On Thursday, the U.S. stock market declined. The third-quarter financial report of Alphabet triggered a sell-off in its shares, and concerns about AI returning to the market dragged down indices that are dominated by tech stocks.

The Dow Jones Industrial Average fell 132.54 points, a decrease of 0.25%, to 52,342.55; the S&P 500 Index fell 23.59 points, a decrease of 0.30%, to 7,720.39; the Nasdaq Composite Index fell 365.12 points, a decrease of 1.38%, to 26,184.72.

Most large tech stocks closed lower, with Meta rising by about 2%, Apple rising by over 1%, Amazon falling by over 4%, and NVIDIA and Tesla closing slightly lower.

Google's parent company, Alphabet, fell by 12% after its adjusted earnings per share and revenue for the third quarter fell short of expectations. The company reported a negative free cash flow of $9.07 billion. The company has maintained its annual capital expenditure forecast at $195 billion to $205 billion.

Microsoft reverses its early gains. According to LSEG data, the growth of Azure's cloud infrastructure business under this Windows manufacturer helped it exceed analysts' expectations in terms of earnings and revenue for the first quarter of its fiscal year ending in September, but the stock ultimately closed slightly lower.

The Philadelphia Semiconductor Index closed down 1.42%. Micron Technology fell more than 13%, reportedly in advanced negotiations to acquire the optical communication technology company Lumentum. SanDisk fell more than 5%, Micron fell about 5%, Intel and Dell fell more than 3%, Supermicro Semiconductor fell more than 2%, and Broadcom fell more than 1%.

New cloud service providers experience a decline due to Microsoft's capital expenditure commitments falling short of expectations, indicating that it will take longer for infrastructure partners to deliver data center capacity. CoreWeave's stock price fell by about 5%, and Nebius's stock price fell by more than 5%.

Caterpillar, a component stock of the Dow Jones, fell by more than 9%, recording its worst single-day performance since March 2020. Although this industrial giant's revenue and profits in the third quarter exceeded expectations, the sales of its construction industry business were slightly below expectations. The stock price of the grocery chain Sprouts plummeted by 22% after the company disclosed a pricing strategy that is expected to put pressure on next year's profits. Eli Lilly rose by 6% following strong third-quarter performance of its GLP-1 drug.

As these financial reports are released, the market's scrutiny of artificial intelligence transactions is increasing. Stocks in industries such as semiconductors, storage, and others experienced a difficult period throughout most of October, until they began to recover in recent days. On Thursday, both funds declined; one fell by more than 1%, and the other by more than 4%.

"I believe that in October and as we enter November, technology trading is in a better and more stable position than in August and September. Nevertheless, I think investors are becoming more selective," said B. Riley, Chief Market Strategist at Art Hogan. "I think there is less concern and negative sentiment towards the tech sector overall in the current environment, but specifically, announcements from individual companies may indeed have an impact."

On Wednesday, the Federal Reserve decided to keep interest rates unchanged, maintaining the benchmark rate between 3.75% and 4%. Following the Federal Open Market Committee's 25-basis-point rate hike in September, the decision to maintain the same policy was widely anticipated.

This time, Federal Reserve policymakers stated that inflation "remains high," but they also indicated that they are waiting for "further accumulation of information" before taking additional measures. The Personal Consumption Expenditures Price Index (PCEPI), which is the Fed's preferred inflation indicator, released on Thursday, showed that the pace of price increases accelerated in September. The month-over-month data met expectations, while the year-over-year data was slightly lower than Wall Street's estimates.