Update: US Equity Indexes Decline as Alphabet's Quarterly Results Sink Communication Services

01:35 PM EDT, 10/29/2026 (MT Newswires) -- (Updates with index/price moves, macroeconomic data, and company news from the first paragraph.) US equity indexes fell as a sell-off in Alphabet (GOOG, GOOGL) sank the communication services sector and weighed on mega-cap technology names, outweighing gains elsewhere. The Nasdaq Composite dropped 1.3% to 26,187.5, the S&P 500 fell 0.4% to 7,714.4, and the Dow Jones Industrial Average retreated 0.4% to 52,288.8. Communication services slid 6.3%, followed by declines in technology, consumer discretionary, and energy. All but four sectors rose, led by healthcare, financials, and real estate. Of the 10 top-performing stocks in a category with market capitalization exceeding $200 billion each, as many as eight were technology and communication services firms, according to data compiled by Finviz. Alphabet led decliners among the mega-caps, with shares down 13% after the technology giant's Q3 earnings unexpectedly slid from a year ago and sales lagged. The Google search engine owner was also among the worst performers on the S&P 500, the Nasdaq, and the Dow. Caterpillar (CAT) was the third-worst performer among the index heavyweights, sliding 7.7% after the company reported Q3 revenue that fell short of consensus. Its shares were also among the Dow's biggest decliners. Fortinet (FTNT) was hit by a flurry of analyst price target cuts, with Citigroup slashing its price target to $140 from $185 and Barclays to $155 from $210, following the company's Q3 results late Wednesday. Shares of the software group plummeted 23%, among the S&P 500 and the Nasdaq's sharpest decliners. Microsoft (MSFT) posted fiscal Q1 adjusted earnings and revenue that beat market expectations late Wednesday. The iShares PHLX Semiconductor Exchange Traded Fund, which has about $48.43 billion in assets under management, dropped 1.4%, reflecting selling in AI industry-related names. In economic news, the personal consumption expenditures price index grew 0.5% in September, as expected, lifting the year-over-year rate to 3.6% from 3.4%, according to the Bureau of Economic Analysis. The price index increased by 0.3% month-over-month in August. The core PCE price index rose 0.3%, as expected after a 0.3% gain in August. The year-over-year rate accelerated to 3.1% in September from 3.0% in August. Meanwhile, US gross domestic product rose 3.4% in Q3 from 2.2% in Q2, beating the 3.2% increase expected in a Bloomberg-compiled survey. The US Bureau of Economic Analysis will release the second estimate for Q3 GDP on Nov. 25. "The biggest drivers of growth were consumer spending, investment in equipment, inventory accumulation, and federal government spending," Jefferies Chief US Economist Thomas Simons said in a note. "These were offset to a large degree by a massive widening in the trade deficit." US Treasury yields fell, with the two-year yield down 7.1 basis points to 4.66%, and the 10-year rate dropping 4.6 basis points to 4.997%. The front-month West Texas Intermediate crude oil contract dropped 1.5% to $101.29 per barrel, and global benchmark Brent retreated 1.2% to $114.09 per barrel.