The Morning Brief
Futures point to a cautious open after Thursday's megacap tech rout left the Nasdaq nursing its worst drawdown in months, and overnight headlines from Europe and Asia do little to settle nerves.
Overnight:
Geopolitical static dominates the foreign tape rather than relief. Russia's government placed Japan Tobacco's (2914) local unit under temporary administration, the latest seizure of foreign assets inside the country and a reminder the geopolitical risk premium hasn't faded. In telecom, a report surfaced that Elon Musk's SpaceX is angling to challenge AT&T (T) and T-Mobile (TMUS) head-on, with both carriers reportedly holding leverage to cut off SpaceX's Boost Mobile arrangement, a dynamic to watch as EchoStar (ECHO) reports before the bell. London's tape is thick with routine corporate paperwork, but Chesnara's twin moves to acquire MetLife's UK closed-book portfolio and Scottish Widows Europe stand out, consolidation in European life insurance. Fitch affirmed ratings at NatWest (NWG) and Standard Chartered (STAN), and Honda (HMC) is due to report ahead of the US open.
The tech reckoning:
The real story is the carryover from Thursday's session. The S&P proxy (SPY) fell 4.3%, the Nasdaq-100 proxy (QQQ) dropped 6.3%, and small caps (IWM) lost 4.6%, broad, indiscriminate selling rather than a narrow rotation. Microsoft (MSFT) slid 3.6%, Meta (META) 3.9%, and Alphabet (GOOGL) better than 2%, the AI-capex cohort bearing the brunt. Into that selloff, Dan Ives dropped a notable counter-read overnight: he forecasts a 25% drop in capital raises for Microsoft, Meta, Alphabet and Amazon as 2027 marks peak capex, setting up what he calls a "massive" free cash flow ramp by 2029. Traders will spend today deciding whether that's a credible buy-the-dip thesis or wishful framing of a spending binge the market is actively repricing. Adding to the regulatory overhang, Google, Meta and TikTok sued California overnight over Governor Newsom's law restricting addictive social-media features for kids, one more legal front for the platform names to manage.
Flight to safety:
Gold (GLD) added 0.8% and Treasuries (TLT) ticked up while high yield (HYG) softened, the classic risk-off rotation. Oil (USO) rose 1.9%, bucking the broader risk-off tone.
On the radar today:
A packed earnings slate includes Moderna (MRNA), Charter Communications (CHTR), Humana (HUM), Oklo (OKLO), Vistra (VST), Franklin Templeton (BEN), Enbridge (ENB), Brookfield Asset Management (BAM), Under Armour (UA), TeraWulf (WULF), and Trump Media (DJT). Watch Vistra and Oklo closely given the AI power-demand thread, and TeraWulf as crypto-adjacent miners trade with risk sentiment.
Bottom line: Thursday's tech-led rout has reset the tape heading into Friday, and today's open hinges on whether dip buyers trust Ives's capex-peak thesis or the market keeps pricing an AI spending hangover.