MARKET PULSE Stocks Rallied Without the Year's AI Leaders The Dow Jones Industrial Average rose about 1,570 points, or 3%, to 53,356 on Wednesday, the first session after Democrats won both chambers of Congress. The S&P 500 gained about 1.6% and the Nasdaq about 1.4%. The rally left out the year's leaders. Chip stocks fell about 3%, while homebuilders, banks and the largest platform companies rose. Oil fell more than 8%, and the 10-year Treasury yield slipped to about 4.89%. Gold rose more than 3% to near $4,075 an ounce. Policy carried a price in private deals, too. The Andersons (ANDE) agreed to buy a private equity firm's ethanol plants for $915 million. It attributed about half the price to expected federal tax credits. Its shares fell about 12% in the first session after its quarterly results. Investor Signal Among AI stocks, investors appeared to favor what is already locked in. The largest platform companies rose, and so did a miner that had just signed a lease. Data-center suppliers fell, along with miners whose Texas plans await approval. Cheaper oil also lifted the broad market, and one session cannot separate the election from the oil move. AI BUILD-OUT WATCH Microsoft and Amazon Rose More Than 6%. Data-Center Suppliers Fell. Microsoft (MSFT) rose 6.7% and Amazon (AMZN) 6.1%. Data-center suppliers went the other way. Vistra (VST) fell 13.8%, Vertiv (VRT) 12.9%, Quanta Services (PWR) 11.7% and CoreWeave (CRWV) 9.9%. Texas added a separate risk. Democrat Gina Hinojosa unseated Gov. Greg Abbott after pledging to pause data-center approvals until lawmakers pass new protections. Abbott had already halted new grid connections in August, though he never issued a formal moratorium. Hinojosa takes office in January and has not said how a pause would work. Investor Signal The moves fit a read that slower spending helps the spenders and hurts their suppliers. A slower build-out would leave Microsoft and Amazon more cash and cost Vistra and Vertiv orders. The pledge covers new approvals, so projects already being built are less exposed. The governor-elect's first policy statement and Vistra's results on Nov. 6 will show whether the market priced a pledge or a plan. OIL WATCH Brent Fell Below $100 With No Deal With Iran Brent crude fell more than 8% to near $95 a barrel, its first trade below $100 in about a month. U.S. crude dropped about 8% to near $88, its third straight daily decline. Nothing was signed. President Trump said there were no immediate plans to strike Iran, and Vice President JD Vance blamed the war for Republican losses. Iranian officials rejected Washington's latest reply on the Strait of Hormuz. United Airlines (UAL) rose 8% and Delta Air Lines (DAL) 7.2%. Exxon Mobil (XOM) fell 4.5% and Chevron (CVX) 3.7%. Investor Signal The drop followed statements from Washington, and no agreement backs it. Gulf exports have resumed, but U.S. crude stockpiles fell for a fifth straight week. Cheaper fuel helps airlines and the inflation outlook only if prices stay down. Iran's reply through Qatar's mediators is the next test. RATES WATCH Treasury Dropped Two Words From Its Guidance. Bets on a Fed Hike Rose. The Treasury kept note and bond auction sizes unchanged but dropped "at least" from its promise to hold sizes for the next several quarters. It raised the cap on buybacks that support trading in older bonds to $70 billion this quarter, from $38 billion last quarter. Its advisory committee said bigger auctions will be warranted later in fiscal 2027. ADP said private employers added 86,000 jobs in October, above forecasts. The ISM services index slipped to 54.5, and new orders fell to 55.9 from 59.8. Its price gauge eased to 73 from 74. Kalshi's December hike contract rose to about 80 cents. The 10-year yield fell about 6 basis points. Investor Signal Bonds rallied as oil fell and new orders cooled. The hike bet rose anyway, with service prices still above 70. The new wording gives Treasury more room to change auction sizes, in either direction. Friday's payrolls report is the first test of the hike bet, and the 3-year, 10-year and 30-year auctions on Nov. 9, 10 and 12 follow. BITCOIN MINERS WATCH Riot Signed a $28 Billion Lease and Rose. Its Peers Fell. Riot Platforms (RIOT) rose 9.6% after disclosing a 15-year lease of its Corsicana, Texas, campus to an AI lab it did not name. The lease has a total contract value of about $28 billion. Cipher Digital (CIFR) fell 20%, Galaxy Digital (GLXY) 17% and CleanSpark (CLSK) 17%. Hut 8 (HUT) lost 23% on a day it also reported results. Bernstein cut its price targets on seven miners by 35% to 54% after the Texas result. Riot has been selling bitcoin to fund construction. It sold 20,264 coins this year for about $1.5 billion and held 2,418 at Sept. 30. Bitcoin rose back above $80,000, up about 3.6%. Investor Signal The market appears to be valuing miners as landlords for AI companies. A newly signed lease was rewarded, while companies with Texas growth plans awaiting approval fell. Morgan Stanley (MS) flagged more Texas uncertainty for Cipher and Galaxy's Helios II project. Riot is paying for its shift partly with the bitcoin it used to hold. New leases signed by its peers would show whether investors keep paying for signed contracts. PARTNER SPOTLIGHT Why Did Trump Just Ban America's Most Powerful AI?It's not Nvidia. It's not OpenAI. It's not Google. It's a San Francisco AI lab whose technology is used by eight of the ten largest companies in America — and which Bloomberg calls the highest-revenue AI company on earth. Trump banned it from every federal agency and the Pentagon blacklisted it. The reason isn't what you think. Full details here. HEALTH CARE WATCH CVS Plans to Split in Two. Its Shares Fell 12.5% as the Sector Rose. CVS Health (CVS) said it intends to separate into two public companies in the first half of 2028. One would include the Aetna insurer and the Caremark benefit manager. The other, CVS Pharmacy, would keep about 9,000 stores and MinuteClinic. It also raised its 2026 adjusted earnings outlook to at least $8.20 a share, from $7.90 to $8.10. The release's standard risk language says there is "no assurance that the separation will occur." The stock fell 12.5% to $79.96, erasing about $14.6 billion of market value. The health-care sector rose about 3%. Investor Signal CVS trailed its sector by about 16 points, and the split and the quarter arrived together, so the cause cannot be separated. Barclays called the timing favorable, with the pharmacy business growing again. Morningstar (MORN) pointed to lost synergies and the cost of standing up two companies. The split would also separate the drugstores from the benefit manager, a pairing some states have moved to restrict. The Form 10 filing should show how each company will be funded and what the split will cost. CLOSING LENS Wednesday's market appeared to favor what is already locked in. Microsoft, Amazon and Riot had cash or a newly signed contract, and they rose. Data-center suppliers and miners with Texas growth plans were marked down. Oil fell without an agreement behind it. Bonds rallied while the hike bet rose. None of the new pledges tied to the selling has been enacted. Investors moved anyway. Big Pharma Stopped Watching AI Drug Discovery. It Started Paying.Sanofi has paid one AI biotech $144 million in upfront and milestone payments. Eli Lilly invested $40 million in another. Bristol Myers Squibb is putting a third company's AI co-scientist to work inside its own research organization.
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