the cash burn seen at Alphabet, Amazon and Intel.
Three scenarios stand out. If the Fed confirms a restrictive path and hikes in December, long-dated yields could stay elevated and weigh on growth stocks and gold. If data remains in line with expectations, yields should trade within a range. A clear pivot toward rate cuts, or a breakthrough in Middle East negotiations, would instead reshape the outlook for oil, gold and bonds.
Sources
- Reuters, Global Markets, October 29, 2026
- AOL, Asian shares fall on Alphabet earnings
- TradingView (Reuters), Equities and bond yields dip with AI jitters
- Investing.com, Asian shares fall as Alphabet earnings miss
- Euronext Live, Equities and bond yields dip with AI jitters
Cet article est publié à titre informatif et éducatif. Il ne constitue en aucun cas un conseil en investissement. Faites vos propres recherches (DYOR) avant toute décision.
