US EQUITY OPEN: Indices pare gains as Tech once again underperforms

OPEN: US indices opened in the green, but have pared some gains after equity futures gained on a cooler-than-expected US PPI report that eased some Fed rate hike bets. Sectors are predominantly firmer, with Technology the clear laggard, weighed on by losses in neocloud, memory and semiconductor names, while Nvidia has pared its pre-market gains and dipped into negative territory. Communication Services and Financials sit atop the breakdown, with the former buoyed by strength in Alphabet as hyperscalers continue to benefit from the Nvidia fallout.

The PPI report prompted a dovish reaction, with Treasuries and spot gold rising and the Dollar coming under pressure. Precious metals are holding onto their gains, while Treasuries are now mixed across the curve. The Dollar Index is flat, with G10 FX trading in a narrow range around unchanged; CAD is the relative outperformer, while the Swissy lags. USD/JPY has been volatile as the pair crossed 160 and jawboning from Japanese officials picked up. The crude complex is eking out slight gains, with no notable Middle East developments so far on Friday. Looking ahead, the highlights are Fed speak from Collins, Bowman, Daly and Jefferson, as well as the weekly Baker Hughes rig count.

• Nvidia (NVDA): Attempts to pare recent Huang induced losses
• Microsoft (MSFT): Struggling to restore Teams, Outlook & Copilot following a global outage
• Cisco Systems (CSCO): Slowing product order growth & softer AI orders from hyperscale customers overshadowed strong results & guidance
• Cerebras Systems (CBRS): EPS & rev. beat w/ strong next Q guidance alongside lifting FY26 top line outlook
• Flowers Foods (FLO): Top, bottom line light & lowers FY view
• Modine Manufacturing (MOD): Samsung Electronics is in talks to acquire the Co.
• Palo Alto Networks (PANW): Upgraded at KeyBanc

Sessions of this shape, where a soft inflation print lifts the tape but the prior leadership cohort fades, have historically signalled rotation rather than risk-off: the tell is breadth holding up while the index-heavy names drag, which is what the sector breakdown here describes. The split within AI exposure is the distinction that matters, semiconductors and neocloud names lagging while hyperscalers catch a bid, a pattern that in past episodes has marked the market differentiating capex beneficiaries from capex payers rather than abandoning the theme outright. A dovish PPI reaction in Treasuries and gold alongside a flat dollar is the standard sequence when a cooler print trims but does not reprice the rate path; the follow-through test is whether the curve holds the move into Fed speak rather than retracing by the close. USD/JPY crossing a round-number threshold with official jawboning is a familiar pattern: verbal intervention has historically slowed but not reversed moves absent actual operations, so the pace of any further appreciation and the tone of official commentary are the operative signals. The named catalysts, Fed speakers through the session and the rig count, set the calendar risk for whether the morning's dovish impulse consolidates or fades.