(Bloomberg) -- Stocks are under pressure as a fresh escalation in Middle East tensions sent oil surging, reviving inflation and growth concerns just as investors digested another heavy round of earnings.
S&P 500 futures fell 1.1%, while Nasdaq 100 contracts dropped 1.9% as of 5:25 a.m. in New York. WTI touched $100, and Brent crude climbed to its highest since May, after deadly attacks in Saudi Arabia and reports that the US and Israel are drawing up plans for renewed strikes on Iran.
The tech-heavy Nasdaq 100 is poised to test its converging 50 and 100-day moving averages, a narrowing technical corridor that has become the battleground for bulls and bears after this month's selloff.
The geopolitical risk premium is building after the US ordered some diplomats and their families to leave Saudi Arabia amid renewed Houthi attacks, including strikes on an Aramco facility and an airport in the east of the country, with Tehran saying it targeted more tankers transiting the Strait of Hormuz.
Earnings are adding another layer of volatility. Meta initially traded higher after hours following a solid quarter, where CEO Mark Zuckerberg said Muse could eventually generate more revenue per user than its existing US apps, but is lower pre-market. Tesla fell despite stronger FSD adoption, with elevated operating expenses underscoring the cost of its AI, robotics and autonomy push. Lam Research slid as much as 9% after weaker-than-expected guidance, weighing on the broader chip-equipment complex.
The anxiety around AI financing may be running ahead of the numbers, according to JPMorgan strategists led by Nikolaos Panigirtzoglou. They note that publicly listed neoclouds remain a relatively small part of the overall AI ecosystem: of the roughly $2.2 trillion in cash flow and $1.8 trillion in capex analysts project for listed global tech companies in 2026, neoclouds account for just $30 billion and $80 billion, respectively.
The pressure builds further out. JPMorgan estimates the sector's financing gap after dividends and buybacks will widen from roughly $500 billion in 2026 to almost $1.3 trillion by 2030, increasingly pushing companies toward bonds, private credit and other forms of debt. That comes as the bank's positioning indicators show investors have already cut equity exposure substantially from September's peak, suggesting some of the froth has already come out of the market.
In politics, protests in France largely died down after authorities rolled out tougher security measures, including targeted curfews, following cost-of-living protests over the weekend that descended into violence, vandalism and looting. The yield on benchmark French debt had hit 5% for the first time since 2002 as rising energy prices exacerbated concern over the country's fiscal outlook.
In deals, EQT has agreed to acquire Qiagen for around €9.6 billion ($10.8 billion), bringing an end to years of takeover speculation involving the European molecular testing company.
In corporate news:
- Barclays to Cut 5,000 Jobs in AI-Fueled Push to Lower Costs
- Pantheon Raises $6 Billion in Its Biggest PE Secondaries Haul
- Comcast Planning Significant Jobs Cuts as Part of Reorganization
- DeepSeek Raises $15 Billion in Challenge to Leading US Labs
- Robinhood to Launch Investing Platform in Middle East From Dubai
Earnings: About 22% of S&P 500 market cap has reported so far, with 80% of companies beating analyst earnings forecasts and 13% missing. On sales, 54% have topped expectations, while 22% have fallen short.
Procter & Gamble, Union Pacific and Honeywell are among the key companies due before the bell, offering reads across consumer demand and the industrial economy, while Blackstone, Lockheed Martin, Comcast and Valero also report. After the close, focus shifts to Western Digital and Bloom Energy for read-throughs on AI infrastructure, alongside Newmont and Deckers.
BI notes that a rerating in Procter & Gamble's multiple hinges on building trust that it can achieve 3% organic-sales growth, which “appears tough in the medium term without more execution fixes.” The Iran war, the team flags, “compounds demand uncertainty and raises costs.”
Equity Insights
Outflows from institutional clients month-to-date are already larger than any other October on record, according to Bank of America strategist Jill Carey Hall.
Sectors in focus:
- Lam Research dropped after the semiconductor capital equipment company gave a forecast for adjusted second-quarter earnings that was slightly weaker than expected at the midpoint of the range. Peers Applied Materials, KLA Corp. and Ultra Clean all fell more than 4%.
US Premarket Movers of Note:
- TSLA US (-5.2%): Tesla Falls as Spending Cut Offsets FSD Optimism: Street Wrap
- META US (-1.5%): Meta Muted Even After Results Beat, Muse Impresses: Street Wrap
- LRCX US (-8.7%): Lam Research Falls and Weighs on Peers After Earnings Guide
- IBM US (-5.2%): IBM Posts 5% Sales Growth, Says Infrastructure Deals Came Back
- CSX US (+2.4%): CSX 3Q EPS Beats Estimates
- SCCO US (-3.6%): Southern Copper Shares Fall as 3Q Copper Production Declines
- ROL US (-6.3%): Rollins Shares Drop After 3Q Revenue Misses Estimates
ECM:
- Nvidia CEO Jensen Huang said he told UK-based neocloud Nscale to “work around the clock” to overcome challenges in bringing some of its data centers online.
