US EQUITY OPEN: Indices gain post-midterms as hyperscalers surge and neoclouds tumble

OPEN: US indices opened in the green after two-way trade in US equity futures following the midterms. Initially, a Democratic sweep trade was seen, with the Dollar, yields and US equity futures all lower. However, equity futures soon reversed after President Trump said he will accept the election result and is prepared to work with Democrats, and as hyperscalers saw a notable bid despite data center and neocloud names being hit hard. Amazon and Meta benefitted as Louisiana narrowly stayed Republican, given both companies have large build-outs in the state, which supported the broader equity bid. Meanwhile, SpaceX and Tesla are under pressure, as many of the newly elected Democrats have taken firm positions against the AI-driven data center build-out. Sectors are broadly higher, with only Energy, Utilities and Industrials in the red. Energy is weighed on by losses in the crude complex, as Trump appears more conciliatory after the midterms than expected, and after the FT reported overnight that he said the US has no immediate plan to strike Iran. The midterms have often been touted as a key date in the US-Iran conflict, with any renewed action widely expected after the vote. The Dollar is weaker and yields are lower across the curve, benefitting all G10 peers. Antipodeans outperform, likely on risk sentiment, while the Yen is the relative laggard, albeit still eking out gains against the Greenback. Precious metals are rallying, helped by the softer Dollar and lower yields. Looking ahead, US ISM Services is due at the top of the hour, with earnings from ARM, QCOM and APP after-hours.

• Renewables gain First Solar (FSLR), Plug Power (PLUG), Enphase Energy (ENPH)/
• Neoclouds pressured CoreWeave (CRWV), IREN (IREN), Nebius Group (NBIS)/
• Hyperscalers strengthen Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOG).
• Nvidia (NVDA), Vertiv (VRT) and Oracle (ORCL) weighed on by less buildout.
• SpaceX (SPCX) and Tesla (TSLA) given where they operate their AI supercomputer infrastructure from.

• Oracle (ORCL): Cancelled $7bln 5yr AI chip leasing agreement w/ Tencent following pressure from Trump admin.
• AMD (AMD), Super Micro Computer (SMCI): Reversed a lot of strength post-strong earnings.
• Arista Networks (ANET): EPS & rev. beat w/ strong next Q outlook.
• Skyworks Solutions (SWKS): Poor next Q guidance.
• Amdocs (DOX): Dismal outlook driven by significant T-Mobile headwinds incl. ongoing legal dispute.
• Datadog (DDOG): Q3 beat but flat sequential growth.
• Booking Holdings (BKNG): Profit surpassed Wall St. exp.
• Amgen (AMGN): Strong Q metrics alongside lifting FY view.
• Block (XYZ): Top, bottom surpassed Wall St. exp. & raised FY profit view.
• Riot Platforms (RIOT) signs 15-year, 910MW data centre lease with an AI developer worth approx. USD 28bln, marking a major expansion into AI infrastructure.