Midday Fly By: Microsoft, Nvidia invest in Anthropic

The major averages were sharply lower near noon as investors digest a growing hang-up in the tech and AI sector and re-evaluate the likelihood of an upcoming policy shift from the Federal Reserve. Sentiment has turned cautious after major indexes broke key technical levels with one of the central themes being the hand-off between hope and reality in the AI hype cycle.

Shares of leading AI and chip-related companies have remained under pressure amid concerns that their elevated valuations may no longer be as safe from disappointment as before. Even new investments in Anthropic from Microsoft and Nvidia have failed to make much of a difference, as both stocks are in the red. Other tech giants, including Amazon and Apple, are also trading lower.

The upcoming quarterly results for Nvidia are being treated as a watershed moment for the broader tech rally. Additionally, commentary from tech executives warning that no company is immune if the AI boom stumbles has added to the anxiety.

Looking to commodities, gold prices were lower near noon, with the “safe haven” asset struggling to get past the $4,100 mark. Oil prices are also down ahead of this afternoon’s API crude numbers.

Get caught up quickly on the top news and calls moving stocks with these five Top Five lists.

1. STOCK NEWS:

• Home Depot (HD) reported mixed Q3 results and lowered its FY25 earnings guidance
• Cloudflare’s (NET) global network experienced issues Tuesday morning, though the company has said that it believes the incident is “now resolved”
• Microsoft (MSFT) and Nvidia (NVDA) will invest up to $15B in total in Anthropic as part of new partnerships
• AkzoNobel (AKZOY) and Axalta Coating (AXTA) agreed to combine in an all-stock merger
• President Trump said in a post on Truth Social that health insurance companies have(GOOGL) upgraded to Buy from Hold at Loop Capital
• Microsoft (MSFT) downgraded to Neutral from Buy at Rothschild & Co Redburn
• Rothschild & Co Redburn also downgraded Amazon (AMZN) to Neutral
• Honeywell (HON) double downgraded to Underperform at BofA
• Stifel upgraded Deckers Outdoor (DECK) to Buy

3. AROUND THE WEB:

• Netflix (NFLX), Comcast (CMCSA), and Paramount (PSKY) are each preparing arguments as to why it is the best company to purchase Warner Bros. Discovery (WBD), NY Times reports
• HSBC’s (HSBC) board of directors is struggling to agree on who should move forward as a candidate to become its next chair as the lender aims to find a worthwhile successor for Mark Tucker following his surprise departure, FT says
• Apple (AAPL) captured a quarter of China’s smartphone sales in October, with iPhone sales surging 37% year over year thanks to strong demand for the iPhone 17 lineup, Reuters reports
• Honda (HMC) plans to start gradually resuming normal operations at its North American vehicle assembly plants beginning Monday, a signal that production disruptions from a shortage of Nexperia chips are easing, Reuters reports
• ExxonMobil (XOM) plans to close a chemicals plant in Scotland and lay off 200 employees due to difficult market conditions and the policy environment in the U.K., FT reports

4. MOVERS:

• Ondas (ONDS) increases after completing its acquisition of Sentrycs
• Sable Offshore (SOC) gains after disputing “misstatements” in Hunterbrook Media report
• iQiyi (IQ), Amer Sports (AS) and James Hardie (JHX) higher in New York after reporting quarterly results
• Invivyd (IVVD) lower after announcing a 44M share offering
• Energizer (ENR) and Klarna (KLAR) higher in New York after reporting quarterly results

5. EARNINGS/GUIDANCE:

• Weibo (WB) reported Q3 results, with CEO Gaofei Wang commenting, “We are pleased with our progress made in our intelligent search front”
• Baidu (BIDU) reported Q3 results, with EPS and revenue lower year-over-year
• Elbit Systems (ESLT) reported Q3 results, with EPS beating consensus
• Onar (ONAR) reported Q3 results and provided guidance for Q4
• Sealsq (LAES) reaffirmed FY25 guidance and provided its outlook for FY26

INDEXES:

Near midday, the Dow was down 0.93%, or 431.96, to 46,158.28, the Nasdaq was down 0.96%, or 217.61, to 22,490.46, and the S&P 500 was down 0.64%, or 42.95, to 6,629.46.