Google Parent Tumbles 13% As Tech Jitters Pull Down Wall Street Stocks

Wall Street's main stock indices flashed red Thursday as investors dropped shares in the parent company of Google following results that flamed concerns over whether the global technology boom can be sustained.

After a mostly downbeat showing across Asia, Europe's main stock indices advanced, with the European Central Bank leaving interest rates unchanged after the Federal Reserve maintained US borrowing costs on Wednesday.

The euro dipped however as Christine Lagarde announced she would step down as the ECB's president in February.

Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay

"Buoyed by strong corporate results, European markets chalked up strong gains on Thursday, bucking the negative trend seen in Asia overnight," said AJ Bell investment director Russ Mould.

Bumper profits for oil giants Shell and TotalEnergies helped lift the London and Paris stock markets. 

Both companies benefited from disruptions to oil and gas supplies in the Middle East, which boosted prices and refining margins.

Crude prices shed around two percent, however, on reports of renewed diplomatic efforts between the United States and Iran to avoid further strikes. 

Wall Street opened lower, with the tech-heavy Nasdaq Composite dropping 1.4 percent.

Shares in Alphabet plunged after it reported after Wednesday's close lower-than-expected profit while it maintained big spending on artificial intelligence. 

"The stock quickly fell over 10 percent as investors clocked a sharp drop in free cash flow, along with a slowdown in Google's search engine growth," said Trade Nation analyst David Morrison.

There are concerns that the growing prominence of AI search will undermine Google's search engine and the juggernaut ad business built around it.

Underwhelming results from South Korea's Samsung Electronics also added to doubts about the returns on AI spending. 

Samsung, the world's largest maker of memory chips, delivered record quarterly profits but missed market expectations in its semiconductor division. 

South Korea's Kospi shares index closed down 1.2 percent, while Hong Kong and Shanghai also fell. Tokyo finished higher. 

In other tech news, Microsoft posted forecast-topping revenue and profit, fuelled by its Azure cloud computing division. Its shares added 0.8 percent.

"Tech earnings will remain in focus today with Amazon and Intel reporting" after the US close, said Deutsche Bank's Jim Reid. 

Markets had enjoyed a healthy run-up in the previous two days as traders welcomed strong reports from South Korean chip titan SK hynix and an impressive IPO filing from Claude-creator Anthropic.

There was little major reaction to the Federal Reserve's widely expected decision to hold interest rates, as it cited the need for more data in the fight against inflation, which has held stubbornly above officials' two-percent target for five years.

Two dissenting members of the panel voted for an immediate interest rate increase.

Personal consumption expenditures data, the Fed's preferred inflation gauge, showed that core prices that exclude volatile food and energy products rose by 3.1 percent year-on-year in September.

"Both headline and core PCE rose to their highest levels since May, underscoring that inflation remains a stubborn issue," said eToro US investment analyst Bret Kenwell.

Over three-quarters of investors believe the Fed will raise interest rates in December, according to CME's FedWatch tool.

Meanwhile the US economy grew at a better-than-expected annualised rate of 3.4 percent in the third quarter, beating expectations.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)