Alphabet's heavy cash burn sent its shares 10% lower after hours and pulled Nasdaq futures down 0.9%. Microsoft rose 3% on stronger cash flows, leaving Asian markets mixed ahead of Amazon and Intel results.
Alphabet's 10% after-hours drop erased nearly $400 billion of its market value. Shares in Asia moved erratically as AI-related earnings drew wildly mixed responses, which raises the stakes for Amazon and Intel results due later in the day.
Alphabet falls while Microsoft gains
The selloff in Alphabet pushed Nasdaq futures 0.9% lower. Microsoft moved the other way, as better-than-expected cash flows lifted its shares by 3%.
Jamie Hannah of VanEck said Alphabet's traditional ad revenue has been hit by the AI boom itself. He added that both Alphabet and Microsoft confirmed solid AI revenue through data centre and cloud services growth.
Asia splits on chip earnings
Samsung Electronics reported record earnings on booming memory chip demand but stayed silent on plans to boost returns, and its shares fell 4%. The KOSPI index dropped 1.2% after a nearly 7% surge a day earlier, while SK Hynix rose 4.6% after jumping 11%.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.7%. Japan's Nikkei was last up 1%, China's blue-chip index fell 0.8% and Hong Kong's Hang Seng index rose 0.5%.
Fed holds rates, markets still price a hike
The Federal Reserve held interest rates steady overnight, but two committee members voted for a hike. Markets are still 80% priced for a rate hike in December despite dovish comments from Chair Kevin Warsh.
J.P. Morgan Asset Management's Kerry Craig said the dissenting votes could be read as "not about whether the Fed hikes again, but when", according to Reuters.
Attention now turns to September US personal consumption expenditures data, the Fed's preferred gauge of inflation. Forecasts center on a 0.3% monthly rise in the core measure, up from 0.2% the previous month.
Source: Investing.com (Reuters)
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