👋 ICYMI
This week, the S&P 500 closed at its first record since August, a day after the 10-year Treasury yield touched 5.349%, its highest level since April 2002. On Wednesday the 10-year went further and reached 5.35% before a strong auction pulled it back. Stocks are pricing AI earnings. Bonds are pricing oil and a Fed that says it isn't done.
Thursday opened with Brent up 5% to $105.3 after The Atlantic reported that the White House had asked the Pentagon for options to strike Iran before the midterms. Fed Governor Christopher Waller added a warning the same morning: "If the economic data continue to come in as expected, I anticipate additional hikes to support a timelier return of inflation to our 2% goal." Infrastructure Capital Advisors' Jay Hatfield called the bond move "a momentum selloff": "Usually the 10-year trades 100 over terminal Fed funds. So we could, on that basis, we could go [higher]."
🔁 Market Movers
⚛️ Google Buys 3,590 MW From Constellation, but Only 890 MW Is New
Google $GOOG ( ▲ 0.87% ) signed a 20-year deal for 890 MW of new capacity from uprates at 11 Constellation $CEG ( ▲ 4.56% ) reactors in Illinois, Pennsylvania and New Jersey, plus a 15-year agreement for 2,700 MW from the existing fleet. The first uprate is due by 2028, and Constellation will invest more than $4.3 billion. The companies called it a direct response to PJM's "bring your own power" proposal for data centers. Constellation closed up 12.25% at $300.40 on Tuesday, after entering the day down 24% for 2026. The same day, the Energy Department offered Vistra $VST ( ▲ 3.42% ) up to $4.2 billion for uprates adding 433 MW. Vistra rose 10.77%, and utilities went from one of the two worst S&P 500 sectors on Monday to the best on Tuesday. It was Constellation's second uprate deal in a week: Amazon $AMZN ( ▲ 3.29% ) signed for 690 MW at Calvert Cliffs on Sept. 30, including a 190 MW uprate due between 2030 and 2032.
📈 S&P 500 Record, With Nvidia Doing the Lifting
Nvidia $NVDA ( ▼ 0.52% ) is back at a record and just shy of a $5.8 trillion market value. It is up 30% this year, by far the biggest contributor to the S&P 500's 2026 gain, and still trades at less than 18 times forward earnings, close to its lowest multiple in 10 years. "Nvidia is attractive on both a growth basis and a value basis, and it looks like a haven from any damage higher rates could do to the economy," said Clearstead Advisors' Jim Awad. Even so, Nvidia lags its own sector: the Philadelphia Semiconductor Index is up 87% in 2026. Micron $MU ( ▼ 0.66% ) rose 4.06% to $1,088 on Wednesday and was the S&P 500's third-best performer on a down day.
🏛 Fed Minutes: "Most Participants" Want One More Hike This Year
The minutes of the September meeting said "most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end." They didn't say whether that means October or December. Twelve of 18 officials had projected one more quarter-point hike this year, and four projected two. The median shows no cut in 2027. Several policymakers saw the current rate as too low to restrain the economy. Many also said financial conditions, rising stock prices included, "appeared to be supportive of economic growth." In other words, the rally is now one of the Fed's arguments for hiking. Waller said Thursday that hikes "do not need to come at consecutive meetings," and futures priced about a 17% chance of a hike at the Oct. 27–28 meeting and about 85% by December. Friday's University of Michigan survey gave the hawks more to work with: year-ahead inflation expectations rose to 4.7% and long-run expectations to 3.5%, both the highest since May, while the current-conditions index fell to a record-low 44.7.
🤝 Merger Monday: $28 Billion of Deals, Mostly Paid in Cash, With Yields Above 5%
Schneider Electric agreed to buy PTC $PTC ( ▲ 0.37% ) for $205 a share in cash, a 42.3% premium that values PTC's equity at about $22.6 billion. It is paying with roughly €16–17 billion of new debt and €5–6 billion of new equity. C.H. Robinson agreed to buy RXO for an implied $30.25 a share in cash and stock, or $5.8 billion, targeting $300 million of cost savings from its "Lean AI" operating model. PTC jumped 33.49% and RXO 22.54%. Both buyers are borrowing at the highest rates in two decades to buy assets they say AI makes more valuable.
👀 Signals I'm Watching
🛢 Brent Topped $105, Then Isaias Shut 72% of Gulf Oil Output
Thursday's 5% jump to $105.3 came from three directions: the Iran strike-options report, a tanker hit off Qatar on Wednesday, and Shell $SHEL ( ▼ 0.02% ) and Chevron $CVX ( ▲ 0.2% ) shutting Gulf of Mexico output ahead of Hurricane Isaias. Hormuz is getting more dangerous even as oil gets through: 11 tankers were attacked in the week to Oct. 4, the most since the war began, and five more this week, while Kpler put Hormuz exports at 8.5 million barrels a day in the week to Wednesday, about 40% below prewar levels. Regular gas is $4.36, up more than 45% since Feb. 28. The pass-through is already visible: ISM's services prices index hit 74, the highest since July 2022, and respondents mentioned fuel costs twice as often as any other issue. September CPI lands Wednesday, Oct. 14. Brent didn't hold $105. On Thursday, Trump said no attack on Iran was planned before the Nov. 3 midterms and called talks with Tehran "productive", and Friday's dip on that pledge reversed as the storm closed in. Isaias made landfall near Destin, Florida, around 8:30 p.m. CT Friday as a Category 2 with 105 mph winds, after producers shut in about 72% of Gulf of Mexico oil output (roughly 1.5 million barrels a day) and 59% of gas, and evacuated 129 platforms. By Saturday morning it had weakened to a post-tropical cyclone over Alabama. Earth Science Associates puts the lost output at about 7.2 million barrels, and restarts now depend on damage inspections. About 500,000 barrels a day of refining capacity, including Chevron's Pascagoula refinery, sat in the storm's path, which matters most for diesel. The Gulf of Mexico will restart within days. The other Gulf is moving the wrong way: on Saturday Riyadh's airport was attacked again and evacuated, after a week of Houthi strikes that followed a Saudi-led offensive in Yemen. The Houthis' gains along the Red Sea give them a better view of the shipping lane that has been the main alternative to Hormuz.
