Alphabet Closes 12.6% Lower in Its Worst Day Ever, but Most Stocks Rise as the Nasdaq Falls 1.4%

Caterpillar added to the gloom, falling 9.2 percent to become the Dow's second-worst stock after Alphabet, NBC said.

How did the rest of the market do?

Better than the headline indexes suggest. The equal-weight S&P 500 fund rose 1.20 percent, so most stocks actually gained, and the small-cap Russell 2000 climbed about 1 percent, according to Capp Notes. Health care led the sectors with a 2.40 percent gain, followed by real estate at 2.21 percent and consumer staples at 1.54 percent. Technology fell 1.18 percent and communication services 1.87 percent.

The economic backdrop helped the broad market. September inflation matched forecasts, with the PCE price index up 3.6 percent from a year earlier and core PCE at 3.1 percent, IBTimes said, and traders trimmed the odds of a December Fed rate hike to 79.6 percent from 84.2 percent a day earlier. Third-quarter growth had already come in at a 3.4 percent pace, as we reported earlier today.

What is happening after the bell?

Two more big names were sliding once the session ended. Amazon, which reported after the close, was down roughly 6 percent in extended trading and Intel about 17 percent, both figures from Capp Notes, while investingLive had them down 6.4 percent and 16.6 percent at 4:50 p.m. in New York, after deeper early drops. Nasdaq futures were about 1.2 percent lower.

That sets up an uncomfortable Friday for the AI trade. If Amazon and Intel hold their losses, three companies at the centre of the computing build-out will have been punished in a single day, two of them over what the build-out costs. The test is whether the broad rotation into health care, real estate and small caps continues, or whether the Nasdaq's weakness finally pulls the rest of the market down with it.