World shares and U.S. stock futures were mixed Thursday after the Federal Reserve left interest rates unchanged, with disappointing results from Google parent Alphabet weighing on technology stocks. Investors are reassessing whether the multibillion-dollar artificial intelligence spending boom can justify current valuations.

What did the Fed decide?

The Federal Open Market Committee voted 10-2 to hold its benchmark federal funds rate in a range of 3.75% to 4%. Policymakers said they hope incoming data in the coming weeks will inform their next move. The central bank also plans to phase in an adjusted schedule, holding rate-setting votes at seven of eight meetings next year, a change that prompted traders to recalibrate expectations for the path of rates.

Read also US stock futures rise ahead of Federal Reserve decision

How are markets reacting?

U.S. futures pointed in different directions: S&P 500 contracts slipped 0.4% while Dow futures gained 0.4%. In Europe, Germany's DAX rose 0.8%, France's CAC 40 jumped 1% and Britain's FTSE 100 added 0.5%. Asia was uneven, with Tokyo's Nikkei 225 up 1.1% while Hong Kong's Hang Seng fell 0.6% and the Shanghai Composite lost 0.8%.

Why is Alphabet's report rattling tech investors?

Alphabet shares fell about 10% in after-hours trading after quarterly revenue came in below expectations. Microsoft gained nearly 3% on strong cloud sales, while Oracle had earlier surged 11% on a long-term free cash flow outlook. In South Korea, Samsung Electronics dropped 4.1% despite solid results, as its shareholder return plans disappointed some investors, and the Kospi lost 1.2%.

What else is weighing on sentiment?

Oil fell about 0.7% to roughly $102 a barrel, even as U.S. officials warned that renewed military action against Iran could follow the Nov. 3 midterm elections. Attention now turns to other central bank decisions later this week, as well as whether upcoming U.S. data support the Fed staying on hold through year-end.

FAQ

What rate range did the Fed keep?

The benchmark federal funds rate remains at 3.75% to 4%, following a 10-2 vote by the Federal Open Market Committee.

Why did Alphabet shares drop?

Alphabet's quarterly revenue missed market expectations, raising questions about whether its large AI investments can generate enough sales to justify the spending.