US EQUITY OPEN: Mag-7 earnings lead Tech and Indices lower as the Middle East situation remains fragile

OPEN: US indices open in the red with the mega-cap sectors lagging and weighed on by weakness in Meta and Tesla following their earnings (more below) which leads the AI trade lower. To the upside, the defensive-natured Consumer Staples and Health sit. Given the risk-off trade, WTI and Brent are surging, with precious metals lower, as the Middle East situation continues to remain very fragile as the latest updates include the IRGC Navy stating four vessels transferring oil cargoes were struck in the Persian Gulf, while three other vessels hit sea mines yesterday west of the Strait of Hormuz, warning that US efforts to encourage passage could result in strikes on US bases. Meanwhile, Saudi Aramco has reportedly instructed staff to evacuate its Dhahran headquarters and work from home. Treasury yields are notably lower across the curve as they see a haven bid, and remain resilient to the current energy landscape. Out of the US, initial jobless claims continue to hover around 200k, indicating the low hire-low fire US economy. Ahead, the calendar is pretty light, in terms of scheduled risk events, with US 5yr TIPS auction and earnings from WDC and BE the highlights after-hours. STOCK SPECIFICS: Meta Platforms (META): Earnings beat, raised FY capex to the high end; FY27 outlook limited. Tesla (TSLA): Cautious outlook for Optimus, delayed robotaxi revenue, and high expected chipmaking costs overshadowed EPS beat. IBM (IBM): GM declined w/ consulting rev. flat. Lam Research (LRCX): Guidance underwhelmed some expectations. Blackstone (BX): Revenue missed. Procter & Gamble (PG): Earnings beat. Comcast (CMCSA): Adj. EPS & rev. beat. SAP (SAP): Cloud revenue and backlog growth beat expectations. Alibaba (BABA), PDD Holdings (PDD), JD.com (JD): Chinese regulators reportedly summoned major e-commerce platforms over product quality.