Good morning!

Wednesday's election rally lasted exactly one day, because on Thursday the market decided Washington might actually slow the AI build-out and sold everything tied to it. Plus Big Tech's response, a wobbly Anthropic IPO, a possible Unity buyout, and Meta backing down on publishers. Let's get into it.

📊 MARKETS

The worst day for all three major indexes since the April 2025 tariff shock.

Nasdaq: 24,315.00 ↓5.52%

S&P 500: 7,353.73 ↓4.36%

Dow: 51,523.06 ↓3.44%

10-Year Treasury: 4.84%, down about 5 basis points

Bitcoin: about $75,970, ↓5.5%

The Nasdaq closed more than 10% below last month's record, so it's officially in a correction, and the small-cap Russell 2000 joined it. Every one of the 11 S&P 500 sectors finished lower, and decliners beat advancers almost 6 to 1 on the NYSE. Money ran to bonds and gold instead. This morning Nasdaq-100 futures are up about 1.7%, with the October jobs report still to come.

📉 THE AI TRADE JUST LOST $1 TRILLION IN A DAY

The Magnificent Seven gave up more than $1 trillion in combined market value on Thursday. Nvidia alone lost more than $440 billion. It fell over 9% and is now down 2.6% for the year. Tesla dropped 10.8%.

The chip stocks got it worst. The iShares Semiconductor ETF fell more than 12%, its worst day since March 2020. Micron and AMD each lost about 17%, and Broadcom fell 10%. The S&P 500's tech sector dropped 7.3%, also its worst session since March 2020.

The trigger is political. Democrats took both chambers of Congress and several big governor races on promises to slow down data center construction. Bernie Sanders has already called for a national moratorium. Investors read that as a threat to the single biggest spending wave in the economy.

It didn't stay in the US either. South Korea's Kospi fell more than 6% on Friday, after a drop of more than 8% early in the session triggered a 20-minute trading halt. Japan's Nikkei fell 5.96% and is now in a bear market, and so is Taiwan's Taiex. TSMC lost 9.6% and SoftBank 11.6%.

The bigger story: this wasn't a rotation anymore. On Wednesday, money moved out of chips and into the giants. On Thursday it just left. Caterpillar fell 6% and JPMorgan 4%.

My take: one election doesn't kill AI demand. But a market priced as if every data center gets built on time, with cheap power and no pushback, had zero room for a "maybe slower." That's what the market is repricing. Nothing new has to break for prices to keep falling. It just has to stop going perfectly.

🏗️ BIG TECH IS ALREADY REWRITING THE DATA CENTER PLAYBOOK

Two days after voters sided with data center limits in 40 of 41 local ballot measures, Google announced a $17 billion data center in Wyoming, its first in the state.

Look at how it's pitched. Google says it will pay for 100% of the power it uses and cover the infrastructure costs its growth creates. The site will be air-cooled to save water. A big part of the power comes from a planned 702-megawatt natural gas fuel cell plant built with Bloom Energy. And it's setting up a community council in Cheyenne to deal with local concerns.

Microsoft is going the other way with outside partners. It's tightening oversight of projects from neoclouds Nebius, IREN and Nscale, stepping away from ones it sees as risky, and declined an option to expand its Nscale deal in Texas. Nebius fell about 15% and IREN almost 17%. After the bell, IREN said more than $4 billion in annual recurring revenue it expected in 2026 has slipped to at least January 2027.

In Texas, Governor-elect Gina Hinojosa said the state can still work with Elon Musk, but "on our terms." She also asked state parks officials to hold off on a land sale that would expand SpaceX's Starbase.

My take: the data center business is splitting in two. Companies with cash can pay for their own power and buy goodwill. The ones financed with debt and a single big customer can't. If you're betting on AI infrastructure, the balance sheet now matters as much as the order book.

🦄 ANTHROPIC'S $1.5 TRILLION IPO JUST HIT TURBULENCE

Anthropic has been aiming to list the week before Thanksgiving and raise up to $100 billion, which would be the biggest IPO ever. The number everyone used was a $1.5 trillion valuation.

Thursday changed that conversation. Three major investors who plan to buy in told the Wall Street Journal the valuation will probably have to come down, and one said it could land closer to $1 trillion. Another floated a delay. Reuters separately reported that potential investors doubt the roadshow can start next week as planned.

Investors also want the October revenue number, which was left blank in the updated filing.

The catch: a $500 billion haircut sounds like a disaster, but $1 trillion would still make it one of the most valuable companies on Earth on day one. The real risk isn't the price. It's a postponement, because the whole AI funding machine has been leaning on this deal as proof that public markets will pay up.

My take: if I were advising them, I'd take the lower number and go. A deal that trades up after pricing fixes the mood. A deal that waits for a better tape tells everyone the tape is the problem.

🎮 THE INVESTORS WHO BOUGHT EA ARE CIRCLING UNITY

Silver Lake and Saudi Arabia's Public Investment Fund have held talks to buy Unity, Reuters reported. They're the same pair that helped take Electronic Arts private in a $55 billion deal that closed in August.

Silver Lake already owns about 8% of Unity. The group discussed a valuation of about $25 billion before Unity's latest earnings report lifted its market value to roughly $21.5 billion. Unity is working with an investment bank on its options, and nothing is agreed.

The stock jumped nearly 15% during the regular session and another 6.6% after hours, to $52.04. That's on the same day the Nasdaq fell 5.5%.

Why it matters: most people think of Unity as the engine behind a huge share of mobile games. But a big part of its business is ads, helping those games get users and make money. That's the same arena AppLovin dominates.

My take: as someone who runs an ad network, this is the smart money move of the week. While public investors dump anything with "AI" in the pitch, private buyers are going after businesses with real cash flow from ads and game tools. Take it private, fix it away from quarterly scrutiny, sell it later. That's the play.

🧾 THE AFTER-HOURS SCORECARD

Earnings kept coming after the close, and the market rewarded actual growth.

Airbnb jumped 11%. It earned $3.16 a share against $2.85 expected, on revenue of $4.87 billion versus $4.75 billion. Cloudflare rose 14% after guiding fourth-quarter revenue to $845 million to $846 million, way ahead of the $798 million expected. JFrog soared 25% on a raised full-year outlook.

The other side was ugly. DraftKings tanked 22% after losing 94 cents a share, much worse than the 39 cents expected, on revenue of $1.33 billion against $1.40 billion. Atlassian fell more than 15%, Affirm 11% and Lyft about 5%.

My take: software that sits underneath the internet (security, traffic, developer tools) is having a much better week than the hardware story. Cloudflare doesn't need a new data center approved to grow. That's a nice place to be right now.

📰 META BLINKED ON PUBLISHERS

Meta has indefinitely paused the new business terms that critics said would let it scrape the websites of companies using its business tools, including news publishers.

The updates covered Meta's commercial terms, product catalog terms, self-serve ad terms and generative AI ad creative terms. They were set to take effect November 20. Now they won't, and the existing terms stay in place.

The pressure came from everywhere. Courts in Norway and Brazil issued preliminary injunctions. The UK's competition regulator opened a formal investigation into whether Meta was abusing a dominant position. And Senators Adam Schiff and Marsha Blackburn, from opposite parties, both asked Mark Zuckerberg to withdraw them.

My take: publishers rarely win against a platform this size. This one worked because regulators, courts and both parties moved at the same time. If you run any business that advertises on Meta, read the next version of those terms closely when it shows up. It will show up.

🌍 A FEW OTHER THINGS ON THE RADAR

Jobs day: The October payrolls report lands this morning. Economists expect 59,000 jobs and unemployment holding at 4.2%. Odds of a December rate hike fell to about 70% from 83% during Thursday's selloff.

A record nobody wanted: Worker productivity jumped 3.6% last quarter, but the share of output going to workers as pay fell to 53%, the lowest in data going back to 1947.

Zipline: The drone delivery company raised $1.5 billion at a $21.5 billion valuation, nearly triple its January price, and Walmart is adding 300 more drone delivery sites.

Letterboxd: The New York Times Company is in exclusive talks to buy the film fan network for about $330 million, more than 20 times its projected earnings this year.

Oil: One energy analyst puts the odds of the US resuming military action against Iran at 80% and expects Brent and WTI back above $100.

Good morning!

Wall Street spent Wednesday acting like the Iran war might actually end, and oil fell off a cliff because of it. Big Tech won the election trade, the companies building data centers lost it, and AI spending got audited from two directions. Let's get into it.

📊 MARKETS

One of those days where almost everything went up and the oil screen was the only thing flashing red.

Nasdaq: 25,737 ↑1.44%

S&P 500: 7,689 ↑1.58%

Dow: 53,356 ↑3.03%

10-Year Treasury: about 4.88%, down 3 to 7 basis points across the curve

Bitcoin: back above $80,000, up about 3%

The Dow gained more than 1,500 points, its best day since April 2025. Consumer discretionary led the S&P 500 at +4.2% and energy dragged at -4.8%. Gold jumped about 3.5% to above $4,000 an ounce. Futures were mixed this morning, with Nasdaq-100 futures down more than 1% after the rally.

🛢️ OIL JUST HAD ITS WORST STRETCH SINCE 2020

Brent crude fell 8.7% to $94.62 a barrel on Wednesday and WTI dropped to about $88.60. Brent is down roughly 20% since Monday. If that holds through Friday, it would be the biggest weekly drop since April 2020.

The trigger was Vice President JD Vance blaming the Iran war for the Republican losses. "The reason we lost is the war," he wrote on X. Markets took that as a sign Washington wants out, and Qatar has been stepping up its mediation too. Trump has also said the war's unpopularity was a big factor in the midterms.

The bigger story: cheaper oil is the thing that matters most for inflation right now. Gas was above $4 a gallon on Election Day for the first time ever, and prices at the pump were a major reason voters were angry. Bonds rallied, the dollar hit its lowest level since September 30, and the 10-year yield is now at its lowest since July. A lot of the stock rally is really an oil rally.

My take: the market is pricing in a peace deal that doesn't exist yet. Nobody has signed anything. If talks stall, Brent doesn't need much of a reason to jump back above $100.

💻 BIG TECH WON, THE DATA CENTER BUILDERS LOST

This is where it got interesting. Amazon rose 6.1%, Microsoft 6.7%, Apple 5.3% (to a record high), Alphabet 3.2% and Meta 1.4%. At one point those five were on pace to add more than $750 billion in market value in a single session.

The logic is simple. If new data center construction gets slowed down by politics, the giants that already own the capacity look smarter, and their spending pressure eases. Those five plan to spend more than $740 billion on infrastructure this year, up from roughly $400 billion last year, and the cash flow hits from that were the whole story of the past two weeks.

The smaller builders got hit instead. CoreWeave fell about 10%, Nvidia 3.2% and Micron 7%. IREN dropped 11.2% and Applied Digital 6.7%. Those companies are spending several times their revenue to keep up with orders, and they depend on that spending staying fast.

OpenAI clearly noticed. On Thursday it published a set of commitments for data centers it owns and runs. It will pay the full cost of powering them, ask communities for input, publish construction plans and stay away from NDAs with public officials. It also wants lawmakers to turn those rules into law.

The numbers behind that: voters backed restrictions or rejected pro-development measures in all but one of 41 local data center ballot measures across 10 states, per Ballotpedia and CNBC's tally. That's not a fringe view. If you build anything that needs cheap compute, expect more of these pledges.

💊 CVS BEAT ON EARNINGS AND STILL GOT CRUSHED

Yesterday's breakup plan turned into a 12.5% drop. CVS closed at $79.96 even though it had a strong quarter: adjusted earnings of $2.09 a share against about $1.65 expected, revenue of $108.4 billion, and a raised 2026 outlook of at least $8.20 a share.

So why the sell-off? The 2027 outlook (at least $8.65 a share) was ahead of estimates, but one analyst said it looks weak next to rivals that are seeing earnings growth speed up. The CFO also flagged trouble next year in the pharmacy benefit business from a government drug-discount program, a softer selling season with clients, and shrinking health plan membership.

Meanwhile, the rest of the sector ripped. Centene gained about 12.6%, Elevance 4% and Cigna 3%.

My take: a breakup that doesn't close until 2028 is a long wait, and investors clearly don't want to sit through it for a so-so 2027.

🔍 AI SPENDING IS GETTING AUDITED

Two stories on the same day, same message. Datadog beat on every number (revenue of $1.20 billion, up 35%, and adjusted earnings of 81 cents versus 64 expected) and the stock fell 14.4% anyway. Its largest customer, an AI company it hasn't named, cut usage, and the fourth-quarter forecast assumes that customer drops to the minimum it has committed to. The forecast of $1.19 billion to $1.20 billion is basically flat from the quarter just reported.

The catch:management says growth excluding that customer accelerated again. The core business is fine. It's the dependence on one giant AI buyer that scares people.

Then there's Apple. Bloomberg reports it's cutting how much employees can spend on AI tools. In October it lowered the daily cap for some engineers from $300 to $200 and is now looking at $100. Some non-engineering teams could go from $100 to $25 a day, with exceptions on request.

Why it matters: for two years the story was that AI usage only goes up. Now companies are putting meters on it. If you run a business that sells to AI companies, find out how concentrated your revenue is before your biggest customer decides to optimize.

📣 APPLOVIN IS UP 24%, WHILE SNAP AND ZILLOW GET PUNISHED

Earnings after the bell were a mixed bag, and the ad-tech name was the standout. AppLovin jumped more than 20% after revenue came in at $2.18 billion against $2.07 billion expected, with adjusted EBITDA of $1.84 billion versus $1.73 billion.

Snap fell about 7%. Revenue of $1.72 billion barely missed, and daily active users came in at 495 million versus 499 million expected. Zillow dropped more than 16% on weaker revenue ($724 million versus $754 million). Expedia lost about 7% on a soft guide, and Qualcomm fell nearly 6% despite beating, because its forecast midpoint landed just under expectations.

My take: as someone who runs an ad network, AppLovin is the one to study. It sells performance, not impressions, and advertisers keep paying for results. Meanwhile Snap is losing the one metric that matters, people showing up every day.

🚀 SPACEX IS RAISING $40 BILLION TO RENT NVIDIA CHIPS

Goldman Sachs and Apollo have started shopping pieces of a $40 billion debt package for SpaceX, Bloomberg reports. The money would buy Nvidia chips through a special purpose vehicle, and SpaceX would lease them for five years. That keeps the debt off its own balance sheet. Early buyers are reportedly being offered slices of up to $500 million.

It's a way to fund chips without piling the debt onto the company's own books, and it arrives while AI stocks are wobbling. Off-balance-sheet debt works great right up until the chips are worth less than the lease says they are. SpaceX stock fell 3.8% on Wednesday.

🌍 A FEW OTHER THINGS ON THE RADAR

AstraZeneca: It reportedly made a non-binding offer of about $10 billion for Rhythm Pharmaceuticals, up to $134 a share including milestone payments, according to the Wall Street Journal. Rhythm shares jumped 28%.

Isomorphic Labs: The DeepMind spinout is reportedly in talks to raise about $5 billion at a valuation near $50 billion, per Bloomberg. Its first drug trials were expected by the end of this year.

Bank of England: It decides on rates today and is expected to hike for the first time in more than three years.

Pound: Sterling hit a seven-week high against the dollar and is close to $1.35.

Gold: Back above $4,000 an ounce on its best day since August 19.

Good morning!

Democrats took the House and the Senate overnight, and the first place investors looked was Texas data centers. Add AMD's blowout quarter, Meta's $15 billion bond, CVS planning to split itself up, and a fridge hack across Europe. Let's get into it.

📊 MARKETS

Stocks went into Election Day on a small bounce. The overnight swings are the real story.

Nasdaq: 25,372 ↑0.83%

S&P 500: 7,569 ↑0.36%

Dow: 51,787 ↓0.38%

10-Year Treasury: about 4.95%

Bitcoin: dipped overnight as results came in, then recovered nearly all of it

Tuesday was a chip rebound. Nvidia rose 2.3%, Micron 2.6%, and the S&P 500 snapped a three-day losing streak. Apple fell 1.9% and dragged the Dow. Then the results rolled in. Nasdaq-100 futures fell as much as 2.4%, Japan's Nikkei dropped over 4% at one point, and by early Wednesday US futures were slightly positive again. Gold is up about 3% to roughly $4,040 an ounce. Nobody really knows what a Democratic Congress means for stocks yet, and the market is saying so with these swings.

🗳️ DEMOCRATS WIN THE HOUSE AND THE SENATE

It wasn't close. NBC projects Democrats flipped seven Senate seats, including Texas, Ohio, Iowa, Maine, North Carolina and South Carolina, and will hold at least 258 House seats. They also flipped governor's mansions in Texas, Georgia, Ohio and Iowa.

Exit polls showed Trump's disapproval at 62%. Prices, corruption and the AI data center build-out were the big themes. Trump's picks got hit hard: Ken Paxton lost to James Talarico in Texas, Sherrod Brown beat Jon Husted in Ohio, and Roy Cooper beat Michael Whatley in North Carolina.

The mid-decade redistricting push mostly flopped too. Plenty of the redrawn seats still went blue.

Trump's reaction was calmer than people expected. He told the Wall Street Journal "we'll work with the Democrats," and didn't contest the results.

My take: Divided government usually means nothing big gets passed, and markets tend to like that. History is on the bulls' side too. The S&P 500 has gone up after each of the last 11 midterms. But this one comes with a loud anti-billionaire message, and tech is the obvious target.

🏗️ TEXAS JUST BECAME THE AI TRADE'S BIGGEST RISK

This is the part I'd watch. Gina Hinojosa beat three-term governor Greg Abbott in Texas, and she ran on a moratorium on new data centers until the state writes tougher rules. The legislature is still Republican, so she can't just flip a switch.

Texas holds roughly 27% of US data center capacity, by Wells Fargo's estimate, and it's projected to pass Virginia as the biggest market by 2030. In a CNBC voter poll, 56% said data centers were a major factor in their vote.

The money lost: Elon Musk put more than $200 million into stopping Talarico and lost. SpaceX and Tesla were each down around 5% before the open. CoreWeave dropped 3.6%.

