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  • Google Crashed 12.6%. Most Stocks Rose

Google Crashed 12.6%. Most Stocks Rose

The Nasdaq sank 1.4%, but small stocks jumped 1%. Then Amazon fell after the bell.

Market Minute
Market Minute

Oct 30, 2026

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Google Crashes 12.6%. Nasdaq Sinks. Small Stocks Win

Wall Street had a strange day on Thursday. Google crashed. The Nasdaq sank. Yet most stocks rose. Google parent Alphabet lost 12.64%, its worst day in more than 20 years. The Nasdaq fell 1.38%, while the S&P 500 lost 0.30%.

But the Russell 2000, which tracks small stocks, gained 1.01%. Most S&P 500 stocks rose, even as the index fell. The split grew after the bell. Amazon reported strong sales, but its stock fell about 6.5% in early after-hours trading.

At the same time, U.S. growth beat forecasts, while inflation rose to 3.6%. The message was clear. Investors still want stocks, but they are growing less willing to pay high prices for Big Tech.

What Moved

Thursday, October 29

  • The S&P 500 fell 0.30% to 7,720.39.

  • The Nasdaq dropped 1.38% to 26,184.72.

  • The Dow lost 132.54 points, or 0.25%, to 52,342.56.

  • The Russell 2000 gained 1.01% to 2,859.22.

  • Alphabet plunged 12.64%.

  • Amazon fell 4.25% before its earnings report.

  • Eli Lilly gained 6.63%.

  • Mastercard rose 4.16%.

  • U.S. GDP grew at a 3.4% annual rate last quarter.

  • Inflation rose to 3.6%, up from 3.4%.

  • Core inflation held at 3.1%.

  • The 10-year Treasury yield fell to 4.99%.

  • Brent crude dropped 3.25% to $111.57.

  • The S&P 500 was up 12.8% for the year.

  • The Nasdaq was up 12.7% for the year.

Why It Moved

Three events shaped Thursday's market. Google's sharp fall pulled the Nasdaq and S&P 500 lower. Investors feared that the firm's huge AI costs were growing faster than the cash those projects could bring in.

Fresh data showed that the U.S. economy grew faster than expected. But inflation also rose, giving the Fed more reason to keep rates high. Meanwhile, buyers moved into other stocks. Small firms, banks, and health care shares gained.

The result was a market with 2 very different stories. Big Tech took a hit, but much of the rest of Wall Street held firm.

Google: A 12.6% Crash Sends a Warning

Alphabet lost 12.64% on Thursday after its earnings fell short of Wall Street's high hopes. Sales rose 25% to $127.6 billion. Its cloud business more than doubled in size. Yet investors focused on weaker profits than expected and the huge cost of AI.

Google is spending billions on chips, data centers, and power. Investors now want proof that those costs will lead to more cash and higher profits. The fall was so large that Alphabet alone cut nearly 50 points from the S&P 500.

That helps explain why the index fell even as most stocks rose. Other tech shares also lost ground. Amazon fell 4.25%, Micron dropped nearly 5%, and Nvidia slipped 0.80%. Strong sales are no longer enough to lift every AI stock. Firms must now meet high forecasts and show that their spending is paying off.

Amazon: Record Profits, but Shares Still Fall

Amazon added to Big Tech's troubles after Thursday's close. Sales rose 12% to $201.9 billion. Its cloud business grew 39.3%, the fastest pace in nearly 5 years.

The firm also posted record operating income of $28.1 billion. Yet its shares fell about 6.5% after hours. The main concern was cash.

Amazon spent so much on new projects that its free cash flow fell to negative $42.4 billion over the past 12 months. A year earlier, it was positive $14.8 billion. Much of that cash went toward AI and data centers.

This does not mean Amazon is losing money. It means the firm is spending more on new projects than it has left after paying its other costs. Amazon is still growing fast. But investors want to know when that heavy spending will start bringing in more cash. Google and Amazon both delivered strong sales. Both saw their stocks fall. That is a clear sign that Wall Street has raised its demands.

U.S. Economy: Growth Beats Forecasts. Prices Rise

Thursday's economic reports showed a strong economy with a growing price problem. U.S. GDP rose at a 3.4% annual rate in the third quarter. That was above forecasts near 3% and up from 2.2% in the prior quarter.

Consumer spending and business investment helped drive the gains. But inflation rose to 3.6% in September, up from 3.4% in August. Core inflation, which leaves out food and energy, stayed at 3.1%. Both remain above the Fed's 2% goal.

That creates a problem for stocks. Strong growth helps firms earn more, but high inflation may force the Fed to keep rates high. The Fed held rates at 3.75%–4.00% on Wednesday. The new data gives officials more reason to wait before making any cuts. Higher rates can raise costs for firms that need loans. They can also hurt home sales and leave families with less money to spend. The economy is still growing. But high prices remain a risk.

Small Stocks: The Market's Biggest Surprise

Thursday's most important move may have come from small stocks. The Russell 2000 gained 1.01% while the Nasdaq lost 1.38%. That was a gap of 2.39 percentage points in just 1 day. Through Thursday, the Russell was up 3.0% for the week. The Nasdaq had gained just 0.9%.

The split shows that investors have not given up on stocks. They are buying firms outside the biggest tech names. Health care stocks rose. Banks gained. Eli Lilly jumped 6.63%, while Mastercard climbed 4.16%.

Most S&P 500 stocks ended higher despite the index's loss. That matters because the largest tech firms make up a big share of the S&P 500. When they fall, they can pull the index down even as hundreds of other stocks rise. If buyers keep moving into smaller firms, the market may become less tied to Big Tech. But if tech losses spread, those gains may not be enough to keep stocks rising.

Oil: Prices Fall, but Costs Stay High

Oil gave markets some relief on Thursday. Brent crude fell 3.25% to $111.57 a barrel. The drop came after fresh supply fears had pushed prices higher earlier in the week.

Lower oil prices can help ease costs for airlines, truckers, and factories. They can also help slow price growth if the drop lasts. But crude remains expensive. High fuel and shipping costs can still reach shoppers. That makes the Fed's fight against inflation harder. A lasting drop in oil would help firms and families. Another rise could add fresh pressure to stocks and bonds.

The Hidden Cost of Fast AI Answers

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Why It Matters Now

Thursday showed a major split in the stock market. Google fell 12.64%. Amazon dropped after earnings. Yet most stocks gained, and small firms had a strong day. That tells investors something important. The AI boom has not ended. But Wall Street is now looking much harder at what firms spend and what they earn.

Google and Amazon posted strong sales. Still, both saw their shares fall as investors questioned the cost of AI. At the same time, buyers found strength in other parts of the market. The economy also remains firm. GDP grew 3.4% last quarter. But inflation at 3.6% may keep rates high for longer.

That leaves Wall Street with 2 tests. Big Tech must show that AI spending can lead to more cash. The rest of the market must prove it can keep rising if tech stocks fall. Friday's wage data could add to rate fears if pay costs rise faster than expected. The lesson is simple: Investors still want growth, but they are no longer willing to pay any price for it.

Google crashed. Amazon fell. Small stocks rose. The market is still finding buyers. But those buyers are becoming far more careful about where they put their money.

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