Update: US Equity Indexes Drop as Communication Services Plummets Following Alphabet's Disappointing Results

03:00 PM EDT, 10/29/2026 (MT Newswires) -- (Updates with index/price moves from the first paragraph.) US equity indexes declined after a sharp sell-off in Alphabet's (GOOG, GOOGL) shares weighed on communication services and mega-cap technology companies, outweighing sector-wide gains elsewhere. The Nasdaq Composite dropped 1.6% to 26,128.6, the S&P 500 fell 0.6% to 7,700, and the Dow Jones Industrial Average retreated 0.5% to 52,196.4. Communication services plunged 6.8%, 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 seven were either technology or communication services names, according to data compiled by Finviz. Alphabet led decliners among these 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. Alphabet's Google search revenue miss drove the Q3 top-line shortfall as more people used artificial-intelligence-led summaries that appear at the top of search results, BofA Securities said in a note. Caterpillar (CAT) was the third-worst performer among the index heavyweights, sliding 9.7% 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 22%, 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, but shares still slipped less than 1% amid a drop in risk appetite for hyperscalers. The iShares PHLX Semiconductor Exchange Traded Fund, which has about $48.43 billion in assets under management, dropped 2.2%, reflecting selling in AI industry-related names.