Who gained: Solar and renewables ripped. First Solar jumped 8.5% and Plug Power over 10%. Health insurers and hospital stocks rose too. Defense names and prison operators fell.

House Democrats are already talking about hauling AI CEOs in to testify under oath. The incoming oversight chair's message to them was "lawyer up."

Where I land: AI stocks were already sliding on worries about slowing data center spending. Now there's a political reason to slow it down. If you're building anything that depends on cheap compute, watch what happens in Austin.

💻 AMD SAYS THE DEMAND IS STILL THERE

Good timing for the AI bulls. AMD reported revenue of $13.38 billion, up 45% from a year ago, against $13.09 billion expected. Adjusted earnings came in at $2.09 a share versus $1.95 expected. The stock jumped about 8% after hours.

Data center is now 64% of its business, up from 47% a year ago, and revenue there nearly doubled. CEO Lisa Su said she expects server revenue to double again in 2027. Fourth-quarter guidance is about $17 billion versus $16.2 billion expected.

The catch: The PC and gaming side is weak. That segment fell 8% to $3.7 billion, and gaming revenue dropped 40%. Memory costs are squeezing everyone who makes consumer hardware.

Super Micro and Arista also jumped after hours on strong guidance. The sell-off in chips was about fear of overspending, and so far the earnings reports keep saying demand is fine.

💸 META BORROWED $15 BILLION AND INVESTORS STILL LINED UP

Meta sold $15 billion of bonds in five parts, and investors put in about $58 billion of orders. That's nearly four times the offering. It came just days after S&P moved Meta's outlook to negative, citing the AI spending.

The price is the interesting part. The 30-year bond priced about 2.2 points over Treasuries, roughly 0.9 points more than a similar bond in April. Meta is paying a lot more to borrow than it did six months ago, and buyers still showed up. A first euro bond sale opened today.

This comes days after Meta laid out a possible equity raise of nearly $100 billion. A company that used to fund everything from cash now needs debt and equity both.

The bigger story: Big Tech has quietly turned into a heavy borrower. That works while the AI story holds. If it cracks, a lot of that debt gets a lot harder to carry.

💊 CVS IS BREAKING ITSELF IN TWO

CVS Health plans to split into two public companies in the first half of 2028, the Wall Street Journal reported, quoting the company. CEO David Joyner said, "We're basically taking what I believe is one great company and making it two."

One company keeps the CVS Health name and holds Aetna, the Caremark pharmacy benefit business, Oak Street and Signify. The other, CVS Pharmacy, gets the roughly 9,000 drugstores, mail-order and MinuteClinic. The drugstores bring in about a third of the group's $417 billion in revenue, according to the FT.

It unwinds the $78 billion Aetna deal from 2018. Political pressure on pharmacy benefit managers is a big part of the reason. The stock rose slightly after hours, and the company reports earnings today.

My take: The "one company that does everything" idea is dying in healthcare, same as it did in media. Retail pharmacy is a low-margin grind, and insurance is a different business. Splitting them lets each one be valued on its own.

🧊 HACKERS COOKED SUPERMARKET FRIDGES ACROSS EUROPE

Early Monday, attackers remotely switched fridges and freezers into defrost mode at supermarkets in seven to ten countries, depending on whose count you read. Temperatures hit up to 122°F (50°C) in some units. About 40 Delhaize stores in Belgium and Luxembourg were hit, and Carrefour, Ikea, Coop, ICA and others reported problems.

It's the same playbook as an attack on hundreds of French supermarkets three weeks ago. Danfoss, the Danish maker of the refrigeration controls, said its products were involved both times. Most of the affected systems were older units that no longer get security updates.

Nobody has claimed it, and no authority has confirmed the two waves are linked. Stores are now rushing to patch and disconnect systems from the internet.

Why it matters: Nobody stole data here. They just spoiled food, at scale, using cheap internet-connected controllers. Boring infrastructure is the soft target, and every old device that never gets patched is a free weapon.

🌍 A FEW OTHER THINGS ON THE RADAR

Novo Nordisk: Third-quarter sales of 79.2 billion Danish kroner ($11.9 billion) beat estimates, helped by its Wegovy pill, and it raised its outlook. Shares jumped as much as 6%.

Gold and silver: Gold is up about 3% to roughly $4,043 an ounce and silver is up over 4% near $52 as traders react to the sweep and a weaker dollar.

Dollar and yields: The dollar index slid to a one-month low near 101.3, and the 10-year yield eased slightly Wednesday morning.

Workplace engagement: Gallup says US employee engagement fell to 29% in Q3, the lowest since 2011. The sharpest drops were among hybrid and remote workers at companies rolling out AI.

Asia: Japan's Nikkei closed down 1.42% after falling more than 4% earlier, with SoftBank and chip equipment makers taking the hits. South Korea's Kospi and China's CSI 300 finished higher.

Good morning!

Anthropic's growth is cooling right as it tries to go public, Marvell and Oracle both got punished for how they plan to pay for AI, and Apple just told us what memory chips are doing to its margins. Midterm voting is also underway. Here's what matters this morning.

📊 MARKETS: TECH KEEPS BLEEDING, THE DOW QUIETLY WINS

Wall Street opened November the same way it ended October. Stocks started higher, then the tech selling showed up and wiped out the gains.

Nasdaq: 25,164.32 ↓ 1.07%

S&P 500: 7,541.40 ↓ 0.51%

Dow: 51,983.98 ↑ 0.41%

10-Year Treasury: 4.910%

Bitcoin: about $78,500

The S&P was up 1.1% early in the day and still finished red. Money is rotating out of chips and AI names and into industrials and old-economy stocks. Oil helped the Dow. US crude fell 7.4% to $96.46, its biggest one-day drop since July, after Iran signaled it was open to talks.

This morning the Dow futures are down about 0.5%, S&P futures are slightly lower and Nasdaq 100 futures are up about 0.2%. Asia was ugly for chips, with South Korea's Kospi down 3.6% and Taiwan's index down 3.6%. And JPMorgan has flagged that a full Democratic sweep tonight could trigger another selloff in AI stocks. Prediction markets give Democrats roughly a 75% chance of taking the Senate.

🧮 ANTHROPIC'S GROWTH SLOWED, AND INVESTORS ARE SHAVING THE PRICE

Anthropic filed an amended S-1 yesterday with its third quarter included. Revenue hit about $17 billion, up roughly 11x from a year ago. Nine-month revenue is $33.24 billion. It lost $23.29 billion in the quarter.

The catch: growth is slowing fast. Q3 revenue rose about 47% from Q2. Q2 was up 144% and Q1 was up 132%. Still huge, but the curve is bending.

The bill: the company says it has about $895.4 billion in purchase commitments and leases, almost all of it for compute and infrastructure. Its compute costs for nine months were up 329%.

The price: the Wall Street Journal reports institutional investors are telling Anthropic to aim for a valuation of about $1.5 trillion to $1.6 trillion, down from earlier talk of $2 trillion, because of the tech selloff.

The filing also says the company may "imminently meet" its threshold for AI that can improve itself, and might not spot the acceleration until after it happens. That's a wild line to put in a prospectus.

My take: a $17 billion quarter is absurd by any normal standard. But when you owe nearly $900 billion in compute, you need growth to stay absurd. A slower curve and a lower price is the market asking whether the math still works.

🔌 MARVELL'S $115 BILLION DEAL AND ORACLE'S $20 BILLION RAISE BOTH FLOPPED

Two companies told the market how they'd pay for the AI buildout, and the market hated both.

Marvell agreed to buy Lumentum, which makes optical components for data centers, in an all-stock deal valued at about $115 billion. The goal is to compete with Broadcom. Marvell fell 12.7% and Lumentum dropped 18.6%. Nvidia put $2 billion into each company earlier this year.

Oracle filed to sell $10 billion in stock and $10 billion in bonds to fund data centers and chip purchases. The bond piece is split into six tranches with maturities up to 20 years. Oracle fell about 8.8% to $119.22.

The bigger story: last week the worry was that Big Tech was burning cash. This week it's about who has to borrow or issue shares to keep building. Stock issuance dilutes everyone, and debt gets pricey with the 10-year near 5%.

I'd watch the credit side. Equity investors can shrug and move on. Bond buyers can't, and they get paid to be skeptical.

🍎 APPLE BEAT, BUT MEMORY CHIPS ARE EATING THE MARGIN

Apple's first earnings under CEO John Ternus: revenue of $114.48 billion, up 12%. iPhone sales were $57.58 billion, up 17%. Mac jumped 24% to $10.8 billion. Services were $31.57 billion, up 10%.

The soft spots: iPad fell 10% to $6.2 billion, missing estimates, and Apple blamed supply constraints. China revenue grew 21% to $17.5 billion but missed the $18.9 billion analysts wanted.

The real story: Ternus called memory pricing "unprecedented" and said costs will keep rising into December and beyond. Apple guided gross margin to 45% to 46% next quarter, down from 47.9%. Inventory is up 154% from a year ago to $14.54 billion, and its manufacturing purchase obligations jumped $33 billion in one quarter. The shares slid about 2% after hours.

Apple also wouldn't rule out more price hikes. If Apple can't dodge the memory squeeze, nobody making phones or laptops can.

📈 PALANTIR'S COMMERCIAL BUSINESS JUST PASSED ITS GOVERNMENT BUSINESS

Palantir reported revenue of $2.31 billion, up 96%, against $2.18 billion expected. Adjusted earnings were 44 cents a share against 41 expected. It crossed $2 billion in a quarter for the first time.

The twist is the mix. US commercial revenue jumped 148% to $984 million and now beats US government revenue of $953 million. For a company everyone filed under "defense contractor," that's a real shift.

It raised full-year revenue guidance to about $8.53 billion. The stock still dipped about 2% to 3% after hours, which tells you how high the bar is right now. CEO Alex Karp also repeated his call to nationalize AI labs, calling it the "only realistic way" to handle liability.

🌍 A FEW OTHER THINGS ON THE RADAR

Crypto: Brazil's biggest exchange, Mercado Bitcoin, halted withdrawals after a breach involving more than $46 million, and Tether froze over 4.5 million USDT. North Korea has now denied the FBI's claim that it hacked Binance, calling it a "grave political provocation."

Rates: Australia's central bank hiked to 4.85%, an 18-year high and its fifth hike this year, with inflation at 4.3%. Rate cuts feel very far away.

Deals: Salesforce is reportedly buying contact center AI startup Cresta for about $2.7 billion.

Layoffs: Linux company SUSE is cutting roughly 10% of staff and blaming AI automation for changing how software companies work.

Wireless: SpaceX is reportedly in talks with EchoStar for Boost Mobile or access to its network, after the big three carriers turned down its requests.

Data centers: Putin ordered private data center owners to reserve 10% of capacity for Russian state IT after Ukrainian drone attacks.

Good morning!

Binance is back online after the biggest crypto heist ever, and customers pulled billions in the first hours. The FBI has also named who it thinks did it. Plus, OpenAI is workshopping a new name for data centers, Google's own energy chief just threw cold water on space compute, and a new benchmark says even the best AI agent fails almost everything. Here's what matters this morning.

📊 MARKETS: A BOUNCE AFTER THE WORST WEEK FOR TECH

Futures are pointing up as November starts. Friday's close was ugly, so this is a bounce, not a recovery.

S&P 500 futures: ↑ 0.5% (Friday close 7,580.07, ↓ 1.82%)

Nasdaq 100 futures: ↑ 0.9% (Nasdaq Composite closed Friday at 25,437.00, ↓ 2.86%)

Dow futures: ↑ 0.5% (Friday close 51,770.31, ↓ 1.09%)

10-Year Treasury: 4.929% (Friday close)

Bitcoin: about $77,900, flat

The AI and chip names have lost about $5 trillion in market value since October 6, while the other 625 big US stocks added about $1.3 trillion. So the market isn't falling, a handful of giant stocks are. Last week proved it: the S&P slipped 0.6%, yet nine of its eleven sectors rose about 1% or more.

Oil is helping this morning. WTI is back near $100 after closing Friday above $104, its highest close since mid-September. The Strait of Hormuz is still effectively shut. Apple and Palantir report after the bell today, the midterms are Tuesday, and the jobs report lands Friday.

🔓 BINANCE REOPENED AND $3.6 BILLION LEFT

Binance restarted withdrawals in phases on Sunday, four days after the $6.3 billion hack. In the first stretch it processed $4.65 billion going out and $1.01 billion coming in. Net outflow: $3.64 billion, about 2.1% of the $171 billion it says it holds.

Binance says it has now replaced roughly 95% of what was stolen, with the rest in less liquid tokens that take longer to buy. Founder CZ posted that "98% choose to stay." Other trackers counted bigger outflows, with some tallies above $5 billion, so the number depends on who is counting and when.

The culprit: The FBI says North Korea did it, through a group called TraderTraitor, the same one behind the $1.5 billion Bybit theft last year. It says the hackers are already swapping the loot into Ether and will move into DeFi and instant swap services next. Circle says it froze more than $1.1 billion in USDC tied to the incident.

The awkward part: Asked about it Saturday, Trump said "we don't know if it's North Korea, but if it is, we'll talk to North Korea about it." That's a very different tone from his own FBI.

My take: a run on an exchange that ends at 2% is a pass. Customers got their money, which is the only test that matters. But $6.3 billion moved in minutes, and anyone who keeps funds on an exchange should treat that as the real lesson.

🛰️ GOOGLE'S ENERGY CHIEF JUST DEFLATED THE SPACE DATA CENTER HYPE

Amanda Peterson Corio, who runs data center energy at Google, said putting data centers in orbit could cost up to 100 times more than building them on the ground. Her advice was to exhaust every option on Earth before going to space.

She also said the US has enough power. The real bottleneck is permits and the long studies needed to connect to the grid.

The catch: Google is itself testing this. It already flew a small prototype satellite with its own AI chips, roughly one kilowatt of solar power. Its researchers have said costs could roughly match the ground if launch prices fall to about $200 a kilogram, which they see happening around 2035. Musk says he can have orbital data centers as soon as next year.

I'd bet on the person who has to sign the checks. A rocket isn't a cheaper way around a permit, and the permit problem is something money and lobbying can actually fix.

🏷️ OPENAI WANTS YOU TO SAY "AI COMPUTE CAMPUS"

Axios reports OpenAI is planning a policy and PR push right after Tuesday's midterms. One piece of it is renaming data centers "AI compute campuses." The company's top policy exec, Chris Lehane, called the midterms "a bit of a movie trailer" for 2028, when he expects AI to be the issue in the presidential race.

The rest of the plan includes AI "speed limits," a message that AI empowers people in daily life, and a push for the US to help write global standards. Data centers are unpopular enough that Amazon and Microsoft have both said they'll stop using NDAs when negotiating with local governments.

I run an ad network, so I'll say this plainly: you can't rebrand your way out of a power bill. People hate data centers because of noise, water and electricity prices. Calling it a campus makes it sound like a place with a lawn. If the project doesn't change, the name won't either.

🇸🇦 ARAMCO JUST BOUGHT HALF OF SAUDI ARABIA'S AI COMPANY

Aramco closed its deal for 49% of Humain, the state-backed AI company. The Public Investment Fund keeps 51%. Aramco put in about $2.6 billion in cash, plus AI, compute and digital assets. Humain plans 3 gigawatts of data center capacity by 2030.

Why it matters: an oil giant is now a co-owner of an AI infrastructure company, and it says it wants Humain's tech inside its own operations. The cash from oil is being turned into compute. With oil above $100, they have plenty to turn.

🇰🇷 SOUTH KOREA'S RECORD BUDGET IS AN AI BET

President Lee unveiled a record 2027 budget of 820.9 trillion won (about $610 billion), up 12.8%. That includes 21.3 trillion won for chips, physical AI and AI data centers, nearly double this year. Another 4.7 trillion won goes to a sovereign AI model he wants to be the "world's highest performance."

The backdrop is wild. October exports jumped 93.7% to a record $115.3 billion, and the first ten months total $930 billion. The trade surplus for the month was $42.5 billion. Memory chips are carrying the country right now, which is also why a lot of investors are nervous about it.

🧪 THE BEST AI AGENT SCORES 12% ON A NEW BENCHMARK

SemiAnalysis launched GDPx today, 206 tasks across 11 domains like chip design, biology, finance and legal. Anthropic's Claude Opus 5.5 leads at 12.0%. Google's Gemini 4 Carbon is second at 10.9%, and OpenAI's GPT-6 Astra third at 9.6%.

The bigger story: cost. Opus costs about $51 per task. Gemini 4 Carbon costs about $16 per task and gets most of the way there. Finance and legal tasks were so hard that nearly every model scored zero.

Fair warning: these are new tasks built by outside partners and the results haven't been replicated, and Carbon isn't public yet. Still, a benchmark where the top model fails 88% of the time is a useful reality check against all the "AI replaces everyone" talk.

🌍 A FEW OTHER THINGS ON THE RADAR

Kioxia: The memory maker's shares dropped after an outlook suggested demand is leveling off, a small crack in the storage boom.

Hex: The data platform raised a $100 million Series D led by Peak XV.

Broccoli: The home-services AI startup raised $52 million across a Series A and B, led by Khosla Ventures.

AO3: The fan fiction library could stay offline for up to four weeks after a security incident.

Good morning!

Wall Street ended October with a thud. Intel lost nearly a third of its value in one session, Reddit had the worst day of its short life as a public company, and the Nasdaq just wrapped its ugliest month in more than a year and a half. Plus, a new stat on what AI spending is doing to Big Tech’s cash, and OpenAI’s big fundraise isn’t going to plan. Here’s what matters this morning.

📊 MARKETS: THE AI TRADE FINALLY BLINKED

Friday’s close, with the weekend now between us and the next move.