- Investors will become more selective in the near future when it comes to initial public offerings, as rising concern about the spending on the artificial intelligence expansion — particularly data center funding — ripples across the market, according to Citigroup's co-head of global equity capital markets.
- Arcus Biosciences is seeking to raise $250 million from a share sale, according to people familiar with the matter.
Macro:
- Treasuries rose along with the yen and Swiss franc as investors sought shelter in havens after stocks stumbled on renewed concerns about the artificial intelligence trade.
- Norway's $2.3 trillion sovereign wealth fund lost 0.5% in the third quarter, dragged down by its fixed-income investments.
Europe/Asia:
Europe Trading: European stocks followed global peers lower as mixed results from US tech firms revived concerns about the artificial intelligence trade. Hermès International SCA shares slumped after its sales in the
Asia-Pacific region disappointed.
Asia Trading: Asian stocks fell toward a three-month low as oil prices rose and forecasts from some US technology firms raised fresh questions about the sustainability of the sector's rally. Chinese stocks were dragged into a bear market, with $2.4 trillion lost since a peak in May.
Other Company News:
- Tesla, Nvidia to Invest $2.8b in Samsung Mechanics Plants: Maeil
- SoftBank Market Value Halves From Peak as AI Fears Grow
- Europe Should Accept Reliance on US Tech, Palantir's Mosley Says
- Denmark to Buy Norwegian-US Missiles, TV2 Says
- BWX Technologies Plans to Invest $1.5b in Poland: BIP
- LG Innotek To Build Physical AI Sensing Solutions with Nvidia
Main Rating Changes:
Upgrades:
- IONS US: Ionis Pharma Raised to Outperform at BMO
- OHI US: Omega Healthcare Raised to Market Outperform at Citizens; PT $52
Downgrades:
- BLDR US: Builders FirstSource Cut to Market Perform at William Blair
- QGEN US: Qiagen Cut to Neutral at JPMorgan; PT $52
Initiations:
- LNT US: Alliant Energy Rated New Hold at HSBC; PT $69.50
- AEE US: Ameren Rated New Buy at HSBC; PT $119.10 Rated New Hold at TD Cowen; PT $114
- AEP US: American Electric Power Rated New Buy at HSBC; PT $145.90
- CNP US: CenterPoint Energy Rated New Buy at HSBC; PT $44
- CMS US: CMS Energy Rated New Hold at HSBC; PT $69
- ED US: Con Edison Rated New Hold at HSBC; PT $104
- CEG US: Constellation Energy Rated New Buy at HSBC; PT $335
- DTE US: DTE Energy Rated New Hold at HSBC; PT $135
- DUK US: Duke Energy Rated New Hold at HSBC; PT $123
- EIX US: Edison International Rated New Hold at HSBC; PT $56.50
- ETR US: Entergy Rated New Buy at HSBC; PT $123.50
- EVRG US: Evergy Rated New Buy at HSBC; PT $92 Rated New Buy at TD Cowen; PT $95
- ES US: Eversource Rated New Hold at HSBC; PT $70
- EXC US: Exelon Rated New Hold at HSBC; PT $44
- FE US: FirstEnergy Rated New Buy at HSBC; PT $50
- KARD US: Kardigan Rated New Outperform at Baird; PT $43
- MET US: MetLife Rated New Buy at William O'Neil
- NI US: NiSource Rated New Buy at HSBC; PT $49.50
- NWN US: Northwest Natural Rated New Neutral at Mizuho Securities; PT $51
- NRG US: NRG Energy Rated New Buy at HSBC; PT $179
- PCG US: PG&E Rated New Buy at HSBC; PT $15.50
- PNW US: Pinnacle West Capital Rated New Buy at HSBC; PT $119.50
- PPL US: PPL Rated New Buy at HSBC; PT $42
- PEG US: PSEG Rated New Hold at HSBC; PT $72.50
- SRE US: Sempra Rated New Buy at HSBC; PT $97.50
- SO US: Southern Co. Rated New Buy at HSBC; PT $99.50
- TLN US: Talen Energy Rated New Buy at HSBC; PT $444.30
- VST US: Vistra Corp Rated New Buy at HSBC; PT $190
- WEC US: WEC Energy Rated New Hold at HSBC; PT $106.50
- XEL US: Xcel Energy Rated New Buy at HSBC; PT $89
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Disclosures for Think Equity Morning Brief, January 30, 2026
Sources: Bloomberg LP; The Wall Street Journal
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