💳 AI Capex Is Moving Into the Bond Market
SpaceX $SPCX ( ▲ 1.25% ) is in talks with Apollo and banks to finance a $40 billion purchase of Nvidia GPUs, mostly with investment-grade debt and likely using the chips as collateral. Since SpaceX's $25 billion bond sale in June, AI-related bonds have sold off and credit spreads have widened. Investors are demanding a higher yield to fund the buildout, after a string of issues from Meta $META ( ▼ 0.31% ), Amazon and Google $GOOG ( ▲ 0.87% ). Lenders are assuming GPUs hold their value for about seven years. That assumption now underpins a growing share of AI spending.
🏦 Earnings Season Starts Tuesday Against a ~30% Bar
Analysts expect S&P 500 companies to report nearly 30% EPS growth for Q3, which would be a third straight quarter above 25%, according to FactSet. JPMorgan $JPM ( ▲ 0.47% ) reports Tuesday, Oct. 13. PepsiCo $PEP ( ▼ 1.85% ) gave an early read on Thursday: it beat on EPS ($2.34 vs. $2.29) and revenue ($25.27 billion vs. $24.96 billion) but cut its 2026 core EPS growth forecast to 2.5%–3.5%, from the low end of 5%–7%. North American beverage volume fell 2%. The ~30% headline will come mostly from AI and semis, while consumer names are guiding down. The chip side gets tested the same week: ASML $ASML ( ▲ 0.6% ) reports Wednesday and TSMC $TSM ( ▼ 1.02% ) Thursday.
$BSP stock weekly performance
Bending Spoons ($BSP) has been one of the most interesting names I've been following lately. Last week I opened a new position — and Investment Club members were the first to know. The stock surged nearly 20% in the days that followed.
If you'd like to be in the room when we share opportunities like this, you can become a member here.
George
⚠️ Red Flag to Note
The 10-Year Auction Cleared at 5.3%, the Highest Since 2000
By the usual measures, Wednesday's $39 billion 10-year auction went well. Indirect bidders, a group that includes foreign central banks, took 80.3% against a 72.4% average, and dealers were left with just 2.5%. It also priced at 5.3%, the highest auction yield since 2000. That's the red flag: demand for Treasuries is still there, but it now takes a 24-year-high yield to bring it out. The selloff isn't confined to the U.S.: on Thursday the UK 10-year hit 5.515%, its highest since July 2007, after the UK 30-year touched 6.036% on Wednesday, its highest since January 1998. The cost reaches Main Street directly. The 30-year mortgage averaged 7.28% on Oct. 1, up from 6.34% a year ago. A record S&P 500 on top of 24-year-high borrowing costs holds only as long as earnings grow faster than the discount rate rises.
🔍 Insider Transactions I’m Watching
Ticker | Insider | Action | Value | Why It Matters |
|---|---|---|---|---|
Berkshire Hathaway — 10% Owner | Buy | ~$192.6M | Berkshire bought about 2.42 million Lennar shares on October 1–2 at weighted-average prices of $77.12–$81.90, per its Form 4. That's its fourth Lennar purchase filing since September 17, about $595M in total. Some of the buying happened the same day Hunterbrook published a short report questioning Lennar's late-quarter home sales to its spinoff Millrose. Lennar then fell 6.73% on Monday to $74.44, its lowest close since October 2022. | |
Tor Olav Trøim — Director | Buy | ~$12.6M (2 purchases) | The Borr Drilling director bought 1.5 million shares at $4.13 on October 5 and another 1.5 million at $4.24 on October 6 through Drew Holdings. That comes on top of 1.15 million shares in mid-September, and he now holds about 33.5 million shares indirectly. | |
William A. Newlands — Chairman | Buy | ~$201K | The Hormel chairman bought 10,000 shares at $20.10 on October 5, per his Form 4, raising his stake 15% to 76,375 shares. The stock sits just above its 52-week low of $19.42. Three days later, PepsiCo cut its EPS outlook on weak North American volumes. A chairman buying into packaged food now is a small but direct bet that the squeeze on U.S. food volumes doesn't get worse. |
📬 Closing Note
The S&P 500 closed at a record on Tuesday. What’s holding the index up is specific. Nvidia trades at under 18 times forward earnings. Google signed a 20-year contract to pay for new reactor capacity. Schneider and C.H. Robinson are still willing to borrow billions for assets they say AI makes more valuable.
What's pushing against it is just as specific. Brent settled at $104.72, Isaias took about 72% of Gulf oil output offline, and the White House turned to Moscow for diesel. Most Fed officials want another hike this year and count rising stock prices as a reason.
Next week puts numbers on both sides: September CPI on Wednesday, the last big print before the Oct. 27–28 meeting, bank earnings from Tuesday against a bar of nearly 30% EPS growth, and ASML and TSMC on the AI side.
If you missed Wednesday's deep dive, it covers why GRAIL’s $GRAL ( ▲ 6.01% ) rally might be just the beginning, as Galleri's regulatory progress could open up a much bigger market.
Stay patient. Stay selective. And let the data guide the story.
Until next Sunday —
