Financial Market News | Saturday Review

The week opened on a bounce. Chip stocks had just ended their longest losing streak since 2008. Nasdaq 100 futures rose about 1% Monday morning, and the 10-year yield sat near 5.09%.

The working view was simple. AI demand was proven. If cheaper Treasuries reached the builders, the selloff was a pause. Meta's results on Wednesday would settle it.

Meta Platforms (META) did confirm demand. But its spending ran past its cash, and it set up a new stock to sell. On Thursday, the Nasdaq fell 2.6% and the chip index 6.7%. Suppliers that beat forecasts fell with the buyers.

Money moved to safer ground. The 10-year closed below 5% for the first time since September. Bets on an October Fed hike were cut in half.

By Friday afternoon, the Nasdaq was down about 0.6% for the week and the S&P 500 about 0.4%. The Dow was up about 0.5%. Brent kept climbing.

Six threads. One shift. On Monday, the question was whether AI demand would hold. By Friday, it was who pays for it.

Meta Spent More Than It Made. Then It Built a Stock to Sell.

Revenue rose 26% to $64.60 billion at Meta Platforms (META). Capital spending of $34.91 billion topped $32.79 billion of operating cash flow. Free cash flow was negative $2.12 billion. Meta raised its 2026 spending floor to $135 billion.

It also created a listed Class C stock with no vote. The filing says Meta "expects to conduct offerings" of it.

The shares jumped more than 7% after hours, then fell about 7% Thursday to near $649. The cost of insuring Meta's debt hit a record. A day earlier, a New Mexico judge had ordered Meta to pay $25 billion in civil penalties. The stock closed higher that day.

Investor Signal

Investors shrugged off a $25 billion fine and sold on a $2.12 billion cash gap. The funding question now outweighs the legal one. Each Class C sale would dilute holders' economic stake while their votes stay intact. The size and price of the first offering will show how much of the bill outside investors carry.

Suppliers Beat Forecasts. Investors Sold the Whole Theme.

Lam Research (LRCX) posted record revenue of $8.22 billion, up 54%. It fell nearly 12% Thursday.

Power stocks fell harder than chips. GE Vernova (GEV) dropped about 11% and Vistra (VST) about 10%.

Western Digital (WDC), Bloom Energy (BE) and Comfort Systems (FIX) all beat, then fell after hours.

IBM (IBM) chief Arvind Krishna said clients worry some AI spending has no real return, according to accounts of the call. Tesla (TSLA) cut its 2026 capital budget to about $20 billion and still fell. Texas Instruments (TXN), which sells mostly outside AI, fell less than 2%.

Investor Signal

Meta spent more and fell. Tesla spent less and fell. Suppliers with record orders fell too. Investors are pricing the return on AI spending, not its size. Microsoft (MSFT) and Alphabet (GOOGL) report Oct. 28 and Amazon (AMZN) Oct. 29, and their spending plans set the demand side next.

Private AI Money Started to Reprice

SpaceX (SPCX) said its AI unit brought in $7.56 billion, more than half of revenue, and used $16.44 billion of capital spending. SpaceX guided fourth-quarter spending to $35 billion to $40 billion, about double the third quarter.

OpenAI is set to raise up to $30 billion at $1.25 trillion before the new money, according to news reports. The figure under discussion had been $1.4 trillion, about 11% higher.

Debt moved first. Some debt on Project Jupiter, a New Mexico campus leased by Oracle (ORCL), recently sold at about 80 cents on the dollar, The New York Times reported. CoreWeave (CRWV) hit a new 52-week low Thursday. By Friday afternoon it was down about 10% for the week.

Investor Signal

Private prices usually trail public ones. This week they moved in debt first, then in OpenAI's talks. OpenAI's new price is still about 47% above its March value, so the change is in direction more than damage. Blue Owl (OWL) reports Oct. 29 and could give the first sponsor mark on Jupiter.

The 10-Year Fell Below 5%. Hike Bets Were Cut in Half.

The 10-year Treasury yield closed at 4.96% Thursday, below 5% for the first time since September. It ended last week at 5.09%. The two-year yield fell to 4.65% from 4.74%.

Labor data did not drive it. Initial jobless claims fell to 194,000, below the 200,000 expected. Housing was weak. Starts ran at 1.221 million, and pending home sales fell 7.3%.

Auctions were mixed. The 20-year bond drew more bids, but only at a higher 5.469% yield. A five-year inflation-protected sale drew the weakest demand for that maturity since April 2025.

Kalshi's October hike contract fell to 6 cents Thursday from 12 cents Monday. All 100 economists in a Reuters survey still expect a hike in December.

Investor Signal

The bond rally came with the AI selloff, not with weak jobs. That looks more like a haven bid than a growth scare. American Express (AXP) said Friday it will cut about 5% of its workforce even as it raised its profit forecast. Two-, five- and seven-year note sales around the Oct. 27 to 28 Fed meeting will test the rally.

Brent Kept Climbing as the Fight Reached Saudi Arabia

Brent settled at $109.86 last Friday. It traded above $115 this Friday afternoon, its highest since May.

On Tuesday, Brent covered about $6 in one session on an unconfirmed report of an Iran compromise.

Then attacks reached Saudi Arabia. A drone aimed at the Shaybah oil field was intercepted. The State Department ordered nonessential U.S. staff to leave the kingdom. Aramco told staff to leave its Dhahran headquarters, Reuters reported. On Friday, reports that the U.S. and Israel were weighing new strikes on Iran pushed Brent higher.

Fuel is already in company forecasts. United Airlines (UAL) assumes jet fuel at $4.80 a gallon. It puts the gap with analysts at about $1 a share.

Investor Signal

Oil rose while long yields fell, the reverse of the usual inflation link. Big oil producers ended about flat Thursday, so investors do not yet see a lasting supply loss. Fuel still feeds the inflation the Fed weighs next week. A confirmed outage or a U.S. strike order would test the bond rally.

Buyers Paid Up for Cash They Can See

Procter & Gamble (PG) rose about 6% Thursday after volume grew 2.4%. Lockheed Martin (LMT) gained about 7% after raising its free cash flow forecast by $800 million.

Deals followed the same line. Salesforce (CRM) agreed to buy Braze (BRZE) for $47.50 a share in cash, a 58% premium. An EQT fund offered 46.50 euros a share for Qiagen (QGEN).

Private credit showed the limit. Blackstone (BX) took in $63.3 billion in the third quarter. Investors in BCRED, its credit fund for individuals, asked to withdraw 10% of its value. Blackstone paid about half.

Investor Signal

Buyers paid up for cash flows that exist today. They charged more for cash promised later. That split runs from P&G to BCRED to CoreWeave. BCRED's next withdrawal window will show whether individual investors keep waiting.

The week settled one question again. Demand for AI is real, and suppliers keep beating.

It sharpened another. Meta's spending passed its cash, and private prices began to slip. Investors sold the theme and bought bonds and cash in hand. Next week, the largest cloud providers will show how much of the bill they will carry.