NEW YORK: Wall Street stocks retreated on Thursday, led by the tech-focused Nasdaq after disappointing results from Google parent Alphabet exacerbated concerns over whether the global technology boom can be sustained.
Shares of Alphabet finished down more than 12 per cent, resulting in around a $480 billion hit to the tech giant's market value in a bruising session.
European bourses had advanced earlier in the day, with the European Central Bank leaving interest rates unchanged after the Federal Reserve maintained US borrowing costs on Wednesday.
The euro dipped after Christine Lagarde announced she would step down as the ECB's president in February, but then rose after her press conference.
The drop in Alphabet weighed on all three major US equity indices, led by the tech-focused Nasdaq, which lost 1.4 per cent.
The Alphabet slump came after it reported disappointing growth in both advertising revenue and revenue from its search business.
The company also said it would continue to increase capex spending significantly in 2027 after estimating the 2026 level as between $195 billion to $205 billion.
"I would broadly think of all of this as a long-range planning process, not a short-term allocation exercise," Google CEO Sundar Pichai told analysts of the company's investment splurge. But markets were unnerved by the plan.
The Alphabet report "is renewing concerns about AI investment returns, helping push the Nasdaq sharply lower," said a note from Briefing.com.
Shareholders "want clear evidence that all of this investment will eventually translate into stronger profits," Angelo Kourkafas of Edward Jones said.
But Kourkafas noted that the weakness in equities was not broad-based, with Eli Lilly and MasterCard among the companies that gained after earnings reports.
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