What Happened Yesterday
Thursday, October 29, 2026
The 30-second version: Google's parent had its worst day ever because AI is eating its cash. Most other stocks actually rose, so your 401(k) barely moved. Overnight, Amazon and Intel made the same fear worse, and today's open looks ugly for tech.
Market | Thursday close | Move | Mood |
|---|---|---|---|
S&P 500 | 7,720.39 | -0.30% | Heard a noise |
Nasdaq Composite | 26,184.72 | -1.38% | Went to check |
Dow Jones | 52,342.56 | -0.25% | Stayed in the car |
Chip index (SOX) | 11,518.20 | -1.42% | Nervous |
VIX (fear gauge) | 17.20 | +1.71% | Oddly calm |
Small caps (IWM, fund) | $284.01 | +0.97% | Having a great time |
Gold (GLD, fund) | $368.57 | -1.32% | Dropped the flashlight |
U.S. oil (USO, fund) | $168.19 | +0.97% | Restless |
10-year Treasury rate | 4.98% | down from 5.05% | Hiding spot |
Bitcoin | $77,775 | -4.30% | Ran into the woods |
The fund rows (IWM, GLD, USO) are there for the move, not the price. USO tracks U.S. crude, not Brent. The SOX is a basket of 30 big chip stocks. 10-year rate from the Treasury's daily curve. Bitcoin is a 24-hour close.
The $1,000 test: $1,000 in an S&P 500 fund lost about $3 on Thursday. $1,000 in Alphabet lost about $126. $1,000 in Eli Lilly made about $66. $1,000 in Intel is down about $250 more before today's open.
Alphabet had its worst day in its life
and the rest of the market kept dancing
Alphabet fell 12.64% to $283.82. That's its worst day since going public in 2004, topping the 11.6% drop of March 2020 (EODHD price history). It erased about $500 billion in stock market value (CNBC, NBC News), the second-biggest one-day loss for any U.S. company, behind Nvidia's in January 2025.
The killer was free cash flow, the money left after paying for buildings and equipment. Alphabet came in at negative $9.1 billion, far worse than the roughly negative $2.7 billion analysts expected (CNBC). AI data centers are expensive, and the customers are still catching up.
Now the plot twist. The average stock went up. A fund that holds all 500 S&P companies in equal amounts rose 1.20% while the regular S&P fell 0.30%. Small companies rose too. One giant dragged the headline number down all by itself.
Microsoft, up about 3% before Thursday's open, closed down 0.16%. The same day it sold $25 billion of debt (Reuters), which is one way to pay for a data center.
In a horror movie, the monster only comes for the people who went into the basement. This week, the basement is wherever the AI bills are kept. Everyone upstairs is still eating snacks, which is exactly what they do right before the sequel.
Inflation stayed highand bonds rallied anyway
The Commerce Department said prices rose 3.6% from a year ago in September, up from 3.4% in August. Core prices, which skip food and energy, rose 3.1%, up from 3.0%. Both matched what economists polled by LSEG expected (Fox Business). The Fed's 2% goal remains a character who died in the first act.
The economy grew at a 3.4% annual pace in the July-to-September quarter, above the 3.2% expected (LSEG, via Fox Business). Strong growth plus high inflation usually pushes interest rates up.
Thursday, the 10-year Treasury rate, which drives mortgage rates, fell instead to 4.98% from 5.05% (Treasury). Investors running from AI stocks piled into government bonds, the financial version of locking yourself in the bathroom. Odds of a December rate hike slipped to about 73% on Kalshi and Polymarket, sites where people bet real money on events (about 7:45 AM CT today). CME FedWatch, which reads futures markets, was near 76%. Thursday's edition had the betting sites at 77% to 78% and CME above 80%.
The Fed's problem didn't go away because Google had a bad day. Lower rates on Thursday came from fear, not good news. Nobody should send the Fed a thank-you card for that.