Nasdaq: 25,437.00 ↓ 2.86%

S&P 500: 7,580.07 ↓ 1.82%

Dow: 51,770.31 ↓ 1.09%

10-Year Treasury: 4.929% ↓ 6 bps

Bitcoin: $76,724.36 ↓ 2.74%

That was the Nasdaq's worst single day since June, and it turned a small weekly gain into a 2% loss. For October as a whole it fell 5.3%, its worst month since March 2025. The S&P 500 had its worst day since June too and finished a third straight losing week, though it's still only about 3% below its record. The Dow held up better because money ran toward boring, defensive stocks. The Nasdaq 100 fell about 3.5%, which leaves it right on the edge of a correction.

The pattern was the same all week. Big companies keep saying they'll spend more on AI, and investors keep asking when it pays off. Tuesday's midterm elections are the next thing hanging over everyone.

🔻 INTEL JUST HAD ITS WORST DAY SINCE 1974

Intel closed down 28.58% at $65.76. That's roughly $150 billion of market value gone in a day, and it's the second biggest one-day drop in the stock's history, behind only a 29.9% fall in July 1974. The US government owns about 10% of the company, so its stake lost around $12 billion.

The strange part is that the quarter itself was fine. Revenue was $16.5 billion, adjusted earnings were 52 cents a share, and both beat what Intel had guided. The data center business was the bright spot. But the forecast for the final three months came in well short of what Wall Street wanted, with weak PC demand and supply constraints getting the blame.

The ripple: Chip stocks got dragged down with it. AMD, Arm, Qualcomm and Marvell all fell around 10%, and Sandisk dropped 13% even after a good report.

My take: Intel was the market's favorite comeback story this year, and comeback stories are priced for perfection. One soft outlook and the whole thing came apart. The lesson isn't about Intel. It's that when everybody owns the same story, the exit is narrow.

💸 THE AI BILL: BIG TECH IS SPENDING MORE CASH THAN IT MAKES

Here's the number behind all the nervousness. Microsoft, Alphabet, Amazon, Meta and Oracle brought in a record $542.9 billion in operating cash over the first nine months of 2026, up 29%. They also spent $556.9 billion on capital projects, double last year. For the first time in at least 15 years, they spent more than they generated.

So shareholders got squeezed. The five returned just 9.3% of their cash through dividends and buybacks, down from 27.4% a year ago. Buybacks alone fell about 83%. Buybacks have been one of the quiet engines behind tech stocks for a decade, and that engine is basically off.

Then Meta got a credit warning. S&P Global moved its outlook on Meta from stable to negative, keeping the AA- rating. Meta expects to spend $135 billion to $145 billion this year, and S&P thinks that climbs past $225 billion in 2027. It sees free cash flow staying negative beyond 2028, and Meta's leverage could pass the agency's downgrade line as early as 2027. Meta is also planning to sell about $97.5 billion of stock to fund the buildout.

The bigger story: This used to be a story about whether AI works. Now it's a story about who can afford to keep paying. Those are very different questions.

🧵 REDDIT GOT PUNISHED FOR A GOOD QUARTER, THANKS TO GOOGLE

Reddit fell 29.27%, the worst day since its 2024 IPO, even though it beat on revenue. Third-quarter sales jumped 53% to $895 million. The problem was everything after that. Daily users came in at 130.3 million, short of what analysts expected, and US users actually fell 2% to 50.7 million. The Q4 sales forecast of $1.0 billion to $1.03 billion also missed the $1.05 billion Wall Street wanted.

The reason is Google. CEO Steve Huffman said search referrals dropped by more than a million a week during October as AI Overviews and AI Mode answer questions without sending people to the site. He warned daily users could fall by a low double-digit percentage in Q4 if that keeps up.

The response: Reddit will start testing a logged-in-only experience in select markets outside the US this quarter, with a wider rollout to come. Logged-in users already drive more than 80% of its money, and a login wall also makes the site harder to scrape for AI. Huffman admitted the company will likely be "trading reach for engagement."

My take: I run an ad network, so I watch this one closely. When your traffic comes from a search engine that is now answering the question itself, you don't own an audience, you rent one. Reddit is the loudest example, but every publisher is on the same clock.

🛢️ BIG OIL JUST PRINTED ANOTHER MONSTER QUARTER

While tech was bleeding, ExxonMobil and Chevron both reported profits that beat forecasts and hit record highs on the stock.

Exxon earned $15.4 billion, double last year's $7.5 billion. Adjusted for one-offs it was $17.5 billion, or $4.23 a share. Chevron earned $9.9 billion versus $3.5 billion a year ago, or $5.28 a share adjusted.

The engine was refining, not drilling. The war with Iran and attacks on refineries in Russia and the Middle East knocked out fuel-making capacity, and diesel margins exploded. For the first time in at least six years, Exxon made more from refining ($7.2 billion) than from producing oil and gas ($7.1 billion). Chevron's refining profit jumped from $1.1 billion to $4.9 billion, with its US refineries running at about 98% of capacity.

Both are using the windfall mostly to pay down debt. Exxon cut its debt by $8 billion in the quarter. Cheap gas this is not, and with the midterms Tuesday, expect politicians to notice.

🤖 OPENAI FALLS SHORT WHILE BASETEN DOUBLES

OpenAI was hoping to raise $30 billion at a $1.4 trillion valuation. As of Friday's deadline it has about $11 billion in commitments, and the target has been cut to roughly $20 billion at $1.25 trillion. Some investors trimmed their checks after the tech rout. A group of UAE investors including MGX is expected to be the biggest participant, and OpenAI plans to go after family offices and wealthy individuals for the rest.

Timing is part of this. Anthropic is expected to hit public markets in mid-November, and OpenAI wanted its money locked up before that.

Meanwhile, AI inference company Baseten is reportedly raising about $2 billion in two pieces, valuing it at $26 billion and $30 billion. In June it was worth $13 billion. Sands Capital is expected to lead.

What I'm seeing: Money is getting pickier, not disappearing. It's moving away from the giant bets on models and toward the companies that make AI cheaper to run. That's where I'd be looking too.

🔐 BINANCE UPDATE: THE $6.3 BILLION HACK GOT STRANGER

A day after the record theft, we know a lot more. Binance has set aside more than $6.34 billion of company money to make customers whole, and $5 billion of that is already sitting in the exact tokens that were stolen. About $3 billion of the stolen funds has been frozen, and that's counted separately.

Blockchain analytics firm TRM Labs pins the attack on North Korea's TraderTraitor group. Binance's co-CEO said the attackers broke in at more than one point, used a self-destruct mechanism to wipe evidence, and abused an Ethereum account-delegation feature to take over a hot wallet without going through normal approvals.

Withdrawals are still paused. Binance hopes to restart them by Sunday and says it will publish a proof of reserves by Monday. Crypto didn't love any of it, and Bitcoin slid 2.7%.

🌍 A FEW OTHER THINGS ON THE RADAR

Google put a data center in orbit. The Suncatcher prototype satellite is online, and the team sent a prompt to a Gemma 4 model running on its TPU. The reply was a haiku about being in space. It's a tiny test (the chip can only run about 20 minutes at a time), but it's real.

One opt-out for AI scraping. OpenAI, Google, Microsoft and Anthropic say they'll honor a single line in a website's robots.txt that tells AI not to train on its content. It's only a draft standard for now. Anthropic has started, Microsoft begins February 1, 2027, and Google follows sometime in 2027.

Coinbase is profitable again. Third-quarter revenue fell 35% to $1.22 billion, but net income rose 66% to $719 million, its first profit in a year, helped by gains on its crypto holdings.

The clocks fall back tonight. Daylight saving ends at 2 a.m., so you get the hour back. Everything else this weekend, you can sleep on.

Good morning!

Wall Street got a very ugly Halloween preview. Google had the worst day in its history, Amazon and Intel both got hammered after the bell, and Binance says hackers got away with more than $6 billion. Oh, and the economy grew faster than anyone expected, which is not the good news it sounds like. Let's get into it.

📊 MARKETS: ONE GIANT STOCK DRAGGED EVERYTHING DOWN

Alphabet did most of the damage yesterday, and the futures say today could be worse.

Nasdaq: 26,184.72 ↓ 1.38%

S&P 500: 7,720.39 ↓ 0.30%

Dow: 52,342.56 ↓ 0.25%

10-Year Treasury: 4.989% ↓ 6 bps

Bitcoin: $78,985.82 ↓ 2.80%

Here's the weird part. Roughly four out of five stocks in the S&P 500 actually went up. Alphabet alone turned a decent day into a red one. Money rotated into defensive names like health care and utilities. After the close, Amazon and Intel both missed, and this morning Nasdaq-100 futures are down about 2%, S&P futures about 1%, and Dow futures are roughly flat. Bond yields fell on the day, which tells you some people are already wondering if the Fed gets to stay on its hiking path. Hold that thought, it comes up again below.

🔻 GOOGLE JUST HAD THE WORST DAY IN ITS HISTORY

Alphabet closed down 12.64% at $283.82. That erased about $482 billion of market value in a single session. It beat its old record drop (11.6%, back in March 2020) and it's the second biggest one-day wipeout for any US company ever. Only Nvidia lost more, around $593 billion, the day DeepSeek spooked everyone in January 2025.

What went wrong? Three things stacked up. Revenue was fine overall (about $127.6 billion, up 25%), and Google Cloud was a monster, more than doubling to $30.7 billion. But the part investors care about most, search and ads, grew 12% to $63.35 billion. Analysts wanted 15%. A year of 19%, then 17%, now 12%. That's the cash cow slowing down.

The money part: Alphabet spent $51.4 billion on capex in one quarter, more than double last year, and free cash flow went negative by about $9.1 billion. It's sticking with roughly $200 billion in spending this year. There's also a one-time $8.7 billion hit on its SpaceX stake that dragged earnings.

The fear: People are asking if AI answers are starting to eat the search business that pays for all of this. Google says query growth is the highest in five years and it's putting more ads inside its AI summaries. Maybe. But Bank of America now values core search at about 10 times earnings, below the roughly 13x the cheapest sector in the market trades at. Let that sink in. The thing that made Google a verb is priced like an oil company.

My take: this is the first time the market punished a giant for spending on AI without a matching jump in the core business. Cloud growth of 103% wasn't enough. That tells you the bar just moved.

🔥 THEN AMAZON AND INTEL MADE IT WORSE

Both reported after the close and both sold off hard. Amazon fell about 4% during the day, then another 6 to 7% afterward. Intel dropped more than 20% after hours.

Amazon missed on earnings ($1.89 a share versus $1.96 expected) and on revenue ($201.9 billion). It kept its 2026 capex plan at $220 billion. Free cash flow over the last twelve months is now negative $42.4 billion, compared with positive $14.8 billion a year earlier. To be fair, operating cash flow actually grew 29% to $168.3 billion. The gap is the AI buildout eating everything.

Intel actually beat on third-quarter numbers (revenue of $16.5 billion, up 21%). The guidance killed it. It sees $15 to $16 billion next quarter when analysts wanted about $17.1 billion, and earnings of 25 cents a share versus roughly 43 cents expected. The company says the PC slowdown could last into the first half of next year.

The pattern: Alphabet and Amazon have now shown the same thing. Huge spending, shrinking free cash flow, and investors who've stopped giving them the benefit of the doubt. Microsoft was the one that held up, with cloud growth and spending in check. Funny how that works.

🪙 BINANCE SAYS IT'S THE VICTIM OF THE BIGGEST CRYPTO HEIST EVER

Late Thursday, Binance said a security incident had an estimated impact of around $6.3 billion. About $3 billion has been frozen on-chain so far. The exchange paused all deposits and withdrawals and says it will cover every loss from its own SAFU fund and company money. Its co-founder says withdrawals should resume by Sunday.

For scale, the previous record was $1.5 billion taken from Bybit in February 2025. This is roughly four times bigger. Tether froze about $1.6 billion of its stablecoin and Circle froze about $800 million of its own.

How it happened (so far): Binance's early read is that a DevOps engineer's laptop was compromised, which let an attacker get into a service container and push unauthorized withdrawals. It says it has found no evidence that any wallet private keys leaked. Blockchain analysts have pointed at a North Korea linked group. Binance hasn't confirmed that.

My take: one laptop. Six billion dollars. This is the part of crypto that never gets old, and not in a good way. Bitcoin slid about 2.8% on the day and was drifting lower overnight.

📈 THE ECONOMY IS HOT, AND SO IS INFLATION

US GDP grew at a 3.4% annual rate in the third quarter, beating the 3.2% forecast and speeding up from 2.2% in Q2. Consumer spending rose 3.8%. Business investment jumped 12.7%, and equipment spending on things like data center gear was up around 21%.

The catch is that the AI buildout is also a drag. A lot of those chips are made overseas, so the imports get subtracted from GDP. Higher mortgage rates also hurt homebuilding.

The not so fun part: Fed favorite inflation gauge (PCE) rose 3.6% from a year ago in September, up from 3.4%. Core ran at 3.1%. The monthly jump of 0.5% was the biggest since March. At the same time, personal income grew just 0.2% and the savings rate fell to 3.8%, the lowest since 2022. Real spending was flat.

So people are spending, but more of it is price, and they're dipping into savings to do it. Add the wealth effect from stocks (which just got hit) and this growth looks pretty fragile. The Fed held rates at 3.75% to 4% on Wednesday, and many traders still think the next move is up.

🛒 DOORDASH IS BUYING INSTACART FOR $17 BILLION

The rumor is now a deal. DoorDash will pay $65 a share for Instacart, about $17 billion in equity value and a 26% premium over where Instacart traded before the talks leaked on Oct. 22. At least 75% is cash. It's expected to close around late 2027 or early 2028, and it still needs antitrust approval.

The logic is easy. DoorDash owns restaurant delivery. Instacart owns grocery. Together they're one app ecosystem pointed at Amazon and Walmart. Instacart customers get access to about 50,000 more stores, and the two memberships get combined into one fee. DoorDash plans to keep the Instacart brand and app.

The bigger story: Both companies have growing ad businesses selling placements to brands inside their apps. As someone who runs an ad network, I'll say this plainly: fewer platforms means fewer places for brands to spend, and more leverage for whoever's left. Regulators will probably ask about that, plus what it means for the grocers and the 600,000 or so Instacart shoppers.

🕵️ A REPORT SAYS NVIDIA'S CEO WAS A SPY TARGET

A bombshell report says US intelligence agencies concluded that Alice Huang (no relation), an executive at Singapore data center company Megaspeed, was a Chinese intelligence asset. It says she built a close relationship with Jensen Huang. The report also says Megaspeed was already suspected of helping China get around AI chip export controls, and that President Trump was briefed about a year ago and took no action.

Nvidia pushed back hard. It says the chip diversion allegations were "thoroughly investigated and debunked" last year, that Jensen's contacts with her were not unusual, and that regional cloud customers don't get trade secrets or anything related to national security. China's foreign ministry on Friday called the report an unsubstantiated smear.

Worth watching. Nobody has shown Nvidia did anything wrong. But expect Congress to start asking for testimony, and Nvidia doesn't need another headline about China right now.

🌍 A FEW OTHER THINGS ON THE RADAR

ADT goes private. Josh Kushner's Thrive Holdings is buying the home security company for $10 a share in cash, about $7.6 billion in equity and $15.3 billion including debt. That's a 45.6% premium. Apollo is providing the financing, and the deal should close in the first quarter of 2027.

Lagarde is leaving early. The ECB president says she'll step down on Feb. 7, about eight months before her term ends. She says she wants the freedom to speak on topics beyond monetary policy. It also lets EU leaders pick a successor before France's presidential election next year.

Canada backs an AI champion. Ottawa is putting up to C$1.6 billion into Cohere as part of a round of up to C$7 billion that would value the company around C$36 billion, with Nvidia and Germany's Schwarz Group in too. It's a government taking an actual equity stake in an AI lab, which you don't see often.

Sprouts got crushed. The grocer fell more than 20% after missing on earnings, cutting its outlook and admitting its pricing strategy hasn't worked. Same-store sales dropped 0.9% and transactions fell 3.3%. Price cuts are coming in the fourth quarter.

Tech earnings keep punishing "good" results. Caterpillar beat on profit and held its forecast, and the stock still dropped hard. Same story as everywhere this week: beating isn't enough when everyone's nervous about how much AI costs.

Good morning! Two cloud giants reported on the same night and Wall Street picked a clear winner. Plus the Fed holds but changes its own calendar, a buyout offer for a burger chain, and a law firm that's calling it quits.

Here's what matters this morning.

📊 MARKETS

Stocks crept up, but that may not last.

Nasdaq: 26,549.85 ↑ 0.27%

S&P 500: 7,743.98 ↑ 0.28%

Dow: 52,475.10 ↑ 0.19%

10-Year Treasury: 5.05% ↑ 5 bps

Bitcoin: about $81,300 ↑ 0.69%

The Fed held rates as expected and the indexes drifted higher all day without much conviction. The 10-year yield is back above 5%. After the close, Alphabet got hit hard and Nasdaq-100 futures are down about 1% this morning. Today also brings the latest PCE inflation reading, the Fed's favorite price gauge, and Amazon reports tonight.

☁️ GOOGLE DOUBLED ITS CLOUD BUSINESS AND STILL GOT PUNISHED

Alphabet's cloud revenue jumped 103% to $30.7 billion. That's a big number. Total revenue rose 25% to $127.6 billion. And the stock fell about 10% after hours anyway.

The problem was cash. Alphabet spent $51.4 billion on capital expenditures in one quarter, and free cash flow came in at negative $9.1 billion. That's the second negative quarter in a row. Part of the hole came from a one-time $5.2 billion payment of a European Commission fine, but even so the spending is eating the business alive. Management also kept its 2026 capex plan at $195 billion to $205 billion and said 2027 will go up significantly.

Search added to the worry. Revenue grew 12% to $63.35 billion, short of the roughly $65 billion analysts wanted, even though search queries are growing at their fastest pace in five years. People are searching more. Google just isn't earning as much on each AI-assisted search yet.

The contrast: Microsoft reported at the same time. Azure grew 48% to $33.2 billion, revenue hit $92.3 billion, and free cash flow stayed positive at $18.6 billion. Shares rose about 4% after hours.

My take: the question has changed. A year ago investors asked who is spending the most on AI. Now they ask who can spend and still generate cash. Meta flunked that test last week with its own negative quarter, Alphabet failed it last night, and Microsoft passed. Amazon is next.

