Overnight Developments
Alphabet falls 10% in premarket, on course for its biggest-ever post-earnings drop — CNBC
Alphabet posted its first top-and-bottom-line miss in nearly four years. Revenue still grew 25%, but EPS fell to $2.12 from $2.87 a year ago. Free cash flow was negative $9.07 billion, against the -$2.70 billion analysts expected. Capex of $51.36 billion actually came in below the $55.09 billion estimate. Alphabet kept its 2026 capex guide at $195–205 billion and told analysts it expects capex to “increase significantly in 2027.” CNBC puts 2027 above $300 billion. If GOOGL closes more than 9.77% lower today, it will be the stock’s worst post-earnings reaction since its 2004 IPO. GOOG is -10.1% pre-market on our prints, which accounts for most of the drag on NASDAQ futures. Affected sectors: Tech, Communication Services, AI Infrastructure
Microsoft beats on 48% Azure growth, but its lighter capex hits the neoclouds — CNBC
Microsoft went the other way. Revenue grew 19%, Azure grew 48%, and the company guided Azure to 49–50% growth next quarter, against a 45.1% consensus. Capex and finance leases were $45.2 billion, below the $50.67 billion estimate, because some third-party capacity deliveries slipped. That shortfall knocked CoreWeave and Nebius almost 5% after hours, since Microsoft is a top customer of both. MSFT is +2.5% and CRWV -5.6% pre-market on our prints. Alphabet and Microsoft are being priced on free cash flow, not on their AI spending plans. Affected sectors: Tech, Cloud, Neoclouds
Lagarde to step down as ECB president in February, ahead of today’s rate decision — CNBC
Christine Lagarde will leave on Feb. 7, nearly nine months before her term ends in October 2027. She announced it this morning, ahead of an ECB decision at which a hold is expected, even though euro-zone inflation hit a three-year high in September. EUR/USD is little changed, +0.2%. This comes the day after the Fed held rates with two dissents in favor of a hike, and the 10-year closed Wednesday at 5.05%. Affected sectors: Banks, FX, European equities
Pentagon’s top planner reportedly fired as U.S. warns of renewed Iran strikes after the midterms — CNBC
The AP reports that U.S. officials have told some Middle East countries to prepare for possible renewed military action against Iran after next week’s midterms. Separately, Defense Secretary Hegseth removed Lt. Gen. Brett Sylvia as the Joint Staff’s head of strategy, plans and policy. Tehran says it is still pursuing its “7-Day Plan” to reopen the Strait of Hormuz. Oil eased anyway: December WTI is -1.4% at $101.37 and January Brent -1.3% at $110.19. Affected sectors: Energy, Defense, Airlines
Futures & Pre-Market
| Index | Futures | Change |
|---|---|---|
| S&P 500 | 7,765.75 | -0.2% |
| NASDAQ | 29,705.00 | -0.9% |
| DOW | 52,629.00 | -0.1% |
Futures are as of 06:50 ET, compared with Wednesday’s daily futures bar. The ETF proxies agree: SPY is -0.17%, QQQ -0.86% and DIA -0.10% against Wednesday’s close. On Wednesday the S&P 500 rose 0.28% to 7,743.98.
Watchlist Movers
Pre-market prints as of ~07:00 ET, compared with Wednesday’s close.
- GOOG -10.1% pre-market ($289.42 vs. $321.89) — the Q3 miss and negative free cash flow above
- INTC -3.3% — no company-specific headline found
- TEM -2.4%, OKLO -2.3%, CRCL -2.3%, SMCI -2.2%, MSTR -2.1%, TSM -1.9%, RKLB -1.8%: a broad risk-off move in AI and speculative names. Bitcoin is -1.4% near $80,150.
- UNH +1.5%, COST +1.4% (last print 05:27), NKE +1.4%, AAPL +1.3%, PFE +1.2%. Defensives are firm, and pharma has a tailwind from Eli Lilly’s beat-and-raise (LLY +4.1%) and Merck’s raised outlook (MRK +2.1%).
- NNE has no pre-market print.
International Markets
Asia was split. The Nikkei rose +1.1% to 64,659, while the Hang Seng fell -0.6% and Shanghai -0.8%. Europe is higher, with FTSE +0.3% and DAX +0.8%, and is shrugging off the Lagarde news ahead of the ECB decision.
What to Watch at Open
Alphabet is down 10% pre-market after a messy quarter with negative free cash flow, while Microsoft is up on 48% Azure growth, so watch whether the selling stays inside Alphabet or spreads to AI infrastructure names. The ECB decides today on the morning Lagarde announced her early exit. A DoorDash–Instacart deal could be announced as early as this morning.
This alert is for informational purposes only and does not constitute financial advice.