The S&P 500 managed to close the opening gap down after buyers stepped in to buy the dip. The trigger was a disappointing report from Alphabet: for only the second time in its history, the company posted negative free cash flow, and Google Services revenue,which includes search ads, YouTube, and subscriptions, came in at $96.3 billion, missing Wall Street expectations.

Alphabet free cash flow dynamics

Shares of Alphabet plunged by nearly 13%, erasing about $500 billion of market capitalization. It is the biggest one-day market cap drop for the company and the second-largest single-day hit for a US tech name, trailing only NVIDIA's $590 billion wipeout in January 2025.

Technically, Alphabet formed a so-called "death cross" on the daily chart as the 50-day moving average crossed below the 200-period EMA, a bearish signal that previously appeared for the mega-cap in April 2025 amid tariff-related turmoil.

Alphabet and death cross — dynamics

The sell-off in Alphabet reminded investors about rotation. Approximately 400 S&P 500 constituents advanced, which limited the broad index's decline for the day despite the tech giant's calamity. However, disappointing reports from Amazon and Intel released after the close raise the risk of another gap lower at the next open. Will buyers rush back in to buy the dip?

Underlying concern remains longstanding: the fear is not simply that AI demand is cooling, but that high funding costs and rising credit risk could force hyperscalers to rein in investment. That possibility is what's sparking panic.

Anthropic IPO will be the final litmus test. The Claude developer's planned offering will be a decisive paper for answering whether the AI boom is over. Anthropic aims to out-raise SpaceX — the Musk company pulled in $86 billion; Anthropic is targeting $100 billion. But do investors still have the capital to pour into AI? November should clarify the picture.

Markets reverberate across asset classes. Big-tech sell-offs trigger risk-off flows that push Treasury yields lower — and that, in turn, weighs on the US dollar.

Technically, the daily S&P 500 chart shows mixed signals. Trading in this murky environment is tough, so watch the fair-value tests around 7,725.