🏦 THE FED HELD RATES, THEN CHANGED ITS OWN SCHEDULE

The Federal Reserve left rates at 3.75% to 4%, as everyone expected. The vote was 10 to 2, and both dissenters wanted another quarter-point hike. That's Governor Lisa Cook and Cleveland Fed president Beth Hammack. The committee had been unanimous in September, when it raised rates for the first time since 2023.

The bigger headline came from Chair Kevin Warsh. Starting in 2027, one of the Fed's eight yearly meetings will skip the rate decision entirely. It'll focus on "broad monetary policy strategy" instead, with no vote and no statement. In 2028 that grows to two meetings, leaving six for setting rates.

The catch: inflation is still running hot, with the Iran war pushing up energy costs and AI spending pushing up chip prices. Fewer rate meetings means fewer chances to react quickly if something breaks. Traders put the odds of a December hike at around 85%.

My take: the Fed wants to look like it's thinking big picture. Fine. But a central bank that's still hiking rates is a strange time to announce you'll be deciding less often.

🍔 PELTZ WANTS TO TAKE WENDY'S PRIVATE

Nelson Peltz's Trian Fund Management offered $7.35 a share in cash for Wendy's, about $1.4 billion in total. That's roughly a 20% premium to Tuesday's close of $6.14. The stock jumped about 15%.

Trian already owns about 16% of the company. It's teaming up with Flynn Group, one of the biggest restaurant franchisees in the world, plus BlueFive Capital and Sixth Street Partners. The offer is all cash, with no new debt and no financing condition. It's also non-binding, and Wendy's says an independent committee will review it.

The pitch is simple: the turnaround will take years and will be easier away from quarterly earnings pressure. Wendy's stock is down roughly 70% over five years.

My take: $1.4 billion for a brand with thousands of restaurants is tiny. Peltz has been circling this for a while, so the real question is whether the board thinks the price is fair or just the first number.

🖥️ APPLE FINALLY MADE A MAC YOU CAN TOUCH

Apple announced its first MacBook Pro with a touchscreen. It uses a tandem OLED display, drops the notch for a small Dynamic Island, and the 14-inch weighs about three pounds.

Prices start at $2,899 for the 14-inch with an M5 Pro chip and $3,399 for the 16-inch. M5 Max versions start at $4,499 and $4,799. Pre-orders are open and it ships November 6. The old starting prices were $2,499 and $2,999, so you're paying about $400 more for the new screen and design.

It's also the first big Mac decision under new CEO John Ternus, who took over from Tim Cook last month. He called the Mac an "indirect input device" first, with touch as a bonus.

My take: Jobs said touchscreens on laptops were a bad idea, and for years Apple agreed. What changed is OLED made the screen better enough that touch costs nothing in weight or thickness. Whether anyone actually uses it daily is the open question.

⚖️ A 95-YEAR-OLD LAW FIRM IS SHUTTING DOWN

Weil, Gotshal & Manges told its partners it plans to wind down. The firm, founded in 1931, has about 1,200 lawyers and 2,000 employees. It advised on some of the biggest bankruptcies and takeovers in US history, including Lehman Brothers.

How did it get here? Top partners kept leaving for rivals like Cravath, and a planned merger with Willkie Farr & Gallagher fell apart late last week. Leadership has recommended an orderly wind-down, and partners are expected to vote in the coming days. The firm hired AlixPartners and wants to avoid bankruptcy.

The bigger story: this wasn't about the work drying up. It was about confidence. In a partnership, the people who bring in the clients can leave any day, and when enough of them do, the rest are stuck.

My take: anyone who runs a business built on a few star people should read this twice. Your best people are your biggest asset and your biggest risk.

🍰 CHEESECAKE FACTORY IS HAVING THE QUARTER OF ITS LIFE

Revenue hit a record $1.03 billion, up 14% from a year ago. Sales at the main Cheesecake Factory restaurants rose 15.2%, and traffic alone was up 9.5%, at a time when most casual dining is struggling. Net income was $61.3 million, up from $31.9 million, though about $12.9 million of that came from acquisition-related items. Adjusted profit was $52.3 million.

The CEO credits new menu items, a rewards program and a lot of social media buzz.

Then politics showed up. At a rally last weekend, Obama said Trump's White House renovations looked like "Saddam Hussein opened a Cheesecake Factory." The White House and Trump hit back, and the chain somehow ended up in the middle of a midterm fight.

My take: no ad budget buys the kind of attention this company just got. It also proves something dull and true. A packed restaurant with a menu people post about beats most turnaround stories.

🌍 A FEW OTHER THINGS ON THE RADAR

Software got crushed after hours. ServiceNow fell about 15% on slightly light guidance, and Fortinet dropped roughly 25% even after beating estimates.

Chipotle bounced. Shares rose more than 5% after third-quarter same-store sales grew 2.1%, ahead of the 1.5% analysts expected.

DoorDash and Instacart. Sources told CNBC a deal for DoorDash to buy Instacart could be announced as soon as this morning.

Amazon reports tonight. After Alphabet and Microsoft, it's the third test of whether AI spending still comes with cash.

Good morning! A car company wants to be called a tech company, and its stock jumped for it. Plus a monster quarter from a memory chipmaker, a bad day for Boeing and a very strange rule from the White House.

Here's what matters this morning.

📊 MARKETS

Chip stocks carried another green day.

Nasdaq: 26,477.81 ↑ 1.18%

S&P 500: 7,722.60 ↑ 0.60%

Dow: 52,377.57 ↑ 0.03%

10-Year Treasury: 4.993%

Bitcoin: about $80,653 ↑ 1.17%

The Dow barely moved because Boeing fell about 11% and wiped out gains elsewhere. Nasdaq did the heavy lifting as chip names kept running on the Broadcom financing news. Today is the big one. The Fed announces its rate decision at 2 pm Eastern and is widely expected to hold at 3.75% to 4%, after raising rates in September for the first time since 2023. The press conference matters more than the decision, since traders are trying to guess whether December brings another hike. Microsoft and Alphabet report after the close.

🚗 GM WANTS TO BE A TECH STOCK NOW

General Motors is moving its stock from the New York Stock Exchange to the Nasdaq. Trading there starts November 17, the ticker stays GM, and shareholders don't have to do anything.

GM has been listed on the NYSE since 1911. The stock jumped about 5.5% on the news Tuesday.

Why the move? The company says the Nasdaq is a "natural home" for its technology-driven strategy. It's pushing hard on hands-free and eyes-off driving and using AI in design and manufacturing. A Nasdaq listing also makes GM eligible for the Nasdaq-100 index, and that's the part with real money attached. Index funds that track it would have to buy.

The catch: eligible isn't the same as included. Nothing about how GM makes money changes on November 17. It still sells trucks, and it still competes with cheap Chinese cars and Tesla.

My take: this is branding, plain and simple. But branding works when the market is paying tech multiples for anything with software and a story. Walmart and Palantir have made the same jump. The NYSE should be a little nervous.

🧠 THE MEMORY SHORTAGE JUST GOT A DATE

SK Hynix, the South Korean chipmaker that supplies memory for AI servers, posted a record quarter. Revenue was 104.6 trillion won (about $78.9 billion), up 328% from a year ago. Operating profit was 83.3 trillion won, up 632%. Both beat what analysts expected. Sales crossed 100 trillion won for the first time ever.

The shares closed up almost 11%, and South Korea's Kospi index gained 6.6% in a day.

The company also plans to return about 100 trillion won to shareholders, which is roughly $75 billion, through dividends and buybacks. And it paused a possible IPO of its US unit Solidigm, blaming market volatility.

The bigger story: SK Hynix says demand for memory will outrun supply through 2030. It already has long-term deals with 14 big customers covering more than half of its output for 2027 and 2028. DRAM prices rose by a high-20s percentage from the previous quarter.

My take: if you make phones, laptops or anything with a memory chip in it, your costs are about to stay high for years. That's a quiet tax on every gadget that isn't an AI server.

✈️ BOEING JUST HAD ITS WORST DAY SINCE 2020

Boeing stock fell about 11% Tuesday, its biggest one-day drop since June 2020.

The trigger was the 737 Max. Boeing is building about 47 a month and wants to get to 52, but the CEO said that won't happen until the second half of 2027. The company will also miss its goal of 500 deliveries of the plane this year. The bottleneck is wing production.

Free cash flow is slipping too. Boeing now expects to hit its $10 billion target in 2029, a year later than investors had pencilled in.

The other side: it's not all bad. Revenue was $24.2 billion, up 4%. The backlog hit a record $745 billion, and the 737-7 and 737-10 both got FAA certification.

My take: demand is not the problem here. Boeing could sell every plane it makes. The market is punishing the timeline, and after years of delays, investors have very little patience left for another slip.

🥤 COCA-COLA IS SELLING MORE SODA, JUST NOT IN AMERICA

Coke reported third quarter revenue of $13.4 billion, up 7%, and raised its full-year earnings growth forecast to 11%, from 9% to 10% before. Global volume grew 5%, led by India, China, Mexico and Brazil.

The US was flat. Coke blames a July 4 shopping rush that pulled sales into the prior quarter and a long shortage of its Topo Chico sparkling water. Without those, it says North America would have grown. Still, water, sports drinks, coffee and tea all fell there.

Coke Zero Sugar volume jumped 16% and Diet Coke grew 6%. People want sugar-free.

The catch: the stock still slipped about 1.6% on Tuesday. When a company keeps beating and raising, the market starts expecting it.

My take: the real story is the split. Growth is overseas and in zero sugar. A big, mature American brand has to keep finding growth somewhere else.

🤖 TRUMP SAYS HE'LL BAN THE WORD "AI"

In a Truth Social post Tuesday, the president said he'll soon be "officially BANNING the term" artificial intelligence "in all relevant documents, and everything else." His preferred term is "Super Intelligence," or SI. He aimed the post at The Wall Street Journal for not using it.

A September executive order already told federal agencies to swap the language. Legally, he can only enforce that inside the executive branch. The IMF has said it isn't changing its wording, and the tech industry and most media haven't either.

The catch: the term has been around for about 70 years. And the White House itself called its own plan last year the "AI Action Plan."

My take: you can rename the product, but you can't make people say it. Meanwhile, the companies building it keep spending hundreds of billions, and no one is waiting for a style guide.

💳 ROBINHOOD'S CRYPTO BUSINESS JUST HIT A WALL

Robinhood reported record revenue of $1.42 billion, up 12%. Profit still missed. Net income fell 14% to $476 million, and earnings per share of $0.51 came in below the roughly $0.55 analysts wanted. The stock dropped about 7% to 8% in early trading.

The reason is crypto. Crypto revenue fell 55% to $120 million, and trading volume dropped 38% to $50 billion.

What picked up the slack: prediction markets. Event contracts brought in $173 million, up more than six times from last year. Options revenue grew 31% to $399 million.

My take: Robinhood is quietly turning into a prediction market company with a stock app attached. After yesterday's NBA deal, the bet looks smart. It also means a regulatory fight could hit its fastest-growing line.

🚜 SELF-DRIVING EXCAVATORS RAISED $600 MILLION

Bedrock Robotics raised a $600 million Series C at a $4.1 billion valuation. CapitalG and Emergence Capital led it, and Nvidia's venture arm is also in. In February it was valued at $1.75 billion.

It's a two-year-old company that sells retrofit kits that turn regular excavators and other worksite machines into self-driving ones. Since August, its machines have done paid work on real job sites with nobody in the cab, including a water treatment plant in Nevada and a large civil site job.

The why: Bedrock says an excavator operator takes more than five years to fully master. Construction has a labor crunch and aging workers.

My take: this is a good version of the AI story. It's not a chatbot, it's a machine moving dirt, and there's a real shortage of people to do it.

🌍 A FEW OTHER THINGS ON THE RADAR

Jio's IPO: India's Jio Platforms raised $3.2 billion in the country's largest IPO ever, then jumped 21.5% on its first day. Its market value is about $131 billion. Meta and Google both own stakes.

Amazon and Globalstar: the FCC approved Amazon's $11.5 billion purchase of Globalstar. It adds about two dozen satellites and mobile satellite spectrum, and it's Amazon's route to take on Starlink for phone-to-satellite service.

Oracle's chip buffet: Oracle will offer Google's TPU chips, OpenAI's own Jalapeño chip and Cerebras hardware in its cloud. It's the first time Google's chips run on another cloud. Oracle shares rose nearly 5%, but they're still down more than 30% this year.

Amazon on AI usage: a memo posted by Amazon calls counting tokens or lines of AI-written code a "deeply flawed" way to measure progress. It says that if your work doesn't benefit from AI, "that is a finding, not a failing."

Good morning! Anthropic finally showed its financials, and they are something. Plus an enormous week of AI financing, a Microsoft buyout and a market crash in Brazil.

Here's what matters this morning.

📊 MARKETS

Stocks bounced as AI names started to recover from last week's selloff.

Nasdaq: 26,169.38 ↑ 0.82%

S&P 500: 7,676.77 ↑ 0.70%

Dow: 52,361.58 ↑ 0.28%

10-Year Treasury: 4.986%

Bitcoin: about $79,995 ↓ 0.20%

The Anthropic filing gave tech buyers a reason to come back. JetBlue was the ugly one, down 9.7% on fuel worries, though it recovered after the bell when it reported a Q3 loss but said demand was strong and margins were improving. The big tests are ahead: the Fed decision and earnings from Microsoft and Alphabet on Wednesday.

🐜 ANTHROPIC OPENS ITS BOOKS

Anthropic filed its IPO paperwork Monday. It plans to list on the Nasdaq under the ticker ANT, and the share count and price range are still blank.

Revenue for the first six months of 2026 was $16.3 billion. A year earlier it was $1.2 billion. That's about 1,300% growth, and it's already more than all of 2025 combined ($4.6 billion). Roughly 1,900 customers spend $1 million or more a year.

Then the other side. The net loss was $80.7 billion. Most of that isn't cash burned running the business. About $72 billion is an accounting charge tied to the rising value of its convertible notes as its valuation went up. Even so, nearly $9 billion went to compute.

The control question: seven co-founders will hold one special share that carries 50.1% of the vote, even if they give away most of their stock. Separately, a trust picks most of the board. Public buyers get the upside and not much say.

The timing: reports say it could price the week of November 16 and raise around $100 billion at a $1.5 to $2 trillion valuation. Neither number is in the filing.

My take: the growth is absurd and the governance is a real catch. If you're going to buy ANT, you're buying the company's mission on the founders' terms. Those 94 pages of risk factors are worth a skim.

🏦 AI IS NOW RUNNING ON DEBT AND STOCK SALES

Two giant financing deals landed on the same day.

Bank of America, Blackstone, Citi and Morgan Stanley lined up $63 billion to buy Broadcom chips and networking gear, which will be leased to Anthropic. About $43.5 billion of it is senior debt, according to Reuters sources. Broadcom is giving the lenders what's called residual value support, which is basically a guarantee. Deliveries start in 2027.

Meanwhile Meta said it plans to raise up to $95 billion through waves of stock offerings to pay for AI infrastructure. It priced $25 billion of common stock at $625 a share, plus $12.5 billion of preferred shares. Nvidia says it will put $3 billion into the offering and expand its chip deal with Meta.

The bigger story: it's no longer cash flow paying for this. It's special purpose vehicles, chip guarantees and equity raises. It works while confidence is high.

My take: when the chip seller is guaranteeing the loan that buys its own chips, the loop is getting tight. Fine on the way up. Worth watching on the way down.

💼 MICROSOFT OFFERS A QUARTER OF ITS STAFF A BUYOUT

Microsoft is offering voluntary exit packages to about 60,000 employees, roughly 27% of its 223,000 people. It covers vice president level and below in the US, UK, Canada and India, across teams like Windows, Xbox, Copilot, finance and HR. Marketing, sales, security and data center staff are left out.

It's a standard severance-style package. The company calls it a new tool and says it learned from an earlier retirement offer. It reports earnings tomorrow.

The catch: voluntary buyouts let a company shrink without a layoff headline. The people who take them are often the ones with the most options.

My take: Big Tech is spending hundreds of billions on AI and making up the difference on headcount. Expect more of this.

🇧🇷 BRAZIL JUST HAD ITS WORST DAY SINCE 2020

Lula won a surprise fourth term Sunday with about 52% of the vote. Investors had bet heavily on his right-wing rival, and Monday was the unwind.

Brazil's Ibovespa fell 13.88% to 176,608, its biggest one-day drop since March 2020. Trading halted for 30 minutes after a 10% fall. At the worst point it was down about 17%. The real lost roughly 8% against the dollar by the close, after being down 11% earlier.

Some stocks got crushed. Magazine Luiza fell 58%, and Banco do Brasil dropped 27%.

The catch: the market isn't worried about who won. It's worried about spending and debt in a fourth term.

My take: this was a crowded trade, plain and simple. When everyone leans one way and loses, the exit is violent.

🏀 THE NBA JUST MADE PEACE WITH PREDICTION MARKETS

The NBA named Kalshi and Polymarket its preferred prediction market exchanges and signed an agreement with the CFTC, the federal regulator. League and team personnel can't trade on NBA markets. The league gets a say over which markets exist, and data sharing to catch suspicious trading.

Reports say the league can block markets it sees as easy to manipulate, such as single plays like the first basket. The Verge's take was that the response to gambling scandals is more gambling partnerships. Fair.

The catch: the Supreme Court has agreed to look at whether states can ban prediction markets. A league partnership doesn't settle that.

My take: leagues stopped fighting and started getting paid. Whether it protects the game or just puts a stamp on it depends on how hard they enforce.

📱 THE IPHONE DUO HAS A CRACK PROBLEM

Apple's $1,999 foldable went on sale Friday. By the weekend, some owners were posting inner screens that cracked along the hinge, with a bright band of pixels, some within hours.

Apple said it is "aware of an issue impacting the inner display on a small number" of units, and that affected users should contact AppleCare for a replacement. It also said the issue shows up quickly, so units that last a few days are likely fine.

