CBN News, October 30, 2026, 07:16:07 - Listen to the news
Author: Chu Chu Editor-in-Chief: Ge Weier
*The three major stock indices ended a three-day rally, with the Nasdaq leading the decline;*
*Google's financial report raises concerns about the investment returns of AI; ServiceNow tumbles nearly 27%;
U.S. economic growth accelerated in the third quarter, with the PCE price index rising 3.6% year-on-year in September.
On Thursday (the 29th), the three major U.S. stock indices closed lower, ending a three-day consecutive upward trend. Google's financial report fell short of expectations, sparking concerns among investors about the returns on investments in artificial intelligence (AI) and the demand for financing, putting pressure on tech stocks. sectors such as healthcare performed stronger, which to some extent limited the overall market decline.
As of the close, the Dow Jones Industrial Average fell 132.54 points, or 0.25%, to 52,342.56; the Nasdaq Composite Index fell 365.13 points, or 1.38%, to 26,184.72; and the S&P 500 Index fell 23.59 points, or 0.30%, to 7,720.39.
【Popular Stocks Performance】
Most leading tech stocks fell. Google Class C shares dropped by 12.29%, Amazon fell by 4.25%, NVIDIA fell by 0.80%, while Tesla and Microsoft closed slightly lower; Meta rose by 1.96%, and Apple rose by 1.48%.
Google's parent company, Alphabet, reported a 25% year-on-year increase in revenue for the third quarter, reaching $127.58 billion, but it still fell short of market expectations. Search and other advertising revenues grew by 12% year-on-year to $63.35 billion, failing to meet expectations for the second consecutive quarter. The company incurred capital expenditures of approximately $51.4 billion during the quarter, with a net outflow of free cash flow of $9.07 billion. It maintained its annual capital expenditure guidance of $195 billion to $205 billion and expects to see a significant increase in spending next year.
The monetization capability of search services has become a focal point of attention. Google's Chief Commercial Officer, Philip Schindler ( Philipp Schindler ), stated that the AI model has seen rapid growth in search volume, but the level of monetization is relatively low, which has affected the growth of search revenue. The company is expanding related advertising efforts to reach more users and markets.
Gil Luria, an analyst at the American investment firm Davidson & Company ( D.A . Davidson ), stated that this could indeed be the quarter that investors had been worried about. The market has been paying attention to whether AI chat tools and agents would divert business from traditional search services, and search advertising, with its high profit margins, is precisely an important source of funding for Google's substantial AI construction expenditures.
Microsoft's financial report presents a different scenario. In the first quarter of fiscal year 2027, the company's revenue increased by 19% year-over-year to $92.3 billion, with Azure revenue growing by 48%, and free cash flow amounted to approximately $18.6 billion, which was significantly better than expectations. The growth in cloud business and positive cash flow supported its AI investments, yet the stock price still closed slightly lower on Thursday. The performance of both companies has drawn further attention from investors to whether the growth in AI demand can cover the continuously expanding construction costs.
Some software stocks tumbled sharply. Enterprise software company ServiceNow fell by 26.95%. The company's revenue in the third quarter was approximately $4.11 billion, with an adjusted earnings per share of $1, which was lower than the market's expectation of $1.02; the annual subscription revenue forecast was raised to $15.78 billion to $15.79 billion, but this still failed to boost the stock price. Fortinet fell by 20.09%, and SAP fell by 4.63%.
Most chip stocks fell, with the Philadelphia Semiconductor Index dropping by 1.42%. Micron Technology declined by 13.24%. SanDisk and Micron Technology fell by 5.32% and 4.98% respectively, AMD fell by 2.08%, and TSMC ADR fell by 1.75%.
Some non-tech companies' financial reports provided support for the market. Eli Lilly's revenue in the third quarter increased by 39% year-on-year to $24.4 billion, with an adjusted earnings per share of $7.48, both exceeding expectations. The company raised its full-year revenue forecast to $91 billion to $92 billion, and its stock price rose by 6.63%. Although Caterpillar's profits exceeded expectations, it maintained its full-year sales growth forecast unchanged, but its stock price fell by 9.25%, becoming a significant drag on the Dow Jones index.
Hot Chinese concept stocks showed mixed gains and losses, with the NASDAQ Golden Dragon China Index rising by 0.20%. Pinduoduo rose by 2.34%, JD.com rose by 0.71%; Li Auto fell by 2.19%, Xpeng Motors fell by 1.50%, Alibaba fell by 1.41%, and Baidu fell by 1.07%.
