Alphabet's worst drop in two decades drags U.S. markets lower

Alphabet's stock is poised for its worst drop in over two decades, dragging U.S. markets lower Thursday after the Google parent reported weaker-than-expected summer growth, raising doubts about its massive AI investments. The S&P 500 fell 0.4%, while the Nasdaq tumbled 1.4%. Alphabet's 12.2% decline follows concerns over its spending, with property and equipment purchases exceeding $51 billion and free cash flow shrinking. Most other stocks rose, buoyed by strong earnings from KLA Corp., Eli Lilly, and Merck, while DoorDash climbed 5.8% after agreeing to buy Instacart. Treasury yields eased to 4.98% after mixed economic data, including weaker income growth and higher inflation, while oil prices fell 2.1%. European indexes rose, but South Korea's Kospi dropped 1.2% on Samsung's decline despite a profit jump.