Wall Street equity indexes dipped on Thursday as AI jitters offset some encouraging economic data while Europe's stocks rallied as the European Central Bank paused its run of rate hikes.
US Treasury yields eased after data showed that the US economy grew faster than expected in the third quarter as resilient consumer spending and AI-driven business investment outweighed the impact of higher oil prices stemming from the conflict in the Middle East. However, oil prices fell on the day as hopes for peace talks took the edge off renewed concerns about supply disruptions from the escalating conflict.
Europe's STOXX 600 rallied after the ECB kept its key rate at 2.5%. Also, ECB President Christine Lagarde confirmed, after months of speculation, that she would leave her post in February.
But on Wall Street, the Nasdaq finished down more than 1% while Alphabet sold off sharply after it revealed a hefty AI-related cash burn in its quarterly report, issued after market close on Wednesday. Also, software companies ServiceNow and Fortinet both tumbled more than 20% after their financial updates.
"Even though markets are down today and reacting negatively to earnings such as Alphabet, ServiceNow, and some other stocks, we also got a GDP number that suggests the fundamentals of the economy are still strong," said Anthony Saglimbene, chief market strategist at Ameriprise.