Global Markets: Alphabet's AI Spend Fuels Wall Street Sell-off

Global equity markets moved in opposite directions on Thursday as investors digested mixed signals from central banks and corporate earnings. The U.S. Federal Reserve held interest rates steady, but the focus shifted to the performance of major technology firms.

Alphabet Inc., the parent company of Google, saw its stock drop approximately 10% in after-hours trading on Wednesday. The California-based tech giant reported quarterly revenues that fell short of analyst projections. This result has intensified scrutiny over whether Alphabet can generate sufficient sales to offset its massive capital outlays for artificial intelligence infrastructure.

In contrast, Microsoft shares climbed nearly 3% in after-hours trading. The company logged earnings that exceeded market expectations, providing a counterpoint to the disappointment in Alphabet's report.

European indices opened higher on Thursday. Germany's DAX index rose 0.8% to 25,912.10, while France's CAC 40 increased 1% to 7,983.15. The UK's FTSE 100 added 0.5% to reach 10,744.60. Investors are awaiting a decision from the European Central Bank later in the day, which could further influence regional sentiment.

Asian markets showed a sharp divergence. Japan's Nikkei 225 climbed 1.1% to 64,659.47, aided by a 1.8% gain in SoftBank Group shares. SoftBank is a major investor in OpenAI. Conversely, South Korea's Kospi index fell 1.2% to 5,937.66. Samsung Electronics shares dropped 4.1% despite strong quarterly results, as investors reacted negatively to the company's latest shareholder return policy. SK Hynix, a memory chipmaker, rose 2.6% after surging 10.9% the previous day on better-than-expected earnings.

In the United States, futures for the S&P 500 were 0.4% lower, while Dow Jones Industrial Average futures gained 0.4%. On Wednesday, the S&P 500 closed up 0.3%, the Dow rose 0.2%, and the Nasdaq composite climbed 0.3%.

Oil prices declined as U.S. officials warned that renewed military action against Iran could occur after the November 3 midterm elections. Brent crude oil fell 0.8% to $110.77 per barrel. This price remains significantly above the roughly $72 per barrel level seen before the Iran conflict began in late February. Benchmark U.S. crude dropped 1.1% to $101.67 per barrel. In the bond market, the yield on the 10-year U.S. Treasury eased to approximately 5.00%, while the two-year yield steadied at about 4.69%.