Investors are growing anxious following a week of strong earnings, driven by fears of aggressive U.S. action against Iran, rising interest rates, and a tech sector rotation. The Nasdaq Composite suffered its worst one-day drop since June, as surging oil prices and concerns over the AI boom's cost pressured stocks. Analysts also point to reports that OpenAI may lower its valuation target for its next fundraising round. Neoclouds like Core Weave saw sharp sell-offs, with debt yields soaring amid worries over borrowing to fund AI bets. Investors are shifting to safe-haven assets, pushing U.S. government bond yields down to around 5%—still above pre-war levels. In Europe, anxiety mounts over France’s finances and potential weekend protests. Traders now give a 90% chance the Fed will hold rates steady next week. Upcoming earnings calls from Google, Microsoft, and Amazon will be scrutinized for signs of AI-financing strain, while Anthropic is expected to file its IPO prospectus soon.
In other news, U.S. lenders have detected unauthorized AI agents accessing customer accounts, prompting some to block third-party tools. Elon Musk reportedly invested $1 billion in Skydance Media, backing the studio led by David Ellison in its acquisition of Warner Bros. Discovery. Law firm Weil Gotshal is in merger talks to create a top-10 practice by revenue. Meanwhile, California’s proposed billionaire tax may raise only $30 billion, far short of the $100 billion projected, drawing fierce opposition from billionaires who have left the state.
Source: New York Times Business · Summarized by HeadlinesBriefing