Big-company results pulled U.S. stocks down
In one line, weak results from large companies such as Intel and Amazon, plus AI spending worry, sent U.S. Energy, staples, and utilities rose.
Easy version of the November 2 morning note. It covers the prior Friday U.S. session. This is not investment advice. The oil prices are DK's numbers. In one line, weak results from large companies such as Intel and Amazon, plus AI spending worry, sent U.S. stocks down. Energy, staples, and utilities rose. Those are defensive groups, things people keep buying when the economy shakes.
An index is a score made by putting many stock prices into one basket. DK's close was S&P 500 down ▼ 1.82%, Nasdaq down ▼ 2.86%, Dow down ▼ 1.09%, and Russell 2000 down ▼ 1.60%. The top 10 stocks pulled the S&P 500 down by about 1.2 percentage points, but about 45% of the members rose.
Energy rose ▲ 1.9%, staples 1.4%, utilities 0.7%, health care 0.5%, materials 0.4%, and real estate 0.2%. Semiconductors fell 7.0%, information technology 4.9%, industrials 1.6%, financials 0.8%, discretionary goods 0.7%, and drugs 0.6%.
SanDisk fell ▼ 13.40% even after a strong report, on a Kioxia view that NAND price gains could slow. NAND is a memory chip that stores data. Intel fell 28.98% on a weak next-quarter outlook, soft PC demand, and cash-flow pressure. Micron fell 5.27%. Intel's PC warning spread to AMD, down 10.83%, Arm, down 9.97%, and Qualcomm, down 11.09%. Nvidia fell 4.13%, Broadcom 5.46%, and Marvell 10.04%.
Server-rental names fell after a report that Blackstone thought Anthropic might struggle to get an investment-grade credit rating after a listing. Investment grade means lenders see a reasonable chance of being repaid. CoreWeave fell ▼ 9.57% and Nebius 10.40%. A report also said OpenAI cut this funding-round target from $30 billion to $20 billion.
Amazon fell ▼ 1.37%. AWS revenue rose ▲ 39%, but free cash flow over 12 months was a $42.4 billion deficit. Free cash flow is cash left after capital spending. A deficit means cash was short, not left over. The stock had been down about ▼ 6% early and cut that loss. Microsoft fell 1.50%, Alphabet 1.32%, and Meta 1.51%. Reddit fell 29.29%, Twilio 15.13%, ServiceNow 4.14%, and CrowdStrike 4.10%.
A reported hack of about $6.3 billion at Binance sent bitcoin toward the low $76,000s during the day. The FBI named a North Korean hacking group. That is an allegation, not a proven fact here. Coinbase fell ▼ 10.82%, Strategy 7.86%, and Robinhood 7.23%.
Drugs and biotech were strong. Regeneron jumped 13.29% as revenue rose 36% and adjusted earnings per share beat forecasts. AstraZeneca rose ▲ 7.04%, Gilead 3.16%, Eli Lilly 3.15%, and Merck 2.28%. Walmart rose 1.86%, Costco 1.65%, Coca-Cola 1.37%, and Verizon 2.50%. Exxon Mobil rose 2.16% and Chevron 1.77%. Roblox fell 18.11% on weak next-quarter bookings guidance and worry that child-safety steps could slow use.
DK's oil print rose on the chance of U.S. strikes on Iran after the midterms. WTI rose ▲ 2.08% to $104.12, and Brent rose 2.40% to $117.64. Talk of reopening the strait within two days was not officially confirmed.
Treasury yields fell as technology stocks dropped. The 2-year was 4.592%, the 10-year 4.933%, and the 30-year 5.311%. The dollar fell 0.15%. Gold futures fell 3.29% to about a one-year low. The rate-hike amount priced through December shrank from 0.199 percentage point to 0.176. Logan said at least two more quarter-point hikes were needed, and said core PCE through September was 3.1%. Core PCE is a price gauge with food and energy removed. The third-quarter employment cost index rose ▲ 0.8%, matching the forecast and below the prior 0.9%. The October Chicago PMI was 55.3, below the 56.1 forecast but still above 50. The Bank of Japan held its policy rate at 1.25% by a vote of 8 to 1.
Three lines to keep. Weak large-technology results pulled the indexes down, but about half the stocks rose. Energy, drugs, and staples held up. Gold fell to about a one-year low.
Oil prices are DK's print only.