Market Open: Stocks Fall, Alphabet Sinks, AI Doubts Grow • 10/29/26
00:00 CNBC Business News Update Market Open. I'm Jessica Eddinger. Wall Street's in the red this morning. The S&P 500 Index could be heading for its first loss in four days. Some disappointing earnings reports from Google and YouTube parent Alphabet. Also from Caterpillar, the Dow down 213 points. Alphabet shares leading it lower this morning. They are tanking 13%.
00:26 The S&P 500 Index down 44 points. That's a half percent. The NASDAQ now down 451 points, 1 and 3 quarters percent. Caterpillar shares, by the way, down almost 10 percent this morning. Chipmakers in the red. Alphabet's earnings miss may reflect the first real sign that AI is taking a bite out of the search business. Google is the bread and butter of Alphabet. Here's New Burgers, Stephen Eisman with CNBC's Becky Quick. You've said you think the entire market is dependent on the AI. trade, why are you not willing to take that next step to say the market's going to come down substantially? It's a good question.
01:08 I think it's a scary bet to make because so much of the market is on the other side and it's still reading tea leaves. I think we're getting closer. I think the numbers from Google scared people. The numbers from Service Now scared people. The numbers from Microsoft given the the the CAPX being lower is hurting the neoclouds today. It's all pointing in that direction.
01:37 I just not quite sure when the tipping point is. Inflation rose again last month and the new PCE numbers inside the GDP report, PCE is the personal consumption expenditures. It's a measure of U.S. inflation that the Fed prefers. Full PCE, up almost a half percent from August to September, the biggest monthly gain since March. year over year inflation jumped the most since last May. Now, GDP is gross domestic product.
02:06 It's a measure of U.S. economic growth. GDP came in at a better than expected 3.4%. The AI spending and the buildout rolls on. Fewer people applied for unemployment benefits in the U.S. last week. $194,000, the lowest since mid-July, cuts remained low. Most Americans are enjoying some sort of job security. Eli Lilly would blowout quarterly results increasing its sales outlook as demand surges for its diabetes and weight loss, GLP1 medicines like Zepbound and Manjaro.
02:39 But still, some people who need the drugs can't get them because they're still too expensive and fewer employers are covering them. Walmart bucking the trend saying it will cover them for its employees. Here's Lilly's CEO David Ricks on CNBC. There's a lot of drop-off, et cetera, and that happens in certain segments, but a key driver that is the economics. So coverage and programs like the Medicare Bridge program are key. And so far, if we look at first and second fills for patients who are seniors in that program, the drop-off is very low. Similar when you have consistent access through your employer and Medicaid.
03:20 So I think the key story here isn't that people don't tolerate the drugs over time. it's that they worry about the affordability. We need more access and coverage. We're working on that. DoorDash buying Instacart for $17 billion. Powerball jackpot top three quarters of a billion dollars for this Saturday night. No winner last night.
03:40 The new jackpot, 760 million. I'm Jessica Eddinger, CNBC.
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