Key Highlights

● Communication services is the only sector with slowing Earnings growth.

● Negative surprises from Alphabet and Meta drove the slowdown.

● Alphabet rose after introducing two new TPU chips.

● Take-Two's Grand Theft Auto VI launch is days away.

Earnings season usually lifts every sector's growth rate as companies beat forecasts. This quarter, one sector broke the pattern. According to news reports's Earnings Insight of November 6, communication services is the only S&P 500 sector whose earnings growth has declined since the end of the quarter, sliding from roughly half to about one-seventh.

Market data attributed the slowdown to big negative surprises from Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META). Because those two companies are so large, their results dominate the sector's aggregate numbers.

Why two companies can move a whole sector

Communication services spans internet companies, telecom carriers, cable operators, media companies and video-game publishers, but FactSet's attribution shows how heavily Alphabet's and Meta's results weigh on the group's aggregate figures. When analysts had penciled in strong growth for both, the negative surprises left a gap that the rest of the sector did not Fill this quarter, according to market coverage's numbers.

The contrast with the broader market is stark. Blended earnings growth for the S&P 500 is running at nearly a third, reports said, with energy leading and information technology growing by more than two-thirds on the strength of semiconductors.

The stocks bounced anyway on Monday

Investors did not let the earnings shortfalls define Monday, November 9, 2026. Meta jumped after a JPMorgan analyst added it to the bank's Analyst Focus List with an Overweight rating and a $940 price target, citing AI-driven ad growth and its Muse AI models, according to market reports. Meta's Muse agent topped 5 million downloads in three weeks, reports said.

Alphabet rose after introducing two new eighth-generation TPU chips, according to market data. Its Class A shares closed modestly higher at $288.15, after being up more sharply intraday.

The broader market surged, with the S&P 500 up 173.08 points to 7,549.94 and all 11 sectors higher.

Elsewhere in the sector

Other members had mixed news. Take-Two Interactive (NASDAQ:TTWO) slid during the regular session and then reported after the close, with Revenue of $1.5 billion missing the $1.65 billion consensus, reports said, while reaffirming its Fiscal 2027 bookings outlook ahead of the Grand Theft Auto VI launch. Comcast (NASDAQ:CMCSA) reportedly plans to cut more than 1,000 jobs in its connectivity and platforms divisions, according to news reports.

Communication services stocks also face the same macro pressures as the rest of the market. Futures heavily favor a Federal Reserve rate hike in December, and the 10-year Treasury Yield held near 4.87 on Monday.

Why it matters for the index

Alphabet and Meta are among the largest companies in the S&P 500, so their earnings trends influence the entire index. A sector-wide slowdown driven by two megacaps can mask healthier trends among smaller members, and it can also reverse quickly if those giants deliver upside in coming quarters.

Alphabet and Meta Carry the Sector

Investors will watch whether analysts trim forecasts for Alphabet and Meta for the fourth quarter, or whether AI-driven ad growth, a theme analysts highlighted, revives expectations. Take-Two's Grand Theft Auto VI launch, now days away, could give the sector a jolt in its next reporting period. Market data next weekly update will show whether the sector's growth rate stabilizes. More broadly, Nvidia's November 17 report and Tuesday's October consumer price index will shape sentiment toward the big tech-linked names that dominate this sector.