Alphabet shares fall 10% as global markets split

Global markets diverged on Thursday after the U.S. Federal Reserve kept interest rates unchanged.

Alphabet shares dropped approximately 10% in after-hours trading on Wednesday. The Google parent reported quarterly revenues that fell short of investor expectations. This performance raised questions about whether the company can generate sufficient sales to offset its massive spending on artificial intelligence.

European indices gained ground in the early morning. Germany’s DAX rose 0.8% to 25,912.10, and France’s CAC 40 climbed 1% to 7,983.15. The UK FTSE 100 increased 0.5% to 10,744.60. In contrast, U.S. futures moved in opposite directions. The S&P 500 future fell 0.4%, while the Dow Jones Industrial Average future rose 0.4%.

Asian markets showed mixed results. Tokyo’s Nikkei 225 advanced 1.1% to 64,659.47, aided by a 1.8% gain in SoftBank Group shares. South Korea’s Kospi index declined 1.2% to 5,937.66. Samsung Electronics shares fell 4.1% despite strong quarterly results, as new shareholder return policies disappointed some investors. SK Hynix shares rose 2.6% after surging 10.9% the previous day on better-than-expected earnings.

Oil prices decreased as U.S. officials indicated that renewed military action against Iran could occur after the Nov. 3 midterm elections. Brent crude fell 0.8% to $110.77 per barrel, a level significantly higher than the roughly $72 per barrel price before the Iran war began in late February. U.S. benchmark crude dropped 1.1% to $101.67 per barrel.

The 10-year U.S. Treasury yield eased to around 5.00% after briefly reaching 5.04% on Wednesday. The two-year Treasury yield steadied at about 4.69%, down from above 4.77% the day before. The dollar gained slightly against the yen, reaching 157.86, while the euro rose marginally to $1.1155.

Investors are watching the European Central Bank meeting later Thursday. The Bank of Japan is expected to hold rates steady when it concludes its policymaking session on Friday. Microsoft shares gained nearly 3% in after-hours trading after posting better-than-expected earnings.