Why Alphabet Shares Are Falling

Alphabet Inc GOOGL GOOG shares are trading lower ahead of Thursday's close amid overall market weakness. Concerns about future rate hikes following yesterday's FOMC statement and lower-than-expected initial jobless claims data are sending stocks lower during Thursday's session.

Alphabet generates a significant portion of its revenue from advertising, primarily through Google's advertising platforms. Economic concerns, as indicated by lower-than-expected jobless claims data, can raise worries about consumer sentiment and the willingness of businesses to advertise.

If companies become more cautious about their advertising budgets, it can impact Alphabet's ad revenue growth, which is a key metric for investors.

Rising interest rates can also increase the company's borrowing costs, affecting its interest expenses. While Alphabet has a substantial cash position, it also holds debt.

Higher interest expenses can reduce the company's earnings, potentially leading to lower profitability and dampening investor sentiment.

What's Going On?

The Federal Reserve maintained the federal funds rate within the 5.25% to 5.5% range at its September meeting in a unanimous move.

The September dot plot reveals the median preference for the fed funds rate at the close of 2023 remains unwavering at 5.6%. This figure mirrors projections made back in June, hinting at the possibility of one more rate hike during either of the last two meetings this year...Read More