US EQUITY OPEN: Tech tumbles amid AI fears following disappointing earnings

OPEN: US indices opened lower with the Nasdaq 100 (-2.5%) the notable underperformer following a deluge of disappointing US tech earnings which continue to raise AI concerns. Regarding sectors, Technology is the clear laggard and others mixed, with Staples and Health sitting a top of the breakdown. On the earnings footing, Intel, Amazon, and Sandisk are all hit, to varying degrees after earnings, with the former particularly disappointing as was accompanied by downbeat commentary on the PC environment and weighing on PC names like Dell. Looking to next week, Apple (Mon), AMD and SMCI (Tues) are the earning highlights. The Dollar Index is slightly softer, with EUR the G10 underperforming, and the Yen gaining, supported by risk-off sentiment and also while the BoJ left rates unchanged as expected, there was one dissent for a hike and Governor Ueda left the door open for a hike in December. On month-end, Barclays notes their rebalancing model shows weak USD buying against most majors, and no directional bias against the EUR and JPY. WTI and Brent are firmer by c. USD 2/bbl after rebounding overnight as headlines continued to highlight a potential resumption of strikes on Iran after the midterm elections. Precious metals are lower, with spot silver seeing steep losses of c. 5% and fell beneath USD 50/oz. Treasuries are firmer across the curve. In terms of the day ahead, we await the Fed dissent speeches from Cook and Hammack, while Barkin (2027 voter) said the direction of travel for monetary policy is straightforward, but the question is the pace.

• Intel (INTC): Rev. & FCF light w/ dismal next Q view, driven by prolonged PC market weakness & memory shortages.
• Sandisk (SNDK): Weaker-than-exp. op. cash flow & investor concerns over the sustainability of AI spending outweighed solid earnings, guidance & stock split.
• Amazon (AMZN): Top & bottom line missed as did net income w/ higher-than-exp. AI infra spending & deteriorating FCF.
• DXC Technology (DXC): Weak outlook & mgmt. warned of a prolonged recovery in its core business.
• Roblox (RBLX): Rev. short, light Q4 bookings view & declining user engagement following stricter child-safety measures.
• Pinterest (PINS): EPS & rev. short as was Q4 outlook.
• Reddit (RDDT): Q4 outlook short.
• Mondelez International (MDLZ): EPS beat.
• General Dynamics (GD): Top & bottom line surpassed Wall St. exp.
• Stryker (SYK): EPS & rev. missed w/ weak FY profit outlook.

Sessions of this kind, where a cluster of mega-cap tech prints disappoints simultaneously, have tended to produce concentrated Nasdaq underperformance with defensives atop the sector table, and the established pattern is that breadth and rotation, rather than the index-level move, tell the more durable story. The common thread in the prints matters more than any single miss: heavier AI infrastructure spending alongside deteriorating free cash flow echoes prior episodes in which the market's focus shifted from AI revenue promise to AI capex payback, a framing that historically punishes the spenders first and asks questions of the suppliers next. The PC weakness flagged in the semiconductor prints transmits through the hardware peer set and into memory, a channel that has repeated in past downcycles. The follow-ons that have mattered in comparable sequences are the remaining mega-cap and AI-hardware reports on next week's calendar, which determine whether this is idiosyncratic or thematic, and whether the risk-off bid in Treasuries and the yen persists beyond the session. The BoJ dissent and December hike language fits a familiar pattern in which yen strength compounds equity de-risking on the day. Month-end rebalancing flows add a mechanical overlay that has historically muddied the FX read rather than reversed it.