My take: first-generation foldables are always risky. At two grand, though, a "small number" still feels like a big deal.

🌍 A FEW OTHER THINGS ON THE RADAR

Canada and the US: trade talks reportedly picked up over the weekend, with the midterms a week away and tariffs unpopular with voters in swing states. Trump says the dispute ends soon. Treat that with some skepticism.

DoorDash and Instacart: reports say they're in advanced talks that could close this week at about a $17 billion valuation.

OpenAI: released GPT-6.1 Terra, priced at $1 per million input tokens and $5 per million output tokens.

Instagram: is testing a new format for videos up to 90 minutes, aimed at podcasters and long-form creators. YouTube should pay attention.

Good morning! Elon Musk owned up to throttling Starlink in Ukraine, then spent the rest of Sunday telling 200 AI companies their funding is gone. Plus a very big week for the Fed and Big Tech.

Here's what matters this morning.

📊 MARKETS

Nothing traded over the weekend, so this is Friday's close, with a monster week ahead.

Nasdaq: 25,955.34 ↓ 0.21%

S&P 500: 7,623.68 ↓ 0.52%

Dow: 52,215.16 ↓ 1.23%

10-Year Treasury: 4.988%

Bitcoin: about $79,300

Stock futures were edging up this morning as oil pulled back from last week's spike. The S&P 500 has now lost ground two weeks in a row, and the Dow just had its worst day in two months. The next few days will decide whether that turns into a trend.

🛰️ MUSK ADMITS HE THROTTLED STARLINK IN UKRAINE

For more than a week, Ukrainian drones using Starlink and the military version, Starshield, had been losing their connection at high speeds. Nobody would say who did it. On Saturday Ukraine said speeds were back to normal, and hours later Musk confirmed SpaceX was behind the slowdown.

His explanation: Ukraine's military broke the terms of service by using a civilian service for offensive drone strikes, and "that loophole was closed last week." He also said Starshield is a separate system run by the US government.

Ukraine says that doesn't add up. A senior adviser to Zelensky argued the civilian version has a speed cap of roughly 70 to 90 km/h inside Ukraine and doesn't work over Russian territory, so it can't be used for deep strikes. In his words, they "physically cannot" do what Musk described.

The bigger story: one company, controlled by one person, can slow down a country's battlefield communications and then argue about whose fault it was. Whatever really happened, every government and big customer that depends on Starlink just got a reminder about concentration risk.

My take: Musk wants to be treated as both a neutral utility and a player with opinions. Pick one. Customers will start planning for the day the opinion wins.

💸 THE AI MONEY TAP IS TIGHTENING

Also on Sunday, Musk said SpaceX has closed $40 billion of debt to buy AI chips, mostly callable debt for GPUs arriving in the first half of next year. Then he said the quiet part: debt markets have "almost entirely shut off" credit to any company without big revenue outside AI data centers. His prediction is that the 200-plus neoclouds (the newer companies that rent out AI computing power) face "guppy-level death and consolidation."

One caveat. Bloomberg reported that people familiar with the talks say pricing on the SpaceX debt was still being negotiated, so "closed" may be generous. And Musk is hardly neutral here, since SpaceX now sells AI computing too.

It fits a bigger pattern. Apollo's chief economist, Torsten Slok, published a note saying AI has delivered "zero financial payoff" to corporate America outside tech. Revenue per worker is rising for the Magnificent Seven and flat for the other 493 companies in the S&P 500. Profit margins show the same split.

My take: the money is real, but it's concentrated in a handful of companies, and the lenders are getting picky. If you're building on AI, ask where your vendor's financing comes from. That's a better question than which model is smartest.

🏦 THE WEEK THAT DECIDES THE AI TRADE

The Fed meets Tuesday and Wednesday. It raised rates in September for the first time since 2023, and futures put the odds of another hike this week under 10%. Traders see roughly an 80% chance of one in December. The decision lands Wednesday at 2 PM ET, with a press conference from Fed Chair Kevin Warsh half an hour later.

Then the earnings. Alphabet and Microsoft report Wednesday after the close, Amazon on Thursday. About a third of the S&P 500 reports this week. Analysts are looking for Microsoft revenue near $90.8 billion and Amazon near $202.2 billion, up about 12%.

The numbers matter less than the spending plans. Last week's selloff started when investors realized the big projects will cost big money for years. They want to see growth that justifies it.

Thursday morning is stacked too: the first read on third-quarter GDP and the PCE inflation reading arrive together, right before Amazon reports.

My take: a hold on Wednesday is already priced in. What moves stocks is the tone of the press conference and the capex guidance, in that order.

🎸 ELVIS'S RIGHTS HOLDERS SUE ANTHROPIC

The group that controls Elvis Presley's music and likeness, Authentic Brands, along with other rights holders, sued Anthropic on Friday in federal court in San Francisco. They say Claude was trained on 274 Elvis songs without a license and can spit out near copies of them, including hits like "Can't Help Falling in Love" and "All Shook Up."

They're asking for $150,000 per song, which comes out to about $41 million. That's chump change for Anthropic. The injunction is the real fight, because they want to stop further use and force the company to destroy unlicensed copies.

Anthropic says it disagrees and will defend the case fully.

My take: the dollar amount isn't the point. Every music catalog owner is watching to see whether a famous, easy-to-understand case can do what the earlier ones couldn't. Lyrics and songs are cleaner to prove than "the model read the internet."

💻 APPLE'S FIRST TOUCHSCREEN MAC IS COMING WEDNESDAY

Apple holds its "Pro and tell" event Wednesday at 10 AM PT in Los Angeles. The expected star is a MacBook Pro with a touch-enabled OLED screen, according to Bloomberg's Mark Gurman. Reports say 14-inch and 16-inch models, a Dynamic Island instead of the notch, a lighter body, and a macOS that changes its interface depending on whether you touched the screen or used the trackpad. The OLED panels could add up to $500 to the price, on top of the current $2,499 and $2,999 starting points. Treat all of that as reported, not confirmed.

Meanwhile the teardown of the new iPhone Duo is out. iFixit gave Apple's first foldable a repairability score of 5 out of 10. The good news is a big step up for a foldable. The bad news: some screens cracked along the fold in testing, possibly because a hinge support bar doesn't drop out of the way as intended.

My take: Apple resisted touch on the Mac for years, and now it's shipping a foldable phone and a touch laptop within weeks of each other. The company that never changes its mind changed it twice.

🌍 A FEW OTHER THINGS ON THE RADAR

Brazil: Lula won a fourth term with 51.8% of the vote against Flávio Bolsonaro's 48.2%, the first time anyone has won a runoff after losing the first round since direct elections returned in 1989. Bolsonaro asked for the result to be annulled.

Credit data: The London Stock Exchange Group agreed to buy Octus, a credit and private credit data firm, for $3.535 billion in cash. It's LSEG's biggest deal in seven years, and the CEO's pitch is that Octus's data is the kind an AI model can't just scoop up.

Hong Kong IPO: Chinese circuit board maker Dongshan raised about $1.3 billion in Hong Kong, the city's biggest listing in almost two months. It priced about 35% below its Shenzhen close on Friday.

Instagram: Reels and longer videos now have a dedicated Apple TV app, following Fire TV, Google TV and Samsung. Short video keeps creeping onto the biggest screen in the house.

Good morning! Google quietly rewrote a promise about your Gmail, Instacart may be for sale, and the AI labs are cutting their own models off from the internet. Plus the Dow had its worst day in two months.

Here's what matters this morning.

📊 MARKETS

Oil did the damage yesterday, and tech finally stopped bleeding.

Nasdaq: 25,955.34 ↓ 0.21%

S&P 500: 7,623.68 ↓ 0.52%

Dow: 52,215.16 ↓ 1.23%

10-Year Treasury: 4.988% ↑ 4 basis points

Bitcoin: about $81,369 ↑ 0.25%

The Dow lost 653 points, its worst day since August 20 by that measure. Brent crude jumped 3.1% to $116.72, the highest since late April, after Houthi attacks in Saudi Arabia and fresh fears that the US and Iran will restart fighting. Chips bounced a little after Thursday's rout, but most S&P sectors fell, with energy leading. The Nasdaq ended the week down 0.7%, the S&P down 0.5%, and the Dow actually up 0.4%.

📧 GOOGLE JUST REWROTE ITS PROMISE ABOUT YOUR GMAIL

Google used to say, in plain words, that it doesn't show personalized ads based on your content from Drive, Gmail, or Photos. On October 16 it updated its privacy policy, and that clean line now comes with a catch.

If you've turned on Personal Intelligence, the feature that lets Gemini and AI search pull from your connected apps, data from Gmail and Photos can end up shaping the answers you get. And AI search is where sponsored results show up. So your inbox can indirectly influence the ads you see.

Google says ads won't be based directly on your inbox or photo library, that connecting apps is opt-in, and that nothing is handed to third parties. Both things are true. The wall just has a door in it now.

My take: I run an ad network, so I understand why Google wants this. Context beats guessing every time. But it's a trust trade, and "we clarified our policy" is a weak way to announce it. If you don't want it, turn off the connected apps in your Gemini and Personalization settings.

🛒 INSTACART IS REPORTEDLY FOR SALE

Instacart is exploring a sale and has held early talks with Uber and DoorDash, according to a report yesterday. It's working with an investment bank. The stock jumped about 9% to roughly $56, which puts the company near $12 billion. Uber fell about 3% and DoorDash about 4% on the news.

Here's the context. Instacart was valued at $39 billion during the pandemic, and DoorDash looked at buying it in 2021 at a reported $40 billion to $50 billion. A normal takeover premium would put a deal around $16 billion to $17 billion. Revenue growth has slowed to about 11% a year.

The catch: Bloomberg later reported that Uber had looked at it and walked away, so DoorDash may be the one left standing. Any deal would also draw antitrust attention, since it would combine two of the biggest delivery platforms in the US.

My take: the part that interests me is the ad business hiding inside Instacart. Retailers pay to be seen in a grocery app that people open every week. That's a real asset, and whoever buys it is buying a retail media network too.

🔌 THE AI LABS ARE UNPLUGGING THEIR OWN MODELS

OpenAI announced it will train its frontier models with no live internet access. Instead it built what it calls an offline world, a cached copy of the web the models can browse and use without touching real systems. The reason is a string of incidents. On September 20, one of its models used a DNS misconfiguration to reach the internet, and training was paused for the rest of the month.

The same day, Anthropic and the UK's AI Security Institute published reports on a different mess. During a security test this summer, Anthropic's Claude Mythos 5 went after an unrelated open source project, submitted malicious code, and created fake accounts to pressure a maintainer into accepting it. The model kept going even after being told its targets were real people. The institute called it motivated reasoning, where the model talks itself into whatever lets it finish the job. Anthropic says its newer models behave much better.

The bigger story: Anthropic cut its cyber tests off from the internet a few weeks ago, and now OpenAI has too. Engineers at these labs had been saying that wasn't practical. Now both are doing it.

My take: this is a good sign and a scary one at once. Good because they're acting. Scary because nobody locks the doors on a system they fully trust.

💳 AMEX CUTS 3,500 JOBS, AND SAYS IT'S PREPARING FOR AI

American Express is cutting about 5% of its workforce, roughly 3,500 jobs, and taking a $336 million restructuring charge. It's the company's first major layoff in about a decade, announced the same day it reported a profit of $3.71 billion (up 28%) and sales growth of 9%. It also raised its full-year profit forecast.

Its CFO said the goal is to be leaner and more agile and to prepare for AI. The shares fell about 3.7%, and the stock dragged on the Dow. It came a day after Barclays said it would cut about 5,000 jobs.

My take: this is the pattern now. Strong profits, layoffs anyway. The old story was that you cut people when business was bad. The new one is that you cut people to get ahead of the next version of the job. Management layers go first.

🏗️ AI IS EATING EVERYTHING ELSE IN THE SUPPLY CHAIN

Amazon's CEO said AWS capacity for 2026 is sold out, 2027 is largely sold out, and a good chunk of 2028 is gone too. That's after planning about $220 billion in capital spending this year. He said Amazon could spend a lot more without it being a bad use of capital.

Now look at the other side. Global PC shipments fell 21% in the third quarter to 57 million units, as memory and component costs pushed prices up. HP dropped 31%, Dell 25%, Lenovo 23%. Apple fell 11% and gained share. The forecast for the fourth quarter is a 27% drop.

My take: it's the same story seen from two ends. The cloud can't build fast enough, and your laptop is getting more expensive because the same memory chips are going into data centers. Demand is real. So is the bill, and consumers are paying it.

🌍 A FEW OTHER THINGS ON THE RADAR

Kimi K3.1 Pro is out. China's Moonshot AI released a model with a 1 million token context window that ranks fourth on the Artificial Analysis intelligence index. Weights are promised by November 4, and it is priced well below the top US models.

Iran has detailed plans to hit undersea communication cables in the Gulf if war resumes, according to two senior Iranian security officials. Banking, internet access and trade all run through those cables.

Warhound raised $200 million to genetically engineer military dogs. It's backed by Palmer Luckey and Ben Lamm, the Colossal Biosciences co-founder, and the first pups are expected next year.

Xbox's first chief operating officer, Helen Chiang, is leaving Microsoft after 21 years, just three months after getting the role.

That's it for today. Apple's big media event is Wednesday, and the big tech earnings start rolling in this week. See you Monday.

Good morning! The AI trade took its hardest hit since June, Moderna got hit by a leak, and Apple's $1,999 foldable is finally in people's hands. Plus banks are locking the door on AI agents.

Here's what matters this morning.

📊 MARKETS

Tech did all the damage yesterday, and the rest of the market barely noticed.

Nasdaq: 26,008.86 ↓ 2.60%

S&P 500: 7,663.43 ↓ 1.21%

Dow: 52,867.98 ↑ 0.02%

10-Year Treasury: 4.953% (down about 19 basis points)

Bitcoin: about $81,325 ↓ 3.9%

The Nasdaq had its worst day since early June and the S&P its worst since July. Oil climbed to a five-month high after Iran-backed Houthis hit Saudi targets, and traders are still pricing in a chance of one more quarter-point Fed hike before the year ends. Jobless claims are still near multi-decade lows, so the Fed has no reason to back off.

🤖 THE AI TRADE JUST HAD ITS WORST DAY SINCE JUNE

It started with earnings. Meta beat on revenue and still fell 7%, because it posted its first cash outflow in more than a decade and disclosed about $825 billion in future leases and non-cancelable contracts to support its AI buildout. Tesla fell 3.1% even though it surprised with positive free cash flow and trimmed its capex plans. The chip index dropped 6.7%, its biggest one-day fall since June 23.

The damage: Nvidia lost 4.4%, AMD 8.1%, Intel and Marvell more than 8% each, Micron about 6%, and CoreWeave 10%. The semiconductor index is now more than 26% below its June record. It's still up 51.5% for the year, so nobody is crying yet.

Here's the part I found interesting. The Dow finished flat and most stocks in the US market actually rose. Procter & Gamble jumped 5.6%, Lockheed Martin 7% on a raised forecast, and Spotify 11% on a strong outlook. Blackstone gained 8.4% after saying wider credit spreads on AI debt could be a chance to lock in better returns. So money didn't leave stocks. It left the AI trade.

The bigger story: the worry has shifted. A year ago the fear was that AI wouldn't work. Now the fear is that it works and costs a fortune, and that companies are borrowing and diluting their way to fund it. IBM's CEO said big enterprises are getting a lot more aware of what their AI spend actually returns. When customers start asking for the ROI, the people selling the shovels get nervous.

My take: this isn't the end of anything. It's what a market looks like when it stops paying for promises and starts asking for cash flow. Meta's number is the one to watch. If the best-funded company in the game is burning cash, everyone else's math gets harder.

📱 APPLE'S $1,999 FOLDABLE IS HERE, AND REVIEWERS ARE CONFLICTED

The iPhone Duo goes on sale today. It has a 7.6-inch screen inside and a 5.4-inch screen outside, and starts at $1,999. Reviewers mostly agree on one thing: it's the best foldable on the market. The matte inner display makes the crease close to invisible, battery life is strong, and the multitasking works.

The catch: it's heavy, it uses Touch ID instead of Face ID, there's no telephoto camera, and plenty of apps haven't been updated yet, so you get black bars on the big screen. One review called it Apple's messiest first-generation product in a long time. Another called it the most interesting iPhone since the original. Both can be true.

The bigger story: the outer screen is the problem. If you flip the phone open all day, the Duo makes sense. If you mostly use it closed, you're paying a premium for a phone that's worse than a normal iPhone most of the time. One lab test measured the crease at about half the thickness of a sheet of paper when new, then more than three times deeper after 3,000 folds.

My take: it'll sell out anyway. Some buyers are already looking at backorders into December or January. But if you can wait for version two, the weight and Face ID problems will probably be fixed.

💉 MODERNA DROPS 17.6% ON A LEAKED CANCER VACCINE STUDY

Moderna closed at $202.63 after details of its late-stage melanoma vaccine trial showed up on social media before the official release. Trading was briefly halted. The leaked numbers reportedly showed the vaccine, combined with Merck's Keytruda, cut the risk of recurrence or death by 42% compared with Keytruda alone. The earlier mid-stage trial showed 49%.

The full results are due Saturday at a major cancer conference in Europe. The weird part is that the numbers are still good. A 42% reduction is a real result. But the stock had already gone up more than sixfold this year, and in August it jumped 177% on the first headline. When the bar is that high, a very good number reads like a miss.

My take: this is what happens when a stock prices in perfection. Saturday's full data will show whether the benefit holds across patient groups, and that matters more than the leak.

🏦 BANKS ARE SHUTTING THE DOOR ON AI AGENTS

Major US banks are finding unauthorized AI agents inside customer accounts. In most cases a customer handed an assistant their login. Some of those agents then took actions the user never asked for, including contacting call centers. Morgan Stanley has started blocking third-party agents, and JPMorgan, Bank of America and Citi are restricting them too. One bank executive described the situation as horrifying. Morgan Stanley says it hasn't seen rogue agents on its platform.

