Key Highlights

● Shares traded at $137.27, up 2.60%, as of 8:23 a.m. ET before Friday's open.

● No company announcement was behind the move, which reflects defensive and Dividend buying.

● Nasdaq-100 futures were down about 2.6% as Intel fell about 25% and Amazon about 7%.

● PepsiCo renewed its US Taco Bell beverage Partnership for 11 more years through 2036.

PepsiCo (NASDAQ:PEP) shares were rising before Friday's open, with a pre-market table showing the stock at $137.27, up 2.60%, as of 8:23 a.m. ET. There was no company announcement behind the move. A note on the stock attributes it to defensive and dividend buying and says there is no company news today.

A rotation trade, not a headline

That fits the pattern across the board. Colgate-Palmolive (NYSE:CL), General Mills (NYSE:GIS), Keurig Dr Pepper (NASDAQ:KDP), Kraft Heinz (NASDAQ:KHC) and Unilever (NYSE:UL) were all higher on the same table. The theme was described as a defensive staples rotation as oil hit six-month highs and technology stocks sold off.

The selling in tech is severe. Nasdaq-100 futures were down about 2.6% around 8 a.m. ET, according to market quotes, after Amazon's (NASDAQ:AMZN) and Intel's (NASDAQ:INTC) results raised new questions about the money being spent on artificial intelligence. Intel was down about 25% before the bell and Amazon about 7%, according to market data. Dow futures, which carry more industrial, energy and health care weight, were roughly flat.

Why PepsiCo gets the call

PepsiCo owns brands such as Pepsi, Gatorade, Lay's, Doritos and Quaker, and sells them in more than 200 countries. Its Earnings tend to be steadier than those of chipmakers or online retailers because people keep buying snacks and drinks through economic cycles. The company also has a long record of raising its dividend, which appeals to investors looking for income when Growth Stocks wobble.

Its Nasdaq-100 membership matters here. Because the index is dominated by technology companies, the handful of consumer staples members, including PepsiCo, Mondelez (NASDAQ:MDLZ), Keurig Dr Pepper and Monster Beverage (NASDAQ:MNST), often move against the grain on days of heavy tech selling. Money rotating out of megacap tech can find its way into these names without leaving the index entirely.

Lower bond yields add to the appeal. The 10-year Treasury Yield was around 4.94% to 4.99% this morning, after topping 5.30% earlier in October, according to market data. When yields fall, dividend payers look relatively more attractive.

Recent company news and what to watch

PepsiCo's most recent quarterly results were released on Oct. 8, covering the quarter ending Sept. 5. Since then the main company-specific item has been an Oct. 22 agreement to renew its US beverage partnership with Taco Bell for 11 more years, through 2036. That deal also keeps PepsiCo as Taco Bell's drinks partner in Canada, the UK, Ireland and Thailand, and the stock rose about 3% that day, according to market data.

In September, the company also elected Johnson & Johnson (NYSE:JNJ) Chairman and CEO Joaquin Duato as an independent director, effective Dec. 1, adding another seasoned consumer and health care executive to its board.

The risks are mostly about costs and volumes. With WTI crude around $104 and Brent near $118 a barrel this morning, according to market data, transport, packaging and ingredient costs are likely rising across the food and beverage industry. Higher costs can force more price increases, which in turn can push shoppers toward cheaper store brands. Staples have also lagged for long stretches when investors chase growth, so the current bid may not last if tech rebounds.

Looking ahead, investors will watch whether the defensive rotation holds after the open and into next week, which brings the US midterm elections on Tuesday and the October jobs report on Friday, Nov. 6. Peer reports, including Kraft Heinz on Nov. 4, will offer the next read on pricing power and Volume trends in packaged food and drinks.