Alphabet earnings miss sends tech stocks lower

Alphabet shares dropped roughly 10% in after-hours trading Wednesday after the Google parent reported quarterly revenues that fell short of investor expectations.

The disappointing numbers raised questions about whether the California-based company can generate enough sales to justify its massive investments in artificial intelligence. In contrast, Microsoft stock gained nearly 3% in the same trading session following better-than-expected earnings.

Asian markets reacted with mixed results on Thursday. South Korea’s Kospi index lost 2.2% to close at 5,880.25. Samsung Electronics shares sank 5.4% despite strong quarterly results, as the company’s shareholder return policy disappointed some investors. Memory chipmaker SK Hynix rose 1.6%, following a 10.9% jump the previous day. Japan’s Nikkei 225 edged up 0.2% to 64,073.17, while SoftBank Group shares fell 0.5%. Taiwan’s Taiex index declined 1.9%. Hong Kong’s Hang Seng index gained less than 0.1% to reach 23,101.86. The Shanghai Composite index shed 0.9% to 3,647.12. Australia’s S&P/ASX 200 climbed 0.5% to 8,888.50.

The Federal Reserve held interest rates steady when it wrapped up its policy meeting on Wednesday. Two Fed officials voted in favor of a rate hike. Analysts noted that a December hike is likely because inflation remains high. The European Central Bank is scheduled to meet later Thursday. The Bank of Japan is expected to hold its rates steady when its policymaking meeting concludes on Friday.

Oil prices fell as U.S. officials warned that renewed military action against Iran could occur after the Nov. 3 midterm elections. Brent crude oil dropped 1.2% to $110.32 per barrel. That price remains significantly higher than the roughly $72 per barrel level seen before the Iran war began in late February. Benchmark U.S. crude fell 1.3% to $101.46 per barrel.

In the bond market, the yield on the 10-year U.S. Treasury eased to below 5.00% after briefly jumping to around 5.04% on Wednesday. The yield on the two-year Treasury steadied at 4.68%, down from higher than 4.77% the previous day. The U.S. dollar fell to 157.72 Japanese yen from 157.84 yen. The euro traded at $1.1146, down from $1.1154.