Dear Trader,
Jensen Huang stood up in Stockholm on Thursday and told everyone CoreWeave gets stronger by the day.
Traders sold it again Friday morning anyway. That’s been this whole week: somebody important says don’t worry, and the people with real money on the line keep right on worrying.
Trump keeps saying the Iran war ends “very soon,” yet ships keep burning in the Strait of Hormuz and gas just set a record. Warsh flew all the way to Bangkok to say as close to nothing as a Fed chair can say, and the odds of an October hike got nearly cut in half on his silence alone.
So who do you trust, the guy at the podium or the price on your screen? Mark Sebastian goes live today, and he’s bringing Andrew Giovinazzi along to hash it out. They’ll dig into all three stories below, plus whatever else catches their eye. Grab your seat in the room before they start.
This link adds State of the Market to your calendar.
The Daily News Breakdown
SIGN: The White House doesn’t want Brent crude at $106 a barrel heading into the midterms, and the wars in Iran and Ukraine picked the worst possible moment to heat back up. Ships keep catching fire in the Strait of Hormuz, and the Houthis just hit a Saudi Aramco office building. Trump promised no new airstrikes inside Iran until after Election Day, which one Rabobank strategist read as Tehran’s cue to stir the pot now.
Zelensky ordered fresh strikes on Russian refineries after Moscow answered Trump’s “energy ceasefire” by hitting Ukrainian power plants. Meanwhile, gas just set a record for days above $4 a gallon, and 10-year Treasury yields (the rate mortgages track) sit at early-2000s highs with the midterms less than three weeks out.
SNEAKER: CoreWeave (CRWV) dropped 5% in premarket trading Friday, one day after Jensen Huang personally vouched for it. Earlier this week, a viral chart of CoreWeave’s bond yields shooting higher (lenders demanding a lot more interest to hold its debt) had investors asking whether the AI cloud provider can grow fast enough to cover its interest bill.
Huang stepped in Thursday, said CoreWeave gets stronger every day and its borrowing costs keep falling, and the stock bounced back from a 7% drop. Nvidia owns about 10% of CoreWeave and sells it the chips, so Jensen doesn’t exactly walk in as a neutral party. CoreWeave was on pace for a 15% weekly loss as of Thursday’s close, and rival Nebius (NBIS) slid 3% premarket too.
SIREN: Fed Chair Kevin Warsh took the mic at the IMF meetings in Bangkok Friday and gave the rate-hike crowd absolutely nothing to work with. His big line on policy: “I don’t prejudge meetings.” Traders took the hint and cut the odds of a hike at the Oct. 27-28 meeting from about 27% to under 15%.
Remember, the Fed already hiked a quarter point in September, its first since 2023, and most officials saw one more coming this year. Warsh did want to talk AI, though. He called it the most important innovation of his lifetime but warned it’s juicing demand before it boosts supply, and some of his Fed colleagues worry the AI spending spree could overheat the economy.