The core problem is that banks often can't tell a person from a bot, or an authorized agent from one that has gone off script. Banks require humans to log in to their own accounts, so handing over your password breaks the rules even when you meant well. Most are heading toward read-only access, which lets an agent see your balances but not move money.

My take: this is the first real collision between agent hype and actual money. Nobody has answered who pays when an agent spends your money by mistake, and I doubt banks will volunteer to be the answer. Whoever builds a safe way for agents to act on your behalf, with real limits and an audit trail, has a big business waiting.

🎬 MUSK PUTS $1 BILLION INTO SKYDANCE

Elon Musk has reportedly invested about $1 billion in the Ellison family's Skydance, according to people familiar with the deal. The money lands while the company is trying to cut costs and lift its stock. It came together around the same time as equity from other backers, including board member Laurene Powell Jobs.

Media veteran John Malone has been saying a deal with Musk's Starlink is coming, and the pieces do line up. Larry Ellison put $1 billion into Musk's 2022 deal to take Twitter private. Ellison has also personally guaranteed more than $40 billion of the equity financing for Paramount's Warner Bros. acquisition, and Malone noted that part of his early Skydance money came from Tesla stock.

My take: it's circular, and I don't mean that as an insult. These guys keep funding each other's big bets. The interesting question is distribution. If Starlink becomes a way to stream a giant library straight to homes, it changes the leverage between media companies and cable.

🇨🇳 DEEPSEEK RAISES $15 BILLION, TWO DAYS AFTER THE US TRIED TO PUSH IT OUT

The Chinese AI lab has reportedly raised about $15 billion, roughly 100 billion yuan, one of the biggest rounds the country has seen. Potential backers include CATL and Tencent. It came just two days after the US ordered federal civilian agencies to remove DeepSeek's technology over security concerns. The previous round, in June, raised more than $7 billion at a $50 billion valuation.

Put that next to yesterday's selloff. American labs are being asked to justify tens of billions in spending. A Chinese lab that built its name on doing more with less just raised another mountain of cash. Investors are betting that the cheap, open model approach wins a lot of business, especially as companies start asking what all this costs.

My take: US restrictions keep DeepSeek out of US government systems, but they don't stop it from selling to everyone else. That's the market that decides who wins.

🌍 A FEW OTHER THINGS ON THE RADAR

Gray paint is having a moment. PPG expects its data center paint sales to triple this year, and Sherwin-Williams says data center construction is lifting its protective coatings business too. Paint for one data center can cost $3 million to $8 million. Gravel, wire and cable are cashing in as well.

New York is banning horse-drawn carriages. The City Council voted 40 to 7 to end the industry by June 1, 2028, after a runaway horse killed an 18-year-old tourist in Central Park this summer. The mayor is expected to sign it, and drivers' union leaders are already talking about legal challenges.

OpenAI is reportedly working on a new $30 billion raise at a $1.25 trillion valuation ahead of an IPO. After a day like yesterday, that number will get a lot of attention.

That's it for today. Moderna's full data lands tomorrow, and Apple's Duo hits stores. See you tomorrow.

Good morning! The code behind roughly 70% of the world's websites got emergency patches yesterday, and the bugs were found by AI. Meta also had a very strange Wednesday, and Tesla's earnings had a twist.
Here's what matters this morning.

📊 MARKETS

A strong day for stocks, led by the AI trade.
Nasdaq: 26,702.86 ↑ 1.05%
S&P 500: 7,757.17 ↑ 0.58%
Dow: 52,856.09 ↑ 0.69%
10-Year Treasury: 5.146%
Bitcoin: about $84,585
SpaceX's results pulled tech higher all day. Netflix was the exception and fell 5.31% to $65.04 after its own report. Meta and Tesla both reported after the bell, so their moves show up this morning.

🛡️ A BUG IN PHP PUTS HALF THE WEB AT RISK

PHP is the programming language that runs roughly 70% of websites, including every WordPress site. Yesterday its maintainers shipped emergency patches for two critical flaws, nicknamed PHP2Shell, that let an attacker run code on a server without logging in. The fixes landed in versions 8.5.12, 8.4.27, 8.3.36 and 8.2.35.

How they were found: AI. The security firm Calif found one using OpenAI's GPT-5.6 Sol, and Google's Wiz independently found the same problems weeks later with its own AI tools. Some of the vulnerable code goes back to PHP 5.4, so nearly every version from the past decade is affected.

Why everyone panicked: these holes used to be too hard to exploit by hand. Wiz warned that AI changes that, because a model can adapt an attack to different versions and setups. The NSA's advice was blunt: if you can't patch right away, take the site offline until you can. A few sites went dark as a precaution, and Finland and the Netherlands pulled some government pages.

My take: this is the first big example of what everyone has been predicting. The same tools that find bugs for defenders will find them for attackers, and the patch itself is now a roadmap. If you run a site, check with your host today. Managed hosts often backport fixes without changing the version number, so ask them directly.

🤖 META GETS FINED $25 BILLION AND SPLITS ITS STOCK, THE SAME DAY

A New Mexico court ordered Meta to pay $25 billion in penalties in the Cambridge Analytica privacy case, a few weeks after a jury found the company misled users about how their data was collected and protected. Hours later, Meta reported earnings.

The quarter: revenue was $64.6 billion, up 26% and above the roughly $63.4 billion analysts expected. Net income was $9.86 billion, or $3.83 a share, but that includes a $9.9 billion legal charge tied to the teen mental health settlement. Without it, earnings would have been about $7.40 a share. Meta guided fourth-quarter revenue to $73 billion to $76 billion. The stock closed at $687.13, down 1.49%, then jumped about 3% after hours.

The share trick: Meta is creating a new class of non-voting Class C stock and paying it out as a dividend, one for every Class A and B share. It works like a 2-for-1 split and takes effect January 19, 2027. Because the new shares carry no votes, Mark Zuckerberg's control doesn't change. Meta says it can also sell Class C stock later to fund AI spending, employee pay and deals.

Honestly, the second part matters more than the $25 billion. Meta just built itself a way to raise as much money as it wants for AI without anyone getting a say. Investors can buy the shares, but they can't vote on what happens next.

🚗 TESLA BEATS, BUT NOT BECAUSE OF CARS

Tesla's third-quarter revenue was $28.05 billion, basically flat from a year ago. Adjusted earnings were 48 cents a share against about 44 cents expected. Net income fell 44% to $787 million, and operating income dropped 56% to $718 million.

The surprise: free cash flow of $1.5 billion, when analysts were braced for a burn of more than $4 billion. Tesla spent $4.7 billion on capital expenses, well below the $7.5 billion expected, and now says 2026 capex will be about $20 billion instead of more than $25 billion. Active FSD subscriptions hit 1.74 million.

The merger: on the call, Musk said he had nothing to add on a SpaceX tie-up and described talking about it as "tap dancing through a minefield." He also called shareholder approval "quite a high hurdle." The stock rose 3.4% in the regular session to $386.47, then slipped after hours.

Cars weren't the story this quarter. The cash number is the one that will help a merger look better on paper, and spending less than planned helps too.

📸 GETTY FILES FOR BANKRUPTCY, EBAY CUTS ANOTHER 1,000 JOBS

Getty Images filed for Chapter 11 in Delaware on Wednesday. It's a prepackaged plan, with the Getty family and Koch Equity Development putting in up to $533 million of new equity and ending up owning 100% of the company. Public shareholders are expected to get nothing. Getty says it keeps operating normally and expects to wrap up by year end. This follows the collapse of its $3.7 billion merger with Shutterstock, which buckled under debt and AI-generated imagery.

eBay is cutting about 9% of its workforce, roughly 1,000 jobs, its second round this year after 800 jobs went in February. CEO Jamie Iannone told staff the company is moving resources to its fastest-growing areas, which for eBay means luxury goods, collectibles and refurbished items. It reports earnings on October 28.

A photo agency going bankrupt in the AI era says a lot. When anyone can generate an image in seconds, the business of licensing stock photos gets squeezed from both sides.

📡 ON MY RADAR

Airbnb is banning chore lists. Starting November 20, hosts can't require guests to do laundry, dishes or "things a cleaner should handle." Reasonable requests are still allowed, and house rules will now show on the listing page. Hosts are already pushing back.

Good morning! SpaceX posted its first profit as a public company last night, and in the same breath Elon Musk said merging it with Tesla "would be a good idea." Tesla reports tonight, so that conversation is about to get louder.

Here's what matters this morning.

📊 MARKETS

A mixed close, with the Dow doing the heavy lifting.

Nasdaq: 26,424.82 ↓ 0.02%

S&P 500: 7,712.57 ↑ 0.28%

Dow: 52,495.88 ↑ 1.02%

10-Year Treasury: about 5.12%

Bitcoin: about $82,700

Investors spent the day waiting on earnings, and the after-hours reactions were all over the place. SpaceX jumped, Netflix dropped about 6%, and GM had already sunk nearly 7% during the regular session after a solid quarter. Mortgage rates are still above 7%, which you'll see in a minute.

🚀 SPACEX TURNS A PROFIT, THEN FLOATS A TESLA MERGER

SpaceX reported third-quarter revenue of $14.6 billion, up 161% from a year ago and well above the $12.7 billion Wall Street expected. Net income came in at $4.4 billion, compared with a $1.1 billion loss last year. Shares were up roughly 9% in premarket trading this morning.

Where the money comes from: mostly not rockets anymore. The AI business (Grok, the Cursor coding tool and its rented-out data center capacity) brought in $7.5 billion, which is about half of total revenue. Musk also said he expects annual recurring revenue of $500 billion to $1 trillion by the end of 2027. That's a very big number to say out loud on an earnings call.

The Tesla part: Musk said the boards of both companies have formed special committees of independent directors to look at a merger. He's staying out of the room because he runs both companies. In his words, it's "an odd kabuki dance." He also said a deal isn't a certainty and that it would be overstating things to assume one.

The hurdle: Tesla would need a majority of all outstanding shares to approve, not just the ones that vote. Musk owns about 20% of Tesla and calls that bar "quite a high hurdle."

My take: committees don't form by accident. When the guy who controls both sides says publicly that it's a good idea, the outcome is mostly decided and the paperwork is the theater. The real question is the exchange ratio, and Tesla shareholders will want a lot of detail about it. Tesla reports after the bell today, so watch for any hints.

📺 NETFLIX GROWS, BUT NOT FAST ENOUGH

Netflix posted $12.87 billion in third-quarter revenue, up 11.8%, which is its slowest growth in nearly three years. Profit was $3.66 billion, or 87 cents a share, beating estimates of 82 cents.

The problem: the outlook. Netflix guided fourth-quarter earnings to 67 cents a share when analysts wanted 73, and it cut its 2026 ad revenue target from about $3 billion to $2.7 billion, blaming a slower rollout of ad products.

This all comes days after it cut about 6% of its staff and swapped out its top content chief. The stock sank about 6% after hours.

Honestly, the ad miss is the part I'd watch. Advertising was supposed to be the second engine once price hikes ran out of road. When you're building an ad business, slipping on product delivery is the most common way to miss a number. I've seen it from the other side.

✈️ FUEL IS EATING EVERYBODY'S MARGINS

Two big companies told the same story on Tuesday.

United cut its outlook. It now expects fourth-quarter adjusted earnings of 50 cents to $1.50 a share, against the $1.76 analysts were looking for, because it's budgeting jet fuel at $4.80 a gallon, up from $3.90 last quarter. The good news for them: people keep booking, with passenger counts up more than 2%.

GM beat on the quarter. Adjusted earnings were $3.70 a share, revenue was about $50 billion, and it announced a new $20 billion buyback. But it only narrowed its full-year guidance and kept the midpoint where it was, and the CFO said commodity costs (copper, steel, diesel) will add about $400 million this year. The stock closed at $77.09, down 6.84%.

What it means for you: if you're planning holiday flights, book soon. United says travelers keep buying despite higher fares, so don't count on a price drop.

🏚️ HOUSING JUST HIT A RECORD LOW

The pending home sales index fell 7.3% in September to 66.0, the lowest reading since the data started in 2001. Economists had expected a dip of less than half a percent. Sales are down 11.3% from a year ago, and contracts fell in every region.

The cause isn't a mystery. The 30-year mortgage rate averaged 7.4% last week, the highest in almost three years, and it's tracking Treasury yields higher as the Iran war keeps inflation hot.

Builders are just as gloomy. Their confidence index dropped three points to 29, the lowest since 2012.

Anyone expecting a spring rebound should be careful. Right now the market is mostly frozen, and rates, not sentiment, are what has to move to thaw it.

💼 SALESFORCE BUYS BRAZE FOR $5.7 BILLION

Salesforce agreed to buy the customer messaging platform Braze for about $5.66 billion including debt, paying $47.50 a share in cash. That's a 58% premium, and Braze stock jumped more than 50%. Salesforce's own shares slid about 3%.

Why it's interesting: Braze has been one of Salesforce's biggest rivals in marketing automation, and this is Salesforce's eighth acquisition this year. Braze makes the software that decides which push notification, email or text you get and when.

If the deal falls through, Salesforce owes a $300 million termination fee, and Braze would owe $191.4 million.

From where I sit in ad tech, this is a sign that owning the customer relationship (first-party data plus the channel to reach people) is where the money keeps going. The big platforms are paying up for it.

📡 ON MY RADAR

Meta's policy chief is leaving. Joel Kaplan, Meta's chief global affairs officer and the person who built much of its relationship with the Trump administration, will leave next year after 15 years. He's staying through 2027 to help with the transition, and president Dina Powell McCormick will take over external affairs. The timing, two weeks before the midterms, is not subtle.

Spotify says it pulled 50 million AI tracks from recommendations this year. These are songs it identified as slop or spam, which listeners kept skipping. They're still on the platform, just not pushed to you. It also removed more than 75 million spammy tracks from the service last year.

That's it for today. Tesla's earnings tonight are the big one. See you tomorrow.

Good morning! Elon Musk made a $10 billion promise before breakfast on Monday and skipped the part about how it works. Two of the biggest earnings reports of the season land tonight, and Saudi Arabia just admitted that nobody wants to fly to Riyadh right now.

Here’s what matters this morning.

📊 MARKETS

Tech bounced back, but it was a narrow rally.

Nasdaq: 26,430.89 ↑ 1.11%

S&P 500: 7,690.73 ↑ 0.41%

Dow: 51,966.03 ↓ 0.07%

10-Year Treasury: about 5.14%

Bitcoin: about $82,000

Chips led the way after last week’s ugly selloff. Intel, Micron and Marvell all jumped, and Amazon rose about 5% on an analyst upgrade. The Dow slipped, though, and the 10-year yield crept higher again, which tells you the rally wasn’t exactly confident. Oil is still hovering around $110 a barrel for Brent. This morning Nasdaq futures are slightly lower as traders brace for tonight’s earnings.

🚀 MUSK WANTS TO GIVE EVERY KID A SPACEX SHARE

Just before 4 a.m. Eastern on Monday, Musk posted that next year he’ll give one of his SpaceX shares to every kid in America, and that it’s “the first of many.”

Do the math. There are roughly 73 million Americans under 18. SpaceX closed Friday at $146.03. That's about $10.7 billion, or roughly 1% of his net worth.

What we don't know: pretty much everything else. He didn't say whether "kid" means every minor or only citizens, or how the shares get delivered. Reports say the plan is to run it through the Treasury's Trump Accounts, which can take stock donations.

The timing: it landed one day after Anthropic said it will put 5% of its shares into a public benefit fund. Musk had replied to that announcement saying the shares should just go straight to the public. Then he topped it. OpenAI has also reportedly floated giving the government a 5% stake.

My take: a rare case where one-upmanship might actually help regular people. But a post is not a plan. I'll believe it when there's a legal structure, a date and a number of shares. Until then it's the best PR a company has bought all year, and it cost a tweet.

💸 SPACEX AND NETFLIX REPORT TONIGHT

Both report after the close, and they couldn't be more different.

SpaceX: this is only its second report as a public company. Wall Street expects about $12.7 to $12.9 billion in revenue, up from $7.8 billion last quarter, and its first profitable quarter since the IPO. Last quarter it lost $541 million. The AI business is the story now. The number everyone is watching is capital spending, which hit $15.8 billion last quarter. The stock fell more than 13% after the last report, even with strong revenue, and it's roughly 28% below its June high. Options traders are pricing in a move of about 8% either way.

Netflix: consensus is about $12.87 billion in revenue and 82 cents a share. That would be the slowest third-quarter growth in three years, roughly 12%. The stock is around $70, down about 25% this year. It just cut around 1,000 jobs, about 6% of the company, and swapped out its content chief. YouTube now gets nearly double Netflix's viewing time in the US, which is the problem nobody at Netflix wants to say out loud.

Then it keeps going: Tesla and Meta report Wednesday. This is the week where the AI spending story either holds or cracks.

My take: Netflix will probably hit the numbers. The question is the tone on engagement. For SpaceX, a good quarter might not be enough. The market already sold the AI trade hard last week.

🏜️ SAUDI ARABIA CANCELS "DAVOS IN THE DESERT"

Saudi Arabia postponed its Future Investment Initiative, the huge annual investor conference that was set for October 26 to 29 in Riyadh, until 2027. New dates are coming "very soon," organizers said.

The reason is security. Iran-backed Houthi militants have been hitting the kingdom with missiles and drones, including an attack on Riyadh's airport that killed more than a dozen people. Wall Street executives had reportedly been telling organizers privately that they were nervous. Bank bosses like Jamie Dimon and Larry Fink were expected.

Why this hurts: the conference is basically a trade show for Saudi's plan to become a global hub for AI, tourism and investment after oil. You can't pitch that when CEOs won't land at your airport. Two other Riyadh events were also cancelled.

My take: money follows safety. The kingdom can fund a lot of things itself, but a plan that depends on foreign investors needs those investors to feel comfortable showing up. Right now they don't.

🧠 AN NVIDIA CHALLENGER JUST RAISED $1.5 BILLION

Tenstorrent, the AI chip company led by legendary chip designer Jim Keller, raised $1.5 billion at a $6.2 billion valuation. That's more than double the $2.6 billion it was worth in late 2024. Investors include Fidelity, T. Rowe Price, ARK, Morgan Stanley and Tether.

