US EQUITY OPEN: AI weakness continues, weighing on Nasdaq

US EQUITY OPEN: Stocks opened mixed on Thursday following Wednesday's CPI and AI-driven sell-off. The Nasdaq continued to bear the brunt of selling in memory, chip and AI-related names, while the S&P 500 was marginally lower, the Dow gained and the Russell 2000 was little changed. Meanwhile, the equal-weight S&P 500 outperformed, suggesting relatively positive breadth despite the technology-led weakness.

Some of the AI pressure may be attributable to Anthropic's revenue figures, which rose to USD 16.8bln in Q3 from USD 11.5bln in Q2, disappointing some analyst expectations. The FT noted that revenue growth slowed from earlier in the year, when revenue doubled between Q1 and Q2. Meanwhile, annualised revenue reportedly reached USD 65bln at the end of July, although Anthropic did not provide an updated figure this time. SemiAnalysis estimated that annualised sales had risen to approximately USD 74bln, below some of the projections made during the summer, when Anthropic told investors it expected to surpass USD 100bln in annualised revenue by year-end. Elsewhere, attention remained on CoreWeave's corporate bonds following Wednesday's sharp rise in yields. Bond prices have since recovered from their extremes, although CoreWeave shares remained under significant pressure, falling around 10%.

Sectors were mixed, with Technology and Industrials lagging amid continued AI-related selling, while weakness in large technology names weighed on the broader indices. Conversely, defensive sectors outperformed, led by Health Care, Consumer Staples and Real Estate.

Elsewhere, WTI and Brent were mixed once again, with overnight geopolitical developments including fresh Ukrainian attacks on Russian energy facilities, while Trump said he was considering using the "mother of all bombs" to target Iranian energy facilities.

Treasury yields declined across the curve, particularly in the belly, despite hotter-than-expected PPI, stronger-than-expected Retail Sales and an upside surprise in the NY Fed Manufacturing survey. The initial reaction to the data was hawkish, with yields rising, although the move was swiftly reversed and T-notes subsequently climbed above pre-data levels. The continued weakness in technology stocks may be contributing to haven demand for Treasuries, helping offset the impact of the stronger economic releases.

• Magnificent Seven ETF (MAGS) / VanEck Semiconductor ETF (SMH) / Roundhill Memory ETF (DRAM): Under pressure after Anthropic's Q3 revenue reportedly fell short of bullish expectations
• Walmart (WMT): Upgraded at Deutsche Bank to 'Buy' from 'Hold'
• Charles Schwab (SCHW): EPS and revenue beat failed to impress
• PNC Financial Services (PNC): Q3 NII missed expectations
• Rocket Lab (RKLB): Neutron launch delayed to 2027
• ManpowerGroup (MAN): Q4 guidance missed expectations; announced CEO transition
• FMC Corporation (FMC): Disappointing preliminary Q3 guidance
• Commercial Metals Company (CMC): Earnings beat expectations
• Penske Automotive Group (PAG): To go private via Motown Acquisition Corp. at USD 212/shr in cash