Caterpillar Falls 9% to 12% Premarket Despite Earnings Beat as Alphabet Slide Deepens and Nasdaq 100 Futures Drop 1.3%

Since Alphabet's third-quarter report sent its shares down about 10% after hours Wednesday, the premarket slide has deepened to between 10% and roughly 11.8%, and the selling has spread to an industrial bellwether. Regular trading on the NYSE and Nasdaq does not begin until 9:30 a.m. ET today, Oct. 29, so every figure below is a premarket indication, not an opening price.

Caterpillar joins the drop

Caterpillar is down between 9% and nearly 12% in premarket trading. That comes after a quarter that beat on profit.

The company reported adjusted earnings of $7.20 a share, up from $4.95 a year earlier. Analysts expected $7.03 to $7.06, depending on the survey. Revenue rose 17% to $20.68 billion, essentially in line with the $20.69 billion estimate.

Operating profit climbed 38% to $4.214 billion, and the margin widened to 20.4% from 17.3%. Power generation sales jumped 30% to $3.42 billion, driven by turbines and large reciprocating engines used mainly in data centers.

"Our third-quarter results reflect the durability of our end markets, with strong order rates and a record backlog," Chairman and CEO Joe Creed said.

Why it is falling is not settled. CNBC pointed to construction industries sales that came in slightly below estimates. Trading Economics tied the drop to Caterpillar forecasting "moderate" sales growth in the fourth quarter.

Bespoke Investment Group flagged that a drop beyond 10.93% at the open would be Caterpillar's worst earnings-day gap in its history. Bespoke said the biggest gap down since July 2002 is already in view.

Alphabet's gap

Bespoke also flagged Alphabet as set for the largest earnings gap down in the company's history. Alphabet missed on adjusted earnings per share and revenue. Revenue was $127.58 billion against an estimate of $127.83 billion, according to figures compiled by 24/7 Wall St.

Free cash flow was negative $9.07 billion. Alphabet kept its 2026 capital spending forecast at $195 billion to $205 billion. Google Cloud revenue grew 103%.

Morningstar's analysts take a longer view. A Morningstar piece on the stock argues that Alphabet "still has the ingredients to win in an AI pullback," even though the company is "no longer loved by investors." The cloud growth and the cash burn are both in the same quarter.

The wider tape

Nasdaq 100 futures are down between 1.1% and 1.3%, S&P 500 futures are down 0.4% to 0.5%, and Dow futures are off 150 to 171 points. The S&P 500 is on track to snap a three-session winning streak.

Chip and software names are under pressure. The iShares Semiconductor ETF is down more than 2% and the Roundhill Memory ETF is down more than 3%. Fortinet and ServiceNow each posted double-digit premarket losses after their own earnings.

Microsoft is up roughly 1% to 3% after beating on revenue and earnings on Azure growth. Neocloud stocks fell after Microsoft's capital spending came in lower than expected. CNBC reported that the figure suggests infrastructure partners are taking longer to deliver data center capacity.

Not everything is red. Eli Lilly is up about 4% to 5% after raising its revenue outlook on weight-loss drug demand. Merck is up 2.4% after lifting its guidance.

Rates and inflation data

The Federal Reserve held its benchmark rate at 3.75% to 4% on Wednesday. Two policymakers dissented in favor of a quarter-point hike. The committee had raised rates by a quarter point in September.

Fed Chair Kevin Warsh said he is confident inflation expectations remain well anchored. The committee's statement said inflation "remains elevated" and that it is awaiting the "accumulation of more information."

Daniel Siluk of Janus Henderson Investors said the decision "can be interpreted as mildly dovish at the margin," but is "better viewed as an expression of patience rather than a shift away from a tightening bias."

This morning's data was mixed. The economy grew 3.4% in the third quarter, above the Dow Jones consensus of 3.1%. The PCE price index rose 0.5% in September, taking annual inflation to 3.6%. CNBC said the monthly figure matched expectations and the annual rate came in just below.

Ahead of the open

Amazon and Intel report after the closing bell today. They were down 2.2% and 3.5% in premarket trading, respectively. Amazon is the next hyperscaler to put its capital spending and cloud returns on the table.

The immediate open question is where Caterpillar and Alphabet actually print at 9:30 a.m. ET. For Caterpillar, a fall past 10.93% would set a record.