US Equity Open: Software rout and Alphabet slump weigh on indices; Treasuries rally and metals slip

OPEN: Breadth is strong at the open; however, downside in tech/comms is driving losses at the index level. The big move is in Alphabet (GOOG -12.0%) after a weak earnings report (profit and revenue light, worsening negative FCF); GOOG losses have eroded upside in Microsoft (MSFT -0.8%) after its earnings beat as tech sentiment sours. Tech is also weighed on by heavy downside in software, led by ServiceNow (NOW -24%), which is on track for its worst day since 2016 amid underwhelming subscription revenue. Software is also dragged lower by cybersecurity weakness, as Fortinet (FTNT -20.8%) missed product revenue and next-quarter revenue forecasts and cut its FY services guidance. On the flip side, Healthcare is outperforming following strong earnings from Eli Lilly (LLY +7.7%) and Merck (MRK); Industrials is only modestly in the green, with gains limited by a top-line miss from Caterpillar (CAT -7.6%).

Yields are lower across the curve, falling further after in-line PCE data and soft income/spending figures, with the move accelerating as Alphabet shares sank at the open on AI profitability concerns. US GDP Adv came in at 3.4%, higher than the expected 3.2% (prev. 2.2%), while weekly claims display an unalarming layoff environment. Meanwhile, the dollar has managed to hold onto modest strength against peers; EUR/USD is little changed following the ECB's expected decision to hold rates, with the Bank refraining from giving forward guidance on the next decision.

Precious metals continue to show weakness, with silver making new YTD lows, while gold trades lower by ~USD 41/oz.

• Alphabet (GOOG): Weak report; profit & rev. light & worsening negative FCF
• Microsoft (MSFT): EPS, rev. & op. income topped w/ better-than-exp. guidance; looks to raise at least USD 25bln from USD bond sale.
• CoreWeave (CRWV), Nebius (NBIS), IREN (IREN): Microsoft's lower-than-exp. capex points to infrastructure partners taking longer to deliver capacity
• Fortinet (FTNT): Product rev. short of exp. w/ FY services guide cut & next Q rev. guide way short of bull exp.
• ServiceNow (NOW): Underwhelming subs. rev. guide w/ a bookings & profit miss
• KLA (KLAC): Headline metrics topped w/ strong next Q guidance
• Cognizant (CTSH): Weak next Q rev. outlook
• T-Mobile US (TMUS): Profit, rev. & postpaid subs. additions beat alongside strong FY guidance
• eBay (EBAY): Solid headline nos. & GMV, alongside upbeat holiday-Q outlook
• Norwegian Cruise Line (NCLH): Top & bottom line beat w/ upbeat FY profit view
• Caterpillar (CAT): Top line shy of exp.
• Mastercard (MA): Q3 results beat
• Eli Lilly (LLY): Headline metrics topped w/ strong drug sales breakdown & lifted FY rev. outlook
• Merck (MRK): Topped Q3 exp. as Keytruda & Gardasil outperformed
• Lumentum (LITE): Marvell (MRVL) in advanced talks to acquire Co.

Sessions of this shape, where a single mega-cap report reprices the whole complex despite healthy breadth, are a recurring feature of cap-weighted indices concentrated in a handful of names; the tell has historically been whether the selling stays confined to the reporting cohort or migrates into the broader tape over subsequent days. The pattern here is the familiar one in which a beat from one mega-cap (Microsoft) fails to offset a miss from another (Alphabet), because index-level positioning treats the group as a single AI-capex factor rather than idiosyncratic stories; episodes of that kind have tended to resolve through factor-level de-grossing before single-name differentiation reasserts itself. The software rout fits an established sequence: guidance misses on subscription and services lines have repeatedly produced outsized one-day moves in high-multiple SaaS names, with worst-day-in-years prints clustering in periods where positioning was crowded and the debate was already shifting from growth to monetisation. The cross-asset signal is notable: Treasuries rallying on soft income and spending alongside an equity growth scare, and the curve bull-flattening on AI profitability questions rather than on a hard data miss, is the classic early-stage risk-rotation pattern rather than a recession trade; a firm dollar holding up while metals make fresh lows despite lower yields points to positioning unwinds in the metals complex rather than a clean real-rate story. The ECB hold without forward guidance is the standard posture for a central bank preserving optionality, and has historically left EUR/USD trading off the transatlantic rate differential and data surprises rather than the decision itself. Worth watching: whether the AI-infrastructure complex (the neocloud and capacity names flagged on Microsoft's capex) stabilises, whether software weakness broadens to adjacent IT services, and whether the Treasury bid persists through the next supply and data calendar or fades as an opening-day flight.