Microsoft sought at least $25 billion of bonds as Alphabet fell nearly 13%. Apollo alone committed the financing for ADT's buyout.
Growth beat forecasts, inflation matched them, and AI stocks carried the selling.
The economy grew at a 3.4% annualized pace in the third quarter. September PCE prices rose 3.6% from a year earlier and core prices 3.1%, both in line with forecasts. The S&P 500 fell 0.3% and the Nasdaq Composite 1.4%, while the Russell 2000 rose 1%. The 10-year Treasury yield slipped back below 5%. The ECB held at 2.5%, and Christine Lagarde will leave in February. U.S. crude recovered most of a morning drop. Bitcoin was near $80,500.
Small caps rose.
The Nasdaq fell.
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The AI build-out moved into the bond market as Alphabet's stock fell.
Microsoft is seeking at least $25 billion in its first U.S. investment-grade bond sale since 2017. Orders peaked at $115 billion, 4.6 times the offering's size, Bloomberg reported, citing people familiar with the matter. The longest of up to 10 parts is due in 2066. Microsoft (MSFT) produced $18.6 billion of free cash flow last quarter, so it is choosing to borrow.
The AI trade split in two on Thursday. Alphabet (GOOGL) was indicated about 10% lower before the open and closed down nearly 13%. Revenue of $127.6 billion missed the $128.2 billion analysts expected, according to LSEG. Advertising was about $1.4 billion short. Free cash flow was negative. KLA (KLAC), which makes chipmaking tools, rose about 5%. Grid and power equipment makers also rose. Amazon fell about 4% ahead of its report.
The Build-Out Goes to the Bond Market
More of the build-out is now paid for with borrowed money, and lenders are eager to supply it. Alphabet missed on revenue, burned cash and was sold. Microsoft has the cash, is borrowing anyway and drew orders 4.6 times the deal's size. Suppliers with booked orders rose. Final pricing on Microsoft's deal and Amazon's spending figures come next.
One lender committed all the financing for a large buyout, and Ares invested less than a year earlier.
ADT agreed to a $10 cash buyout and can shop itself for a month. Thrive Holdings, formed by Thrive Capital, values ADT at $15.3 billion including debt. Financing commitments came solely from funds managed by affiliates of Apollo (APO). ADT closed about 1% below the offer.
Blue Owl had a record quarter with institutions. Institutions committed $8.3 billion. Redemption requests at its main non-traded credit fund fell for a second quarter. Ares Management (ARES) took in $31 billion of gross commitments. It deployed $34.8 billion, down from $41.7 billion a year earlier.
Money Waiting for Deals
Fundraising stayed strong while deployment slowed. Ares invested about 17% less than a year earlier. A take-private financed by a single manager is the kind of deal that puts that money to work. ADT's narrow spread suggests holders see little chance of a rival bid. Apollo's results on Nov. 3 and the Nov. 28 go-shop deadline come next.
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Forecasts, not backlogs or quarterly beats, appeared to set the prices.
ServiceNow's drop deepened once regular trading began. ServiceNow (NOW) fell 27%, erasing more than $40 billion of market value. It expects growth in contracted revenue due over the next year to slow to 18.5% this quarter. Its subscription forecast of 22.5% to 23% growth is faster than the 21% it just reported. Fortinet cut its service revenue forecast and fell about 20%.
Caterpillar and Quanta both reported record backlogs, and only one raised its forecast. Caterpillar (CAT) beat on profit, kept its 2026 sales outlook and fell about 9%. Quanta Services (PWR) grew revenue 57%, raised every 2026 target and rose about 5%.
The Forecast Was the Verdict
ServiceNow's revenue met forecasts and its subscription outlook sped up. It still lost more than a quarter of its value after forecasting slower growth in one measure. Caterpillar beat and fell after holding its outlook, while Quanta raised everything and rose. On Thursday the forward line appeared to set the price. Amazon's guidance is the next test.
Contract rules explained more than the news did.
Israel's count is finished and no bloc moved. Netanyahu's bloc has 53 seats, the opposition 48 and Arab parties 19. Kalshi's Netanyahu contract fell to about 22 cents from 29 cents before the count finished, after a few large sales. Polymarket's was near 44.5 cents. Polymarket's carries forward to a repeat election, and Kalshi's does not.
A contract on Lagarde leaving the ECB in 2026 already says yes. Polymarket's market closed at 100 cents for yes. Its rules count an announcement, not a departure. She leaves on Feb. 7, 2027.
Settled on the Rules
Neither move says what happens next in Jerusalem or Frankfurt. The Israel gap largely reflects two definitions of the same race. The Lagarde contract paid on fine print that a headline reader would miss. Official Israeli results on Nov. 4 and the ECB's Dec. 17 meeting come next.
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Large investors bought into prediction and crypto trading rails.
The NYSE's owner wants to bring Hyperliquid-style perpetual futures to U.S. retail traders. Intercontinental Exchange (ICE) agreed to run a regulated U.S. market for Trade[XYZ]. Its contracts run on Hyperliquid. Regulators still have to approve it. ICE rose about 5%, and Hyperliquid's HYPE token rose about 16% to near $94.
Kalshi raised $1 billion at $40 billion, nearly double its value in May. Sequoia and Wellington co-led the round. Utah filed criminal charges against Kalshi and its founders the day before. Kalshi told the New York Times the round closed before the charges.
Wall Street Buys the Rails
Neither deal settles the legal question. ICE still needs approvals. Kalshi's investors committed while its fight with the states was under way. Utah's criminal charges came after the round closed. Any CFTC filing for ICE's venue and the first court date in Utah come next.
Lenders were the eager funders of the AI build-out on Thursday.
Bond buyers offered Microsoft 4.6 times what it sought as shareholders sold Alphabet. A single manager committed all the financing for ADT's buyout. Elsewhere, forecasts appeared to set stock prices, and contract rules explained moves that headlines missed.
Capital moves early. Coverage catches up. The gap between the two is worth watching.
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