Alphabet Inc. shares plunge 3.14% as macroeconomic uncertainties drive tech sector rotation

Alphabet Inc. Class C shares plunged 3.14% in pre-market trading on Dec. 18, 2025, as investors recalibrated growth valuations amid shifting macroeconomic signals. The selloff came amid broader market rotation away from tech stocks, driven by evolving inflation expectations and Federal Reserve policy uncertainties.

Analysts attributed the decline to sector-wide speculative unwinding rather than company-specific concerns. Alphabet’s core advertising revenue and AI-driven product roadmap remain intact, but overvaluation in high-multiple tech stocks has intensified scrutiny. Investors are rebalancing portfolios ahead of year-end, with focus turning to macroeconomic fundamentals versus equity price action.

Market participants remain cautious ahead of key earnings reports later in the week. While Alphabet’s dominance in digital advertising and cloud services supports long-term growth, near-term volatility is expected to persist as traders navigate fiscal policy divergence and interest rate trajectory uncertainties.

Over the past year, the tech sector has shown a pattern of sensitivity to macroeconomic shifts, with high-multiple stocks often underperforming during periods of rising interest rate expectations. This behavior reflects the market's risk-averse positioning during uncertain policy environments.

Investors are advised to monitor not only Alphabet’s upcoming earnings but also broader economic indicators, such as the latest CPI data and Fed communication. These signals will help determine the direction of interest rates, which in turn will influence tech stock valuations and market sentiment in the coming months.