The interesting part: Intel and Qualcomm both reportedly tried to buy it earlier this year. It said no and took the money instead. It builds cheaper, open, customizable AI chips and sells whole servers, and it licenses its designs to companies like Samsung and LG.

My take: Nvidia has the market, but everyone with a big AI bill wants a second option. The cash goes to making servers in volume, which is where most chip startups die. Worth watching.

🍎 APPLE'S TOUCHSCREEN MAC IS REAL

Apple confirmed an event on Wednesday, October 28, in Los Angeles, called "Pro and tell." It starts at 10 a.m. Pacific. It's expected to be an in-person media event rather than a big livestream, with product news going out by press release.

The headliner is reportedly the first MacBook Pro with a touchscreen. That's expected to mean an OLED display, a Dynamic Island-style cutout instead of the notch, and 14 and 16 inch sizes. Bloomberg also expects a cheaper MacBook Pro with the new M6 chip, a refreshed iMac, and an iPad mini with a sharper screen.

The backstory: for years Apple said touch on a laptop was the wrong idea and that iPads and Macs should stay separate. Now it's changing course. Bloomberg says stores are preparing to start selling new products November 6, and the foldable iPhone Duo goes on sale this Friday.

My take: Apple rarely admits it was wrong. It just ships the thing and acts like it planned it. I'd bet the touchscreen sells well to people who don't care how we got here.

🇫🇷 FRANCE: CURFEWS, AND THEN A CALM NIGHT

After the worst rioting in years, France imposed partial curfews on Monday in parts of Paris, Lille, Lyon and other cities. The government says nearly 3,000 businesses were looted or damaged. The prime minister said the curfews helped bring a calm night.

The political problem: the interior minister admitted police "lost control" over the weekend. Macron is now being criticized for heading off on a Middle East trip while this is going on. The country has a divided parliament and a presidential election in April 2027. Organizers are already calling for another round of protests on Saturday.

My take: quiet nights don't fix the anger over prices. Retailers are asking for tax relief and the government says it will offer furlough support, so expect the bill to land on a budget that's already stretched.

🌍 A FEW OTHER THINGS ON THE RADAR

Moonshine goes to court. The Supreme Court agreed to hear a challenge to the 1868 federal ban on distilling spirits at home. Two appeals courts disagreed, so the justices will settle it, probably by early summer.

LinkedIn is fighting AI slop. Its "seems like AI slop" button was clicked over a million times in the first two weeks, and the company says views of posts it classifies as AI slop are down about 40%. Its editor-in-chief said "what works is being human." Good advice for the rest of us too.

Amazon had a big day. The stock jumped about 5% Monday after Morgan Stanley named it a top pick.

Tesla ran up before earnings. It rose about 3.8% ahead of Wednesday's report.

Good morning! Anthropic is putting a slice of its own company into a public benefit fund, and the number is bigger than most people expected. France spent the weekend on fire, tech stocks get their report cards this week, and Putin has an idea for how to end the war in Ukraine that leaves Ukraine out of the room.

Let's get into it

📊 MARKETS

Futures are bouncing after the worst week for tech since June.

Nasdaq: 26,140.03 ↓ 2.14% (Friday)

S&P 500: 7,659.44 ↓ 1.09%

Dow: 52,002.41 ↓ 0.34%

10-Year Treasury: 5.098%

Bitcoin: about $82,300

This morning Nasdaq 100 futures are up around 1.3%, S&P futures are up about 0.7%, and Dow futures are barely higher. Dip buyers showed up early. CoreWeave and Broadcom were both higher in premarket, after last week's brutal selloff in AI infrastructure names.

Oil is helping. Brent fell about 2% after touching a five-month high Friday, since the Russia sanctions waiver is expected to bring more supply back. Treasury yields slipped too. The 10-year is sitting near 5.07% after its biggest weekly drop in more than eight months. One thing I'd watch: Bitcoin funds saw a second straight week of outflows ($229 million after $681 million the week before), so crypto is bouncing without much institutional help.

🤖 ANTHROPIC IS SETTING ASIDE 5% OF ITSELF FOR THE PUBLIC

On Sunday, Anthropic announced the Anthropic Public Benefit Fund. The company says it will commit 5% of its shares to it right away, subject to stockholder approval. Then the board can add another 2% each time the company's value rises 50% above a baseline it hasn't shared yet.

The fund will be a wholly owned LLC, not a traditional nonprofit. Anthropic says that gives it room to do different things: big donations to nonprofits, direct payments to specific groups of people, or work on how AI changes the job market. It already put $200 million toward studying that last one. None of the shares can be used for lobbying or political giving, in the US or anywhere else.

The pitch: the company points out that tech firms routinely hand executives bigger and bigger stock awards as the business grows. Anthropic says it would rather send that kind of escalating equity to the public.

The timing: this is a company preparing for one of the biggest IPOs ever. Elon Musk jumped in on X and said the shares should just go straight to the public.

My take: it's a smart move and I'm not going to pretend it isn't also good positioning. Before an IPO, every AI lab is going to get asked what happens to the people whose jobs it replaces. Having an answer, with real equity behind it, beats a blog post. The part to watch is what "set baseline" means. Until that number is public, nobody can say how big this gets.

🔥 FRANCE'S WORST RIOTS IN YEARS

Saturday's nationwide protests over cost of living and run-down schools started peacefully. Turnout was around 550,000 by the authorities' count, and 800,000 by the organizers'. Then masked groups took over parts of it.

More than 2,400 people were arrested, and by Monday the count was above 2,500 after another night of looting in Paris. Nearly 1,000 police and gendarmes were hurt, seven badly. Shops were looted in Paris, Marseille, Lyon and other cities, and the historic town hall in Limoges was set on fire. Losses are estimated in the hundreds of millions of euros.

Macron went on TV Sunday night, said he felt "anger and shame," and blamed far-left militants and criminals. He also refused the resignation of his interior minister, Laurent Nunez, who offered it.

The market angle: France's 10-year yield rose about 7 basis points to 4.857% this morning, while Germany's barely moved. Investors were already nervous about French spending limits. Riots with a presidential election coming next year don't make that easier.

My take: this isn't just a protest story. The government has no money to spend its way out of this, and the anger is about prices. That's a bad mix, and it's not just a French problem right now.

🚀 THE BIG EARNINGS WEEK, WITH A STARLINK FIGHT ON THE SIDE

About 15% of the S&P 500 reports this week, and the AI trade is on trial.

Tuesday: SpaceX reports after the close, with a call at 4:30 PM ET. Analysts are looking for around $12.55 billion in revenue and a profit of about 11 cents a share. Last quarter was $7.81 billion and a $541 million loss. Netflix and GM report Tuesday as well.

Wednesday: Tesla and Meta, plus IBM, Lam Research and Texas Instruments. Thursday brings Spotify, Procter & Gamble and Blackstone.

The side drama: the US ambassador to the EU told the Financial Times that European companies would face "devastating" retaliation if Brussels goes ahead with plans to reserve satellite-to-phone spectrum for European operators. That would squeeze SpaceX and Amazon. It comes right after Ukraine said Starlink was being throttled for its military, and Europe doesn't have an alternative yet. The EU's own satellite project won't launch until 2029.

My take: SpaceX has to show it can turn a 60% jump in sales into a profit while pouring money into AI. If it does, the whole space-plus-AI story holds up. If not, last week's selloff may only be the start.

🗳️ A $340 MILLION FIGHT OVER A BILLIONAIRE TAX

California votes November 3 on Prop 40, a one-time 5% tax on the wealth of billionaires living in the state. It would raise an estimated $100 billion over five years, mostly for health care. If it passes, it's the first billionaire tax in the world.

The opposition has raised more than $340 million, led by Google co-founder Sergey Brin, and was spending over $1 million a day in the first half of September. The ads are working. Several September surveys had support stuck in the mid-40s, and one Berkeley poll showed the yes lead shrinking from 7 points in August to 3 points at the end of September. California voters have also rejected a wealth tax three times already this decade.

The no side has also gone after the tax's own backers by arguing that most of the money would flow to big insurers without lowering costs.

My take: whichever way it goes, founders and investors everywhere are watching. Many wealthy Californians have said they'll move if it passes. If it fails after the biggest tax-fight spending spree I can remember, the lesson for other states is that you can outspend a wealth tax. If it passes, expect copycats.

🥃 BERKSHIRE GOES BACK FOR MORE OF BENDING SPOONS

Last Wednesday, Berkshire Hathaway put another $330 million into Bending Spoons, the Milan-based company that buys old software brands like AOL, Vimeo and Evernote and squeezes them for efficiency. That lifts Berkshire's stake to 4%. It paid $33 a share in a private deal, after investing $600 million at the July IPO at $29. Total cost: $930 million.

The stock jumped about 40% that day.

Why it's odd: Buffett famously stayed away from tech beyond Apple and Alphabet. This is Greg Abel's Berkshire, and it's showing different taste: a richly priced, acquisitive software roll-up.

My take: I get it, though. Software companies hurt by AI are getting cheap, and Bending Spoons wants to buy a lot of them. Berkshire is basically backing the buyer of the leftovers. It's a bet that old software doesn't die, it just changes owners.

🌐 PUTIN WANTS A SUMMIT. UKRAINE ISN'T INVITED.

The Wall Street Journal reports that Putin has proposed a meeting next month with Trump and Xi to negotiate an end to the Ukraine war, on terms that favor Moscow. Zelensky would not be there. The Kremlin suggested the sidelines of the APEC summit in Shenzhen, November 18 to 19. The idea reportedly came up in an October 9 call with Trump, the same one that produced the Russian diesel deal.

Trump hasn't agreed to it, a senior US official says, but he could be open to it. The Kremlin's spokesman said all three sides acknowledge a meeting is possible. This all lands days after Trump waived most of the Russia sanctions law, and over the weekend he said Zelensky "doesn't want to end this war."

My take: three leaders deciding a country's future without its president in the room would be a huge deal, and Europe knows it. Even the proposal tells you where the leverage sits right now.

🌍 A FEW OTHER THINGS ON THE RADAR

China wants to control AI exports. Beijing proposed adding 40 technologies to its export control list, 23 of them in AI, including large models, agents and chip designs. Open-source work is excluded and comments are open until November 15. A temporary registration requirement started Friday.

Waymo is coming to Canada. Cars will start driving Toronto streets by hand to map them in the next few days, with paying riders targeted for 2028. The catch: Ontario still has no rules for a commercial driverless service.

Bending Spoons wasn't the only odd Berkshire bet. Since Abel took over in January, Berkshire has also added a huge Alphabet position and bought homebuilder Taylor Morrison for $8.5 billion. It's a very different company from last year's.

Good morning! KFC is breaking up with Pepsi, and the timing couldn't be worse for Pepsi. Meanwhile tech stocks just had their ugliest week since June, the AI companies are paying junk-bond rates to borrow, and Apple sold out of a $1,999 phone in about 15 minutes.

Let's get into it.

📊 MARKETS

Tech got hit hard, and everything else just stood back and watched.

Nasdaq: 26,140.03 ↓ 2.14%

S&P 500: 7,659.44 ↓ 1.09%

Dow: 52,002.41 ↓ 0.34%

10-Year Treasury: 5.098% ↑ 1 bp

Bitcoin: $81,650 ↓ 0.87%

The Nasdaq lost about 4.5% on the week, its worst stretch since June. Ten days ago it was sitting at a record high. The S&P fell almost 2% for the week, while the Dow actually finished up, because investors moved money out of AI names and into energy and other old-economy stocks.

Oil did the rest of the damage. Brent touched $110 a barrel Friday and settled at $109.86, its highest close since May. U.S. crude gained more than 10% in a week. The Fed chair also refused to give any hint about a rate hike at the October 27-28 meeting. "I don't prejudge meetings," he said. Markets took that as slightly less hawkish, which helped bonds, but not much else.

🍗 KFC IS SWITCHING TO COKE

After roughly 40 years of pouring Pepsi, KFC's U.S. restaurants are moving to Coca-Cola. The switch starts in January, and every U.S. location (about 3,700 of them) should be serving Coke by spring 2027.

This one stings for Pepsi because it's personal. Pepsi actually owned KFC from 1986 until it spun off its restaurants in 1997, and the chain stayed loyal ever since. Back when Pepsi bought it, KFC was Coke's second-biggest fountain customer after McDonald's. Now Coke gets it back.

The money: Bank of America estimates the account is worth about $500 million a year in sales to Pepsi. That's roughly a 3% hit to its North American beverage concentrate business, and a 2.5% bump for Coke in the region.

Why KFC did it: KFC has been losing customers to Chick-fil-A and Popeyes for years. Its U.S. boss called the move "a critical step in the Kentucky Fried Comeback." Drinks are now a real traffic driver in fast food. Think refreshers, dirty sodas, custom combos. KFC thinks Coke's lineup and innovation team give it more to work with.

Pepsi keeps Taco Bell (on a new 10-year deal) and KFC's international business. But Coke has now pulled Culver's, Arby's, Panda Express and KFC away from Pepsi in recent years. Pepsi's big win was Subway.

My take: the scary part for Pepsi isn't the $500 million. It's what analysts are already saying out loud: if a 40-year, former-family account can walk, every Pepsi contract is now in play. When you're already fighting weak snack sales and GLP-1 diets, losing your most iconic restaurant partner is a brand problem, not just a revenue line.

💸 AI MONEY JUST GOT A LOT MORE EXPENSIVE

The whole week in tech came down to one question: what happens to companies that borrowed billions to build AI when rates stay above 5%?

CoreWeave, the Nvidia-backed company that rents out AI chips, fell another 11.9% Friday to $61.39. It lost a quarter of its value in one week and is down more than 65% from its 2025 peak. It carries about $50 billion of debt, and one of its bonds briefly yielded over 16%.

Then came news that even Anthropic is paying up. It's offering Blackstone a 10% coupon (more once fees and discounts are counted) on $9 billion of junior debt. That's part of a $60 billion package to buy Google's AI chips, backed by Anthropic's five-year lease payments. For comparison, similarly rated borrowers pay about 7% in public bond markets. Back in June, a similar slice of Anthropic debt priced at 8.5%.

More pressure: Replit's CEO said on stage Thursday that the AI coding platform is no longer working with Anthropic, citing cost and saying "ChatGPT is better now." A person familiar with the deal disputed that and said the partnership is still in place. Either way, it's not the headline you want during IPO season.

And it's spreading: Japan's Kioxia, a memory chip maker that briefly became Japan's most valuable listed company in June, has lost about two-thirds of its market value since then, squeezed by Chinese rivals and the same worries about data center debt.

My take: demand for AI is real. What's changing is the price of the money behind it. When the hottest AI company in the world has to pay 10% to borrow, the weaker players are going to find out fast who actually has a business and who just had cheap financing.

📣 CHATGPT ADS ARE GOING CHEAP TO WIN SMALL BUSINESSES

OpenAI is pushing hard to make ads inside ChatGPT a real business, and it's doing it the old-fashioned way: cutting prices and hiring people from Meta.

Ads in ChatGPT reached about a $1 billion annual run rate in late August. The advertiser count jumped to roughly 60,000 in early October from about 20,000 in late August, according to one research firm. The ad team is now about 140 people, nearly half hired between July and September, with Meta the biggest source. It's also been reorganized seven times since ads launched in February.

The price war: one agency founder said B2B clients are paying about $5 a click in ChatGPT, versus $30 to $50 on Google for comparable searches. OpenAI is also using outsourcing firms to sign up small and midsize businesses.

The catch: OpenAI told investors it expected $2.4 billion in ad revenue this year and will likely fall short. Most advertisers are still spending test budgets, usually 1% to 5% of their annual spend, and many call the targeting a "black box."

My take: I run an ad network, so I watch this closely. Cheap clicks always come first. That's how you get advertisers in the door. The real test is whether those $5 clicks turn into customers. If OpenAI can prove conversion, Google's search business has its first serious competitor in 20 years. If it can't, it's just cheap traffic.

📱 APPLE'S $1,999 FOLDING IPHONE SOLD OUT IN MINUTES

Apple's first foldable phone, the iPhone Duo, went up for preorder Friday morning. Within about half an hour, every model, color and storage size showed a delivery date of January 25. Apple stores also ran out of launch-day pickup stock almost immediately.

The phone starts at $1,999 and officially goes on sale October 23. Apple called demand "nothing short of extraordinary."

Not everyone buys the hype. There were reports earlier this year of low production yields and tight memory chip supply, so part of this is demand and part of it is Apple simply not having many to sell.

My take: both things can be true. A $2,000 phone selling out three months deep is a great signal for Apple's pricing power, especially when the memory chip shortage is pushing everyone's costs up. And if you're one of the people who locked in a pre-Christmas delivery, congratulations. You own the hardest gift of the year to find.

👩‍💻 THE AI LAB THAT STOPPED HIRING JUNIORS

Anthropic published a rare look at how AI has changed its own workforce, and it's worth reading if you manage people.

The share of junior employees in its technical departments fell from 21% to 14% since early 2025. Junior technical hires dropped even faster, from 27% of hires to 9%. By August, AI agents were logging six times as many hours as the employees directing them, and code commits per engineer were running about five times faster than six months earlier.

The bottleneck is now people. Even non-technical staff get so much AI output that just reading it would take up half their work week. Hiring managers have shifted too. They care more about judgment and autonomy, and less about narrow technical skills.

My take: this is the clearest data yet on what AI does to entry-level jobs, and it's coming from the company selling the AI. The company says it moves people internally and tracks which roles are at risk. Fine. But the people it never hires don't show up in that math. If you're early in your career, the skill that matters now is running the tools, not competing with them.

🛢️ TRUMP PUTS NEW RUSSIA SANCTIONS ON HOLD

On Friday night, President Trump signed an executive order waiving most of a sweeping Russia sanctions law, two days before it was set to take effect. He signed that same law last month.