Amazon had already fallen 4.25% to $243.79 Thursday, before it even reported. Sales rose 12% to $201.9 billion, and profit was $1.89 a share, while Wall Street expected about $202.3 billion and $1.96 a share (LSEG via CNBC). AWS, the cloud business that rents computing power to other companies, grew 39.3%, its fastest in nearly five years (Amazon's release).
The bad news: over the past 12 months, free cash flow was negative $42.4 billion, from positive $14.8 billion a year earlier. CEO Andy Jassy said Amazon will spend about $220 billion on buildings and equipment this year and "meaningfully more in 2027" (earnings call). The stock was down about 7% before today's open (Reuters).
Intel fell 3.62% to $92.07 Thursday, then actually did fine on the quarter: sales up 21% to $16.5 billion, adjusted profit of $0.52 a share. Then came the forecast. Next quarter's sales: $15 billion to $16 billion. Adjusted profit: $0.25. Intel's finance chief said the PC slowdown runs at least through the first half of next year (Intel's release), and Reuters says Intel warned it will burn cash this year. The stock was down about 25% before today's open (Reuters).
The villain is always the same: it costs more than anyone said. Amazon says the payoff is real, and its cloud numbers back that up. But the bill is here now, and the payoff is a promise. Horror movies have a name for the character who says, "It's fine, I'll be right back."
Quick hits from the rest of the cast
Binance got robbed. The world's biggest crypto exchange says hackers took $6.3 billion, the largest crypto theft on record, and it paused withdrawals (as of this morning). About half has been frozen. TRM Labs and Chainalysis point to North Korea. Binance says it will cover losses. We can't yet say whether it caused bitcoin's Thursday drop.
Oil is climbing again. Brent, the global price, settled near $115 Thursday (Yahoo Finance) and reached about $117 overnight on the contract expiring today (Investing.com). Iran's Guards claim four tankers hit mines near Hormuz. U.S. Central Command calls that false. President Trump was briefed on military options on Thursday (WSJ, Axios). Briefing is not ordered.
Eli Lilly jumped 6.63% to $1,373.70 Thursday. Sales rose 39% to $24.4 billion, and it raised its 2026 sales forecast to $91 billion to $92 billion (Lilly). Nobody is asking the weight-loss drug company about its data centers.
Reddit fell about 21% to 22% before the open after its CEO warned daily visitors could drop by a low double-digit percentage (Reuters).
South Korea's Kospi, its main stock index, closed down 3.48% Friday at 5,730.74.
What to Watch Today
Before the open: at about 3 AM CT, Nasdaq 100 futures, which are bets on where that index opens, were down 2.16%. S&P 500 futures were down 1%, and Dow futures barely moved (Reuters). NVIDIA was down 2.5%, AMD 7%, and Broadcom about 4%.
Time (CT) | What | Why you care |
|---|---|---|
Before the open | Earnings: ExxonMobil, Chevron, AbbVie, AstraZeneca | Oil companies report with oil near $115. Watch whether they call it a windfall with a straight face. |
7:30 AM | Employment Cost Index, third quarter (Labor Department) | What companies pay workers? Last quarter: +0.9%. Hotter makes the Fed's December call easier. |
8:45 AM | Chicago business survey for October | Last month: 58.8. Above 50 means growth. Watch for a big drop. |
11:30 AM | St. Louis Fed President Alberto Musalem speaks | He has no vote on rates this year (they take turns), so listen for tone, not a decision. |
Monday | Apple earnings | CEO John Ternus's first earnings call. Apple rose 1.48% Thursday. |
The one thing that could ruin everyone's day: the rest of the market noticing. Thursday worked because most stocks ignored Alphabet. If that stops today, a tech scare becomes a market scare. Add a weekend with Iran in the headlines, and a lot of people may want less stock by the closing bell.
Bottom line: AI may still be the future. This week, Wall Street just asked who's paying for it, and Big Tech said, "Check back in 2027." Happy Halloween. The scariest costume this year is a spreadsheet.
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Disclaimer: This is not financial advice. We are a newsletter with opinions and a spreadsheet. Do your own homework, and please don't let a horror sequel pick your retirement plan.