【Market Overview】
The decline in tech heavyweight stocks did not evolve into a widespread sell-off across the entire market. On that day, most U.S. stocks rose, with sectors such as healthcare performing strongly, indicating that investors are making choices among corporate financial reports. The market's focus has also shifted from whether demand for AI can continue to grow to how companies will raise funds for investment and when they will generate cash returns.
In terms of economic data, the US Department of Commerce announced that real GDP for the third quarter grew at an annualized rate of 3.4%, faster than the 2.2% in the second quarter. Consumer spending, investment, and government spending supported economic expansion, while exports saw a decline.
Another report shows that in September, personal consumption expenditure ( PCE ) price index rose by 0.5% month-on-month and 3.6% year-on-year; the core PCE price index, excluding food and energy, rose by 0.3% month-on-month and 3.1% year-on-year. Personal income increased by 0.2% that month, nominal consumption expenditure grew by 0.5%, real consumption expenditure changed by less than 0.1%, and the personal savings rate was 3.8%.
Growth resilience coexists with inflationary pressures, leaving the Fed's next move in suspense. The day before, the Fed maintained the federal funds rate target range at 3.75% to 4%, with two members advocating for a 25-basis-point increase.
Daniel Siluck, the head of Global Short-Term and Liquidity Business at JLL Henderson Investors ( Janus Henderson Investors ), stated that this decision can be seen as slightly dovish, but it is more appropriate to view it as a patient wait rather than a abandonment of the tightening tendency. The door to further policy tightening remains open, and the Federal Reserve hopes to determine whether further action is needed based on subsequent data.
Angelo Koulkafas, a senior global investment strategist at Edward Jones Company ( Edward Jones ), believes that strong economic growth and ongoing inflationary pressures have reinforced the market's view that the interest rate hike in October was merely a temporary pause, not the end of tightening policies.
In terms of the labor market, the U.S. Department of Labor reported that as of the week ending October 24, the number of people filing initial claims for unemployment benefits was 194,000, which is a decrease of 1,000 from the previously revised figure. As of the week ending October 17, the number of continuing claims dropped to 1.701 million, with the previous figure revised to 1.722 million, and the unemployment rate remained at 1.1%.
U.S. Treasury yields fall. The end-of-day constant maturity yields from the U.S. Treasury Department show that the 2-year yield was at 4.61%, down 6 basis points from the previous trading day; the 10-year yield was at 4.98%, down 7 basis points, returning below 5%; the 30-year yield was at 5.32%, down 5 basis points.
Regarding the situation in the Middle East, according to Xinhua News Agency, on the 29th, the UK Maritime Trade Operations Office reported that an oil tanker was hit by an unidentified projectile while sailing through the Strait of Hormuz. So far, there are no reports of any injuries to crew members or environmental impacts, and the relevant authorities are conducting investigations. The incident occurred at 16:00 Coordinated Universal Time on the 29th. A schematic diagram attached to the report indicates that the attacked area is located in the southern shipping lane near the Oman side.
Earlier in the same day, the office also reported that a single-masted sailboat had caught fire and then tilted before sinking about 17 kilometers north of Seeb in the Oman Sea, within the Strait of Hormuz. All crew members were safely evacuated. The office reminded vessels in the relevant waters to navigate with caution and to report any suspicious activities promptly.
According to Xinhua News Agency, on the 29th, the Iranian Navy stated that a "non-compliant" oil tanker hit a mine east of the Strait of Hormuz. After the hull was damaged and caught fire, the tanker ceased its voyage. On the same day, the multinational coalition led by Saudi Arabia reported that they had intercepted two ballistic missiles fired by Yemen's Houthi rebels towards Riyadh. Multiple explosions were heard in downtown Riyadh that evening, and local residents received air-raid alerts.
【Large-Cap Performance】
International oil prices closed slightly lower. The settlement price of December crude oil futures fell by $0.78, or 0.76%, to $102.00 per barrel; the settlement price of December Brent crude oil futures fell by $0.44, or 0.38%, to $114.88 per barrel. The market is weighing the risks of supply from the Middle East against the potential for diplomatic progress, and both benchmark oil prices remain above $100 per barrel.
Precious metals decline. COMEX The settlement price of December gold futures fell by $20.20, a decrease of 0.50%, to $4,031.40 per ounce; COMEX The settlement price of December silver futures fell by $1.286, a decrease of 2.40%, to $52.380 per ounce.
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