AI's Suppliers Beat and Fell | Fed Day Turns on December | Crude Back Above $100

Futures Were Mixed Before a Day Packed With Decisions

The S&P 500 rose about 0.6% on Tuesday and the Nasdaq Composite about 1.2%. Early Wednesday, Nasdaq-100 futures were up about 0.4% and Dow futures down about 0.2%. The 10-year Treasury yield ended Tuesday near 4.99%.

Bitcoin traded near $81,400. Treasury Secretary Scott Bessent said agencies can advance crypto rules without Congress, though none have been proposed yet.

Investor Signal

The Bank of Canada and the Fed decide on Wednesday, and the European Central Bank follows on Thursday. Bonds and stocks enter the day priced for a Fed hold now and a likely hike in December. A statement that keeps December open would test long yields near 5%. Those yields set the cost of money for AI's biggest builders.

AI's Suppliers Beat and Guided Above Forecasts. Their Stocks Fell Before Microsoft and Alphabet Report.

Seagate (STX) reported revenue of $4.23 billion, up 61%, and guided next quarter's earnings well above forecasts. Teradyne (TER) grew revenue 70% on what it called record memory test revenue driven by AI. Both stocks fell after hours.

Before the open, Seagate was about 1% below Tuesday's close of $667.85. Teradyne was about 3% lower. Its sales have stopped growing from quarter to quarter.

NXP Semiconductors (NXPI), a supplier to carmakers and factories, beat too, then fell about 7%. Its forecast implies about 2% growth from the third quarter, down from 8%.

Memory was the exception. SK Hynix (SKHY), whose Seoul shares rose 10.9%, posted an 80% operating margin. Its net profit still fell 58% from the second quarter, which the company tied to currency losses and markdowns on investment assets.

Investor Signal

Investors appear to be paying for surprises, not for strong results they already expected. Microsoft (MSFT) and Alphabet (GOOGL) report after Wednesday's close, and their spending is a large part of the demand behind Seagate and Teradyne. Higher spending funded by their own cash would support the chain. Plans that lean on outside money would revive the question of who pays for AI with yields near 5%.

A Fed Hike Today Trades at a Nickel. December Is Priced Near 80%.

The Fed announces its decision Wednesday afternoon, with its target range at 3.75% to 4.00%. On Kalshi, the contract on a quarter-point hike fell to 5 cents from 7 cents on Tuesday. The same venue puts the odds of a December hike near 79%.

Other central banks show the pressure from fuel. New Zealand held its rate at 2.75% in a 4-3 vote, and three members wanted a hike. Australia's inflation rose to 4.3% in September, and fuel prices jumped 9.4% in the month.

As of Monday, swaps put the odds of a Bank of Canada hike Wednesday near 94%, by one tracker's count. In Europe, banks tightened lending standards again before Thursday's ECB meeting. The one loan type drawing more demand was AI infrastructure.

Investor Signal

Prices have settled today's decision, so the statement and Chair Kevin Warsh's press conference carry the news. Language that keeps December open would likely lift two-year yields and the dollar. A nod to tighter credit would support bonds. Crude back above $100 makes a softer tone harder to deliver.

Crude Topped $100 Again. Traders Appear to Be Betting on a Date, Not a Damaged Refinery.

U.S. crude traded near $101 a barrel early Wednesday, up about 1%, after two sessions of losses on diplomacy. Brent fell 1.7% to $113.88 on Tuesday, then climbed back near $115.

On Tuesday, Yemen's Houthis claimed a missile strike on Saudi Arabia's Ras Tanura refinery, which Saudi Arabia has not confirmed. Overnight, a separate report said Washington warned Gulf states of a possible short campaign against Iran after the Nov. 3 midterms.

Heating oil futures lagged well behind crude, which is unusual if Gulf refining had been hit. On Polymarket, the contract on the U.S.-Iran ceasefire holding through Oct. 31 rose to 95.5 cents. The Nov. 15 contract fell 4 cents to 50.5 cents.

Investor Signal

Traders appear to be pricing a window after the election, not lost supply today. That premium can fade on the next report, as it did on Monday and Tuesday. Until it does, fuel keeps lifting inflation, and the Fed decides with crude above $100. OPEC+ meets on Nov. 1.

Visa Beat and Robinhood Split Forecasts. Both Stocks Fell Before the Open.

Robinhood Markets (HOOD) reported record revenue of $1.42 billion, up 12%. Event contracts, its prediction-market product, brought in $173 million, more than six times the year before. Crypto revenue fell 55% to $120 million, though it rose about 20% from the second quarter.

Adjusted earnings of 60 cents a share, a new measure, beat some forecasts and missed others. Before the open, the stock was about 8% below Tuesday's close of $94.56.

Visa (V) grew net revenue 13% to $12.14 billion and beat on earnings. Client incentives, its payments to banks and merchants, rose 21%. Visa expects adjusted net revenue growth in the low double digits in fiscal 2027, after 15% this year. Its shares were about 2% lower.

Investor Signal

Visa beat, Robinhood's earnings split forecasts, and both fell as investors weighed the details, like the chip suppliers. Robinhood now leans on event contracts, a newer and less proven line than crypto. Visa is paying more for each dollar of volume it wins. Coinbase (COIN) reports on Thursday and will show whether crypto trading is recovering.

BCE and KKR Sell Slices of Steady Cash Flow to Patient Money

BCE (BCE) agreed to sell 49.9% of its tower business to La Caisse, the Quebec pension investor, for C$2.45 billion. The new company will own more than 5,000 Bell wireless sites, valued at about C$4.9 billion in total. Bell keeps control and will lease space on towers it used to own outright. One analyst expects the money to go into growth areas such as AI.

KKR (KKR) closed its first private credit continuation fund with more than $460 million of commitments, according to PitchBook. The vehicle takes loans from a $1.5 billion lending fund that finished raising in 2017.

Investor Signal

With bank credit tightening and yields near 5%, owners are finding buyers for steady cash flows. The cost comes later, in BCE's lease bill and in any discount KKR's investors accepted. BCE's lease terms and KKR's results on Nov. 9 are the next disclosures.

Wednesday puts a price on money in three places at once. Central banks in Ottawa and Washington set it in rates. Oil traders set it in a risk premium tied to a date on the calendar.

Microsoft and Alphabet set it tonight, through how much they plan to spend and how they plan to pay. The suppliers have shown that demand is real. Investors now want proof that the buyers can keep funding it.