Alphabet fell 12.6%, but the average stock rose

Alphabet fell 12.6% Thursday, to $283.82, and the S&P 500 fell 0.3%, but the average stock in that index rose. Invesco S&P 500 Equal Weight ETF, RSP, which gives every company in the index the same weight, rose 1.2%. iShares Russell 2000 ETF, IWM, a fund of smaller companies, rose 1.0%. A few very large companies fell hard after reporting. That is why the index fell while the equal-weight fund rose.

The Nasdaq Composite fell 1.4%. CNBC said the S&P 500's decline snapped a three-day advance. The Dow Jones Industrial Average lost 133 points.

Alphabet

The business was still growing. In its Wednesday release, Alphabet said third-quarter revenue rose 25% to $127.6 billion, and Google Cloud revenue rose 103% to $30.7 billion.

The shares fell on what missed. CNBC said it was the company's first miss on both earnings and revenue in nearly four years, with profit excluding some items of $2.67 a share against $3.02 expected. The $127.6 billion of revenue was short of the $128.22 billion estimate CNBC cited.

CNBC said free cash flow was negative $9.07 billion, against $2.70 billion expected, and called that drop a worrying sign for spending on artificial intelligence. Alphabet still expects capital spending to increase significantly in 2027, CNBC said.

Microsoft reported the same night. It beat estimates, CNBC said, and the stock finished down 0.2%.

YieldMax GOOGL Option Income Strategy ETF, GOOY, which sells options on Alphabet for income, fell 12.2%.

The difference between the two sector funds was concentration. Global X PureCap MSCI Communication Services ETF, GXPC, which weights companies by market value and does not cap any one name, fell 6.6%. State Street Communication Services Select Sector SPDR ETF, XLC, fell 1.9%. Alphabet is about 23% of XLC. Meta Platforms, about 21% of that fund, rose 2%.

Caterpillar

Caterpillar fell 9.2%. CNBC called it the stock's worst day since March 2020. Companywide revenue and earnings beat estimates, CNBC said, but sales in the construction business came in slightly below estimates.

ServiceNow

ServiceNow fell 27%, to $109.67. CNBC said it was the stock's worst day on record.

The quarter was close to the forecast, and the company still slightly raised its full-year outlook for subscription revenue. Profit excluding some items was $1.00 a share, against a $1.02 forecast, and revenue of $4.11 billion was roughly in line with a $4.10 billion estimate, CNBC said.

That gap does not explain a drop this size. CNBC said the results revived fears that new artificial-intelligence tools will upend traditional software companies, and that ServiceNow's own effort will take longer to pay off. The company has a team that works inside customer firms and builds those tools for them.

"It's just going to be a little bit longer of a waiting game," Tyler Radke of Citi told CNBC. He said the payoff looks like next year.

Fortinet, a cybersecurity company, fell 20%. The Motley Fool reported that the drop followed a trim to its full-year forecast for service revenue. iShares Expanded Tech-Software Sector ETF, IGV, fell 3.5%.

Eli Lilly

Not every large stock fell. Eli Lilly rose 6.6% to $1,373. During the session the shares traded as high as $1,408.38, a 52-week high.

In its Thursday release, Lilly said third-quarter revenue rose 39% to $24.4 billion, driven primarily by Mounjaro and Zepbound. It raised the midpoint of its 2026 revenue guidance by $5.5 billion, to $91 billion to $92 billion from $85 billion to $87 billion.

State Street Health Care Select Sector SPDR ETF, XLV, rose 2.4%.

ADT

ADT rose 33% to $9.87. The home-security company agreed to be bought by Thrive Holdings for $10 a share in cash, ADT said. The shares closed just under that price.

Hyperliquid

The day's sharpest fund gains came from funds that hold HYPE, the token of Hyperliquid, a crypto trading platform. Those funds own the token, not a share of a company.

Intercontinental Exchange, which owns the New York Stock Exchange, said Thursday it had agreed with Trade[XYZ] to bring that firm's markets on Hyperliquid into the United States. Trade[XYZ] runs perpetual futures there, contracts that track a price and never expire. ICE is also taking a stake in Trade[XYZ].

Grayscale Hyperliquid Staking ETF, HYPG, rose 15.5%. 21Shares Hyperliquid ETF, THYP, rose 15.3%, and Bitwise Hyperliquid ETF, BHYP, rose 15.2%.