Alphabet Rally Lifts S&P 500 and Nasdaq as Economic Worries Cap Gains
— In U.S. trading Wednesday, the S&P 500 rose 0.1% and the Nasdaq Composite gained 0.6% after Alphabet shares jumped about 8% following a federal judge’s ruling that allows Google to keep Chrome while banning exclusive search deals and requiring some data sharing; the Dow Jones Industrial Average fell roughly 230 points, or 0.5%.
Key Takeaways
- Alphabet surged ~8% after a federal judge ruled it may retain Chrome but must avoid exclusive search contracts.
- Nasdaq led gains (+0.6%) while the Dow lagged, down about 0.5% (~230 points).
- Apple rose ~3% because the ruling preserves lucrative search placement on iPhones.
- Job openings (JOLTS) fell to 7.18 million in July, increasing focus on Friday’s August jobs report.
- Long-term Treasury yields eased: 30-year ~4.905%, 10-year ~4.226%, 2-year ~3.615%.
- Investors warn of a seasonally weak September; Wells Fargo notes the month averages a -0.7% S&P return since 1950.
- Analysts cited AI-driven revenue growth and stronger YouTube/Cloud results as reasons for renewed optimism in Alphabet.
Verified Facts
A federal district judge ruled that Google can continue distributing the Chrome browser but cannot enter exclusive search agreements and must share certain search data. The decision follows a 2024 finding that Google improperly maintained a dominant position in general search. Market reaction was immediate: both Alphabet share classes traded at new highs during the session.
Market breadth favored technology. The Nasdaq Composite advanced 0.6%, while the S&P 500 climbed 0.1%. The Dow’s underperformance reflected weaker energy and bank stocks amid concerns about a slowing economy and fluctuating bond yields.
The Labor Department’s Job Openings and Labor Turnover Survey showed July openings of 7.18 million, below the Dow Jones estimate of 7.4 million. That softer JOLTS print pushed Treasury yields lower: the 30-year fell to about 4.905% (down ~6 basis points), the 10-year to roughly 4.226% (down ~5 bps), and the 2-year to around 3.615% (down ~4 bps).
Wall Street commentary reinforced the market move. Evercore ISI’s Mark Mahaney called the ruling a “clearing event” for Alphabet, saying investors can refocus on fundamentals such as YouTube and Google Cloud growth. Several firms raised price targets or maintained buy-equivalent ratings after the ruling.
Context & Impact
September is historically the weakest month for equities; Wells Fargo’s Scott Wren notes the S&P 500 has averaged a -0.7% return in September since 1950. That seasonal backdrop, combined with lingering macro risks, keeps volatility elevated.
Traders are weighing multiple cross-currents: a legal outcome that removes a major regulatory overhang for Big Tech; softer hiring signals from the JOLTS report; and uncertainty around trade-policy rulings that could affect tariffs and Treasury markets. AI spending expectations remain a key risk/reward driver for 2026 forecasts.
- Positive: Alphabet’s ability to avoid a breakup preserves current business arrangements and supports advertising and AI monetization prospects.
- Negative: Slower labor demand and tariff-related legal developments may sap growth momentum and pressure cyclical sectors.
Market reactions across sectors
Retail and select consumer names moved strongly on company reports: Macy’s jumped after beating earnings and raising guidance, while Chipotle received an upgrade from Rothschild & Company Redburn. Small-cap inflows also showed strength, with Bank of America reporting near-record buying of small/micro caps following dovish comments from the Fed’s Jackson Hole discussion.
“This was clearly a clearing event for GOOGL shares…you can focus on the fundamentals,”
Mark Mahaney, Evercore ISI
Unconfirmed
- Whether an appeals process will materially alter remedies or timelines for compliance with the ruling.
- How quickly partners (including Apple) might change or expand AI integrations with Google in response to the decision.
- Full fiscal impact on ad pricing and search revenue beyond near-term analyst estimates.
Bottom Line
Wednesday’s session showed that favorable legal news for a major tech leader can lift broad market tech exposure even as economic data and geopolitical rulings keep other sectors back. Investors should watch Friday’s August jobs report, upcoming corporate earnings, and any appeals or implementation guidance tied to the court decision for cues on whether the recent rotation into tech is durable.