US EQUITY OPEN: Stocks mixed at the open as AI stock rout continues

US EQUITY OPEN: Stocks opened mixed on Friday, with further pressure on the Nasdaq as the AI rout continued. The Semiconductor ETF (SMH) fell 1.8% and the Memory ETF (DRAM) declined 3% at the open. The S&P 500 and Russell 2000 were little changed, while the Dow gained and the equal-weight S&P 500 outperformed, as weakness in AI and technology stocks continued to weigh on the broader indices. Overnight, reports suggested some investors had lowered their valuation expectations for Anthropic to USD 1.5tln from USD 2tln following disappointing revenue figures.

Most sectors opened higher, led by Materials, Financials, Consumer Staples and Energy, while Technology and Communication Services lagged.

Crude prices were mixed and choppy amid ongoing geopolitical developments. Overnight, Trump said he was not considering using nuclear weapons against Iran, although he threatened to strike Pickaxe Mountain. Meanwhile, further reports emerged of tankers being set ablaze while transiting the Strait of Hormuz. Elsewhere, Saudi-Houthi tensions remained elevated after the Houthis struck Saudi Arabia's Yanbu port.

The Treasury yield curve steepened, with front-end yields declining after Fed Chair Warsh continued to refrain from providing explicit forward guidance. Some participants interpreted his remarks as suggesting he was comfortable with current market pricing for an October pause, despite the hotter-than-expected CPI and PPI reports. Meanwhile, US economic data was mixed, with Import and Export Prices exceeding forecasts, while the NY Fed Services Activity survey deteriorated further into negative territory. Industrial Production also beat expectations, although Manufacturing Production was in line with forecasts.

In FX, the Dollar weakened following Warsh's remarks, while antipodean and other risk-sensitive currencies outperformed.

• Tesla (TSLA): Revealed its Roadster can accelerate from 0-60mph in under one second and use thrusters to land after a ramp jump, with production set for 2028
• Netflix (NFLX): Chief Content Officer to leave
• Varonis Systems (VRNS): To be acquired by Proofpoint for USD 49.75/shr
• Alcoa (AA): Earnings beat expectations
• Travelers Companies (TRV): Earnings beat expectations, although Personal Insurance declined, with net premiums written above expectations
• Strategy (MSTR): MSCI's new rules could reportedly see Strategy removed from its indexes
• Workday (WDAY): Downgraded at KeyBanc to 'Sector Weight' from 'Overweight'
• EchoStar (ECHO): Upgraded at JPMorgan to 'Overweight' from 'Underweight'