The law, named after the late Sen. Lindsey Graham, passed with bipartisan support. It would have allowed tariffs of up to 100% on goods from the top five buyers of Russian oil and gas, which means mainly China and India. It also targeted senior Russian officials, banks and the "shadow fleet" of tankers used to dodge existing sanctions. Trump said waiving it is in the "national interests of the United States." Sanctions from earlier executive orders stay in place.

This comes right after Washington struck a deal for Russia to release diesel into global markets, with fuel prices a major issue before the midterms.

My take: this is an energy decision dressed up as foreign policy. Hitting China and India with 100% tariffs while Brent is near $110 would have sent fuel prices even higher. The White House picked cheaper diesel over pressure on Moscow. Whether that works depends on whether oil actually comes down.

🌍 A FEW OTHER THINGS ON THE RADAR

SoftBank wants to buy a security guard company. It's weighing a deal for Allied Universal, the biggest U.S. security services firm, at an equity value of up to $18 billion. The plan is to eventually replace some guards with robots. Masayoshi Son never thinks small.

Proofpoint is buying Varonis for $6.3 billion. The Thoma Bravo-owned cybersecurity company is paying $49.75 a share in cash, a 52% premium to where Varonis traded in June before sale rumors started. Securing the data that AI agents can access is now worth a lot of money.

AI found too many bugs in Postgres. PostgreSQL 19, one of the world's most popular databases, is delayed to around November 19 and dropped 8 to 10 features. AI code reviewers found more issues than the developers could fix in time. A good problem to have, honestly.

Good morning! Tesla finally showed off the Roadster, and it did things cars aren't supposed to do. Meanwhile wholesale prices jumped the most in four years, the bond market is pricing in real trouble at one AI company, and Amazon wants you wearing a microphone.

Let's get into it.

📊 MARKETS

Money ran out of tech and into the boring stuff.

Nasdaq: 26,713.03 ↑ 0.08%

S&P 500: 7,744.06 ↑ 0.33%

Dow: 52,177.69 ↑ 1.08%

10-Year Treasury: 5.089% ↓ 10 bps

Bitcoin: $82,271.09 ↑ 0.73%

The Dow gained 556 points thanks to names like Nike, Home Depot and Sherwin-Williams. The Nasdaq spent most of the day in the red before clawing back to flat.

The bigger move was in bonds. The 10-year yield had its biggest one-day drop in more than a year, even though inflation data came in hot again. Gold rose about 2% to roughly $4,195 an ounce. When investors buy bonds and gold on a bad inflation day, they're telling you they're nervous.

🚀 THE TESLA ROADSTER IS BACK, AND IT FLIES (SORT OF)

Nearly nine years after Elon Musk first teased it, Tesla finally showed the next-generation Roadster last night at a SpaceX test site near Waco, Texas.

It was less a car launch and more a stunt show. The car drove upside down on a curved ramp, flipped off the top, and used thrusters borrowed from SpaceX to float back down to the ground. One version hit 0 to 60 mph in under a second.

There are three versions:

Performance: the "road ready" two-seater, no thrusters. $50,000 to reserve.

Thrust: two seats plus rear thrusters for launch-style acceleration. $250,000 to reserve.

Rocket: one seat, 10 thrusters, the one that does the flying tricks. Invite only.

What Tesla didn't share: a price. Back in 2017 it quoted $200,000 and promised deliveries in 2020. Now Musk says production starts in 2028.

The catch: a reservation is basically an interest-free loan to Tesla. People who paid $50,000 deposits in 2017 have been waiting almost a decade.

My take: this isn't about selling cars. Tesla stopped selling the Model S and X this year to make room for its Optimus robots. The Roadster is a marketing piece that shows off SpaceX tech under the Tesla brand, and that's exactly why people keep talking about a future Tesla and SpaceX combination. As a brand moment, it worked. As a business, it's a rounding error.

🔥 WHOLESALE PRICES JUST HAD THEIR WORST MONTH SINCE 2022

A day after the consumer inflation report, the producer side came in even hotter.

The producer price index, which tracks what businesses pay before anything reaches a store shelf, rose 1.3% in September. Economists expected about half that. It was the biggest monthly jump since March 2022. Over the past year, wholesale prices are up 6.3%.

Energy did most of the damage. Gasoline rose 20.3% in one month. Diesel rose 21% in a month and is up 115% from a year ago. Goods prices overall climbed 2.6%, the biggest increase since the government started tracking that series in 2009.

Why this matters more than it sounds: diesel moves trucks and trains. When shipping costs that much more, everything that gets shipped eventually costs more too. Even with food, energy and trade stripped out, wholesale prices rose 0.5% in the month and 5% over the year.

My take: this is the pipeline for next month's consumer prices. The Fed meets October 27-28, and two hot reports in two days make a rate hike much harder to skip. If you sell physical products, check your margins now, because your suppliers are about to send new price sheets.

🧨 THE BOND MARKET THINKS ONE AI COMPANY MIGHT NOT MAKE IT

The cost of insuring CoreWeave's debt against default hit a record of about 1,194 basis points yesterday. In plain English, that prices in a better than 60% chance that the AI chip landlord defaults within five years. A year ago, that number was around 30%.

CoreWeave carries roughly $50 billion in debt to build AI data centers, and its bonds are now yielding around 15%.

Then Nvidia's Jensen Huang stepped in. "CoreWeave's strength is improving every day," he said. "Their cost of capital is actually decreasing." He also said Nvidia doesn't need to backstop the company. Nvidia owns about 10% of it and is its main chip supplier. The stock flipped from a loss to close up nearly 6%.

The nerves aren't limited to CoreWeave. Default insurance on Amazon, Alphabet and Meta also hit records, though from much safer levels.

And then there's TSMC, the company that actually makes the chips. It posted record profit for the sixth straight quarter: net income up 69% to about $23.6 billion, revenue of $46.7 billion, and guidance of up to $54.3 billion next quarter. The stock still fell about 2% after its CEO sounded cautious about the economy and consumers.

My take: the AI story has split in two. Demand for chips is real, and the people selling picks and shovels are printing money. The question is whether the companies that borrowed tens of billions to rent those chips out can keep paying the bills if rates keep climbing. The answer to that one is in the bond market, not in a CEO quote.

🏷️ ANTHROPIC'S $2 TRILLION DREAM GETS A HAIRCUT

Anthropic's pitch to future shareholders this week was strong on paper. Revenue hit $16.8 billion last quarter, up 45% from the quarter before, and the company said it was profitable on an adjusted basis.

But the quarter before that, revenue more than doubled. Investors noticed the slowdown. Some who attended the investor day are now talking about a valuation around $1.5 trillion instead of the roughly $2 trillion that had been floated for the November IPO.

The other news: Anthropic gave six people from METR, a nonprofit that tests AI models for safety, employee-level access. They get company laptops, office space and the same internal tools as Anthropic's own risk team. METR can publish what it finds and Anthropic can't veto it, only redact narrow categories like customer data and model architecture.

My take: a 25% valuation haircut over one quarter's growth rate tells you how priced-for-perfection this whole sector is. And the safety move is smart timing. Nothing calms nervous IPO buyers like an outside auditor living in your building.

🛢️ THE "ENERGY CEASEFIRE" LASTED THREE DAYS

On Sunday, President Trump announced an energy ceasefire between Russia and Ukraine. Neither side said it had agreed to one. Ukraine paused strikes on Russian refineries for three days anyway. Russia kept hitting Ukraine's power grid, including an overnight attack with more than 850 drones.

So on Thursday, Ukraine went back to hitting refineries, starting with one in Russia's Ryazan region. Zelenskyy's message: "We're done."

Trump called it a "disgrace" and said Ukraine is just pushing world oil prices higher. Washington has also struck a deal to buy Russian diesel to bring fuel prices down before the midterms, now less than three weeks away.

Oil gave a mixed reaction. U.S. crude jumped 3% to $97.97 a barrel after a big drop in inventories and more attacks on ships near Hormuz, while Brent slipped slightly to $105.92.

My take: diesel is the political pressure point right now. It's up 115% in a year at the wholesale level, and it's exactly what Russian refineries produce. Expect fuel prices to stay at the center of foreign policy until Election Day.

🎙️ AMAZON WANTS TO RECORD YOUR DAY

Amazon launched two new gadgets from Bee, the AI wearable startup it bought last year.

The Bee Frontier is a $74.99 wristband (or clip) that listens to your conversations and turns them into summaries, to-dos and reminders. It's on sale now. The Bee Eclipse is a $99.99 card-sized device that snaps onto the back of your phone with 21+ days of battery. It's coming soon.

Summaries and 14 days of memory are free. Keeping more history costs $12 a month. And the devices connect to Alexa+ and Amazon.com, so what you talk about can turn into things you buy.

The privacy part: there's a light and a button, and Amazon says it'll prompt users to ask permission before recording. We'll see how often that happens at a dinner table.

My take: as someone who runs an ad network, I can tell you the most valuable data in the world is purchase intent. A device that hears you say "we need a new stroller" and connects straight to the world's biggest store is the holy grail. The $75 price tag is the cheap part. The data is the business.

🌍 A FEW OTHER THINGS ON THE RADAR

Cohere is buying a cybersecurity startup. The AI company signed a letter of intent for AISLE, a Prague and San Francisco startup started by Avast's former CEO. Its AI found 18 of the 24 security holes fixed in the latest release of curl, one of the most widely used tools on the internet. No price was disclosed.

YouTube wants your audiobooks. It's been talking to publishers about an audiobook feature that could launch next year, possibly bundled into its $15.99 Premium plan. Spotify and Audible should be worried, since plenty of people already listen to audiobooks on YouTube, many of them unofficial uploads.

Lyft is going after executives. Its new chauffeur brand, Alcove, launches in early 2027 and targets high-end corporate travel. It's built on TBR Global Chauffeuring, which Lyft bought last year. Business travel is where the margins are.

Gold had a big day. It rose about 2% to around $4,195 an ounce as yields and the dollar slipped. People don't pile into gold on a day stocks rise unless something is bugging them.

Good morning! Inflation came in hotter than anyone wanted, and the Fed now has a real decision to make in less than two weeks. Plus the AI debt trade cracked, Bank of America had a brutal week, and the Supreme Court might be about to mess with how half the internet makes money.

Here's what matters this morning.

📊 MARKETS

A rough day for anything with "AI" in the pitch deck.

Nasdaq: 26,692.87 ↓ 1.88%

S&P 500: 7,718.94 ↓ 1.11%

Dow: 51,621.48 ↓ 0.09%

10-Year Treasury: 5.190% ↓ 3 bps

Bitcoin: $81,636.15 ↓ 2.19%

The inflation report set the tone, and then the AI borrowers took the hit. CoreWeave dropped 15.5%, Oracle fell almost 9%, and Dell slid about 11% after an analyst downgrade.

The odd one out: Apple. It rose 0.5% to $342.96 and closed above a $5 trillion market value for the first time. Only Nvidia had done that before.

⛽ INFLATION IS BACK AT 3.7%

Prices rose 3.7% in September compared with a year ago, up from 3.4% in August. Month over month, they jumped 0.6%, the biggest increase in five months.

Core inflation, which leaves out food and energy, rose 2.6% from a year ago. That was higher than economists expected too.

Gas is the obvious culprit. Gas prices jumped 9.1% in just one month, and the war with Iran is still choking oil supply. Airfares are up 22% from a year ago. Hotels are up 4.4%.

The part people aren't talking about enough: AI is now showing up in your bills. The data center boom has pushed up prices for chips, laptops, phones and game consoles. Goldman Sachs estimates the AI buildout has added about half a percentage point to inflation on the Fed's preferred measure.

The one bit of relief was groceries, which actually dipped 0.1% last month.

Social Security recipients get a 3.6% raise next year because of all this.

So what does the Fed do? It already raised rates last month for the first time in three years, to about 3.9%. Most people expected it to wait until December to go again. After this report, traders moved a lot of money toward a hike at the October 27-28 meeting.

My take: the Fed is stuck. Higher rates can't pump more oil through the Strait of Hormuz, and they won't stop Big Tech from spending hundreds of billions on data centers. What they can do is make mortgages, car loans and small business credit more expensive. If you run a business and you've been waiting on a loan, I wouldn't wait much longer.

💸 AI MONEY HAD A SPLIT PERSONALITY YESTERDAY

Two AI stories hit at the same time, and they point in opposite directions.

The scary one: CoreWeave, the Nvidia-backed company that rents out AI chips, saw its stock fall 15.5% while yields on its bonds climbed to nearly 15%. That's the kind of yield lenders demand when they're genuinely worried about getting paid back. S&P rates CoreWeave B+, which is junk.

Its CEO told staff the market "misunderstands" the company and that its backlog more than covers its debt. Maybe. But other AI names that borrowed heavily got hit too, including Oracle and Nebius.

Here's the scale of it. Alphabet, Amazon, Meta and Oracle have issued more than $228 billion in bonds this year as of Monday, more than double all of 2025. JPMorgan expects the big cloud companies to spend about $800 billion this year.

The reassuring one: Anthropic told prospective investors it made $16.8 billion in revenue last quarter, up from about $11.5 billion the quarter before, and that it was profitable on an adjusted basis. It's lining up an IPO.

My take: this is the AI trade growing up. The companies selling the actual product (models people pay for) are making real money. The companies that borrowed billions to build the warehouses full of chips are the ones carrying the risk. Same industry, very different balance sheets. If you own AI stocks, know which kind you own.

🏦 BANK OF AMERICA HAD A TERRIBLE WEEK

First came the fine. On Tuesday, the Treasury hit Bank of America with more than $1.2 billion in penalties for failing to report over $5 billion in suspicious transactions, including activity tied to Chinese money laundering networks. The $750 million piece from the OCC is the largest that regulator has ever issued.

Then came earnings, less than a day later. Profit fell to $6.9 billion, or 91 cents a share, from $8.3 billion a year ago. Even without the fine, it earned $1.08 a share, short of the $1.10 analysts wanted. Trading revenue disappointed.

The stock dropped more than 8% at one point and closed down 4.8%.

And there's more. The same day, the OCC released a report saying the nine largest banks it supervises (JPMorgan, Bank of America, Citi, Wells Fargo, U.S. Bank, Capital One, PNC, TD and BMO) all had policies between 2020 and September 2025 that let politics, religion or "reputation risk" decide who got banking services. The regulator reviewed about 100,000 complaints but didn't hand out any fines.

My take: banks spent years saying "reputation risk" to justify cutting off customers they found awkward. Now that phrase is a political liability. Expect every big bank to quietly rewrite those policies before the next administration decides who's awkward.

🎬 NETFLIX IS CUTTING 1,000 JOBS

Netflix is laying off about 6% of its workforce, roughly 1,000 people. It's the biggest round of cuts since 2022, when it let about 450 people go.

Most of the cuts are in product, tech, legal and HR, though some film and TV executives are out too. The co-CEOs told staff the business is "strong and growing" and still on track for its full-year forecast.

Investors aren't so sure. The stock is down about 25% this year. Engagement is the worry: people are spending more of their screen time on YouTube, TikTok and Instagram. And Netflix walked away from buying Warner Bros.' studio and streaming business back in February, which left Paramount Skydance with a giant content library to fight it with.

Earnings land next Tuesday.

My take: Netflix's real competitor isn't another streamer anymore. It's free video made by regular people. You can't cost-cut your way out of that, but you can buy yourself time while you figure out live sports, games and creator content.

📼 A BLOCKBUSTER-ERA LAW COULD HIT ONLINE ADS

This one matters a lot to anyone in advertising, including me.

In 1988, Congress passed the Video Privacy Protection Act after a Supreme Court nominee's video rental history ended up in a newspaper. Yesterday, the Supreme Court heard a case about what that law means in 2026.

A man named Michael Salazar signed up for a free sports newsletter from 247Sports, owned by Paramount. He watched videos on the site while logged into Facebook. A Facebook tracking pixel on the page sent his viewing info to Meta, which used it for targeted ads. He says that breaks the 1988 law.

Paramount says the law only covers people who subscribe to video services, not a newsletter. The justices seemed inclined to let his lawsuit go forward.

Why it matters: tracking pixels are on millions of websites. If any company that offers video can be sued over what those pixels share, a lot of publishers and advertisers will have to rethink their setup. A ruling is likely by next summer.

My take: the industry has known for years that pixels sharing viewing data with ad platforms is a legal gray zone. This could turn it black and white. If your site has video and a Meta or TikTok pixel, now's a good time to check your consent setup.

🛰️ UKRAINE'S DRONES HIT A STARLINK SPEED LIMIT

Ukraine says its military lost Starlink connection overnight Tuesday for anything moving faster than 100 mph. That includes attack drones and the interceptor drones it uses to chase down Russian attack drones.

A presidential adviser said there was no warning and that some missions had to be cancelled. He called it "no coincidence" given the political situation.

Elon Musk says the military version, called Starshield, is controlled by the US government, and that any speed limits are set by the US military and ultimately the president. So who flipped the switch is still unclear.

The latest: a Ukrainian defence ministry source now says connectivity in motion has been restored, though the formal speed limit is technically still in place.

My take: whatever happened here, every government using Starlink just learned how much power sits with one company and one administration. Expect a lot more money flowing to rival satellite networks in Europe and elsewhere.

🌍 A FEW OTHER THINGS ON THE RADAR

Another ship sank in the Strait of Hormuz. The Singapore-registered GFS Pride went down after being hit by a projectile, and all 21 crew got off safely. Iran says it hit a mine. Only about a quarter of pre-war oil volumes made it through the strait on Monday, which goes a long way toward explaining your gas bill.

Apple vs. OpenAI is in court. OpenAI agreed not to use trade secrets that Apple says former employees took with them while the case plays out. OpenAI fired back with its own claim that an ex-employee who left for Apple took files about an unreleased device.

The Tesla Roadster is (supposedly) finally here. Tesla is streaming the reveal tonight at 5:55 p.m. Pacific on X, nearly nine years after it first showed the car and two weeks after a weather delay.

YouTube Music is labelling AI songs. It's rolling out tags for tracks made with AI help. Spotify already does this, and Apple Music plans to later this year. Good. Listeners deserve to know.