Microsoft's first U.S. bond sale since 2017 drew one of the deepest order books on record for a U.S. company. Quanta rose after raising its forecast, while Caterpillar fell after holding its own. DoorDash agreed to buy Instacart, and Kalshi nearly doubled its value.
Alphabet Dragged the Nasdaq Lower. Small Caps Rose.
The Nasdaq Composite fell 1.4% on Thursday, and the S&P 500 and the Dow each slipped 0.3%. The Russell 2000 rose 1.0%. Alphabet (GOOGL) fell 12.6%, erasing about $500 billion of market value. Amazon (AMZN) fell 4.2% before its results. It missed revenue and profit forecasts after the close and fell further in late trading.
The economy grew at a 3.4% annual rate in the third quarter, up from 2.2% and above forecasts. Equipment led by computers was a main driver. The Fed's preferred price gauge rose 3.6% from a year earlier, and 3.1% excluding food and energy. Both matched forecasts. Spending after inflation stalled in September.
The 10-year Treasury yield fell to 4.99%. The European Central Bank held its deposit rate at 2.5%. Bitcoin traded near $80,500.
Investor Signal
The report kept a December Fed hike in play without adding pressure. Futures priced about an 85% chance before the release. Strong growth and 3.1% core inflation support a hike. Stalled consumer spending weakens the urgency. Friday's employment cost index is the next read on wages.
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Microsoft Drew About $115 Billion of Orders for Its First Bond Sale Since 2017
Microsoft (MSFT) is selling at least $25 billion of bonds, its first U.S. investment-grade sale since 2017. The deal has up to 10 parts, with maturities of up to 40 years. Proceeds can fund capital spending, and the bonds settle on Nov. 4.
Orders peaked near $115 billion, about 4.6 times the deal's size, Bloomberg reported.
Microsoft is not borrowing out of need. It generated $18.6 billion of free cash flow last quarter. Alphabet's free cash flow was negative $9.1 billion. It raised about $28.7 billion from bonds and $12.4 billion from share sales in the quarter.
By accounts of her briefing, the ECB's Christine Lagarde partly tied higher yields to cloud borrowing.
Investor Signal
The order book shows a top-rated borrower can still fund the AI build-out cheaply. The pressure point is supply. More of the spending is moving into long-dated bonds. Microsoft's bonds settle the day Treasury announces its quarterly refunding.
Caterpillar and Quanta Both Reported Record Backlogs. Only Quanta Raised Its Forecast.
Caterpillar (CAT) earned an adjusted $7.20 a share, up from $4.95 a year earlier and above estimates. Sales rose 17% to $20.7 billion. It kept its 2026 outlook unchanged, and the shares fell 9.3%.
Quanta Services (PWR), which builds power lines and grid links, grew revenue 57% to $12.01 billion. Its backlog hit a record $63.7 billion, and it raised every 2026 target. The shares rose 4.7%.
Investor Signal
Both companies sell into the build-out that Microsoft's bonds help pay for. The clearest difference was the forecast, not the order book. Quanta's backlog is more than five times its quarterly revenue, and it raised its targets. Caterpillar held its outlook while analysts expected faster growth. Its 2027 outlook in January is the next test.
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DoorDash Bid $65 for Instacart. Apollo's Funds Are Financing All of ADT's Buyout.
DoorDash (DASH) agreed to buy Instacart (CART) for $65 a share, about $17 billion of equity. At least 75% is cash. The companies expect to close at the end of 2027 or in the first half of 2028. DoorDash owes Instacart $1.25 billion if antitrust approval fails.
Instacart closed at $57.11, a spread of about 14% to the cash price. DoorDash, which also reported results, rose 5.6%.
ADT (ADT) agreed to be bought by Thrive Holdings for $10 a share in cash. That is about $7.6 billion of equity and $15.3 billion including debt. Funds managed by affiliates of Apollo (APO) are providing all of the financing. ADT rose 33% to $9.88, about 1% below the offer, though it can seek other bids until Nov. 28.
Investor Signal
The two spreads price very different risks. Instacart's prices up to two years of antitrust review, roughly 12% a year if the deal closes at the end of 2027. ADT's leaves almost nothing for a rival bid. One firm's funds committing all of ADT's financing suggests private credit has money to deploy. A regulatory request for more information would move Instacart's spread first.
Lilly Sold 53% More Medicine at 15% Lower Prices. Sales Rose 39%.
Eli Lilly (LLY) said revenue rose 39% to $24.4 billion, well above the roughly $22.6 billion expected. Volume rose 53%, and realized prices fell 15%.
Lilly raised its 2026 revenue forecast to $91 billion to $92 billion, from $85 billion to $87 billion. About $900 million of the quarter's revenue was one-time.
Its adjusted profit forecast fell 50 cents at the midpoint, to $35 to $36 a share. A $4.57-a-share charge for buying drug candidates more than offset a $4.07 underlying gain. The shares rose 6.5%.
Investor Signal
Lilly's growth now comes from selling far more doses at lower prices. That makes factory capacity, not pricing power, the main limit. Investors sold AI's biggest spenders Thursday and paid up for demand already showing in sales. Fourth-quarter pricing and supply will show whether volume can keep outrunning the price cuts.
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Kalshi Nearly Doubled Its Value in Five Months. The NYSE's Owner Is Bringing Crypto-Style Futures Onshore.
Kalshi raised $1 billion at a $40 billion valuation, up from $22 billion in May. It was announced a day after Utah filed criminal charges against the company and its co-founders. No one has been convicted. The company said the round closed the week before. The federal government and the Commodity Futures Trading Commission sued Utah earlier this week.
Intercontinental Exchange (ICE) owns the New York Stock Exchange. It signed a deal to run a regulated U.S. market for Trade[XYZ]'s perpetual futures. Those futures run on the Hyperliquid blockchain.
They never expire and are crypto's most heavily traded product, mostly offered outside the U.S. The plan needs regulatory approval and has no launch date. ICE, which also reported its best third quarter on record, rose 4.5%. Hyperliquid's token, HYPE, was up about 16% in the afternoon.
Investor Signal
Kalshi's price shows investors paying up for a regulated U.S. venue, and ICE is building one. Both bets depend on Washington. Kalshi needs federal law to override state gambling rules, and ICE needs approval from the futures regulator. Rulings in the federal suit against Utah and any filing from ICE are the next tests.
Thursday sorted money by how certain the cash looked. A top-rated borrower drew a deep crowd of bond buyers. The grid builder that raised its forecast rose, and so did the drugmaker selling far more doses. Investors sold the AI spender burning cash and the machine maker that held its outlook.
Amazon, the largest cloud company, missed forecasts after the close, and its shares fell further in late trading.
Rates Just Reset. Who Feels It First?
On January 2, the 10-year yielded 4.19%. By September 30, 5.29% — most of it in one quarter.
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