Oil prices sink on fresh diplomatic efforts in Middle East

Cargo ships lie at anchor in the Strait of Hormuz off Bandar Abbas, Iran, on Oct. 24. (Amirhosein Khorgooi/ISNA via AP)

NEW YORK — A potentially historic drop for Alphabet’s stock is dragging the U.S. market lower Oct. 29 after the company behind Google and YouTube reported weaker growth for the summer than analysts expected. The report underscored worries about whether all its huge investments in AI technology will pay off.

Oil eased as traders assessed fresh diplomatic efforts in the Middle East to avert a resumption of U.S. military strikes on Iran, a prospect that has pushed prices higher, Bloomberg reported.

The price for a barrel of Brent crude oil sank 2.1% to $109.26. West Texas Intermediate crude fell 2.3% to $100.46 a barrel, Bloomberg reported.

The S&P 500 fell 0.4% and was on track for its first loss in four days, while the Nasdaq composite tumbled 1.4%. Most of the rest of the stocks on Wall Street were rising, though, and the Dow Jones Industrial Average was down a more modest 0.3%, or 160 points, as of 10 a.m. Eastern time.

Alphabet is one of the most influential stocks on Wall Street because it’s one of the largest, and its 12.2% drop was on track to be its worst since it began trading more than 20 years ago. It was under heavy pressure to at least meet analysts’ expectations for growth amid concerns about how much it’s spending to invest in AI.

Alphabet said late Oct. 28 that it burned through more cash during the latest quarter, according to a measure called free cash flow, after its purchases of property and equipment topped $51 billion.

crack spreads continue to weaken, it appears seasonal factors and declining refinery attacks on Russia is helping to cool off refined product prices. for now, national average will drift lower. $4.215/gal for gasoline, $6.319/gal diesel, both could fall 5-10c by next week.

— Patrick De Haan (@GasBuddyGuy) October 29, 2026

Such worries are weighing on the entire AI industry following a frenzy to build data centers and fill them with AI chips. Not only are concerns high that the AI revolution may not produce as much profit and productivity as hoped, future spending is also under pressure because of how expensive it’s become to borrow money.

If not for Alphabet’s drop, the S&P 500 would have been higher for the day.

Several companies rallied after reporting stronger profits for the summer than analysts expected, including KLA Corp. The company, whose equipment helps make semiconductors, rose 6.4%.

Eli Lilly climbed 7.8%, Matercard rose 4.7% and Merck added 5%.

Outside of earnings reports, DoorDash rose 5.8% after saying it agreed to buy Instacart for $65 per share. Separately, DoorDash also reported profit and revenue for the latest quarter that missed analysts’ expectations.

In the bond market, Treasury yields eased following mixed data on the U.S. economy.

The overall economy’s growth may have accelerated by more during the summer than economists expected, according to a preliminary reading thanks to spending by U.S. consumers and businesses investing in AI. But other reports said Americans’ growth in incomes was weaker in September than economists expected, while a measure of inflation worsened.

Fewer U.S. workers applied for unemployment benefits last week, meanwhile, which could indicate few layoffs across the country.

Following the jumble of reports, the yield on the 10-year Treasury fell to 4.98% from 5.05% late Wednesday. It’s back to where it was early Oct. 28, before traders began interpreting the latest messages from the Federal Reserve as potential signals that it may pare back on hikes to interest rates to keep a lid on inflation.

In stock markets abroad, indexes rose in Europe following a mixed finish in Asia.

South Korea’s Kospi fell 1.2% due to a drop for market heavyweight Samsung Electronics. It sank 4.1% even though it reported a big jump in profit.

AP Business Writer Chan Ho-him contributed to this report.