Stocks are modestly higher in early trading. So are crude oil, gold, and silver. The bond market is closed for Veterans Day, while the dollar is higher.
CoreWeave Inc. (CRWV) has been a poster child of the AI stock surge…and the AI stock slump. Late yesterday, the neocloud company reported better-than-expected revenue of $3.7 billion and backlog of $133 billion. That sent the stock higher in early trading, as did reassurances about alternative ways the firm could raise money to fund its data center buildout.
Yields on CoreWeave bonds have been soaring thanks to rising default fears, making debt financing prohibitively expensive. CoreWeave stock was down 36.6% year-to-date as of yesterday’s close, compared with a 10% rise in the Invesco QQQ Trust (QQQ). But it was recently spiking 14%, fueling broad-based gains in “AI Trade” stocks.
CRWV (Red), QQQ (Green), YTD % Change
Source: TradingView
Elsewhere in the Artificial Intelligence space, OpenAI is holding off on an initial public offering (IPO) for now even as Anthropic is charging ahead. But it’s still releasing financial results – and they show mounting losses. Third-quarter revenue rose 50% consecutively to $10 billion at the ChatGPT maker. But its adjusted operating loss rose to $10.9 billion. In its last private-market funding round, the firm was valued at $1.25 trillion.
Could the Federal Reserve finish off 2026 with a 50-basis point hike? Chatter is increasing about a larger-than-usual move given persistent inflation pressures. The core Consumer Price Index (CPI) rose a greater-than-expected 0.3% in October, with upward pressure evident in a wide range of goods and services. That suggests fuel prices aren’t the only thing to blame.
Rate futures markets are now pricing in around a 15% chance of a 50 bp increase at the Fed meeting that concludes Dec. 9. A week ago, the market-based probability was around zilch, according to CME FedWatch. Policymakers could also opt for a 25 bp move in December, while signaling another 25 bp hike is likely at the meeting ending Jan. 27, 2027. The chance rates will be 50 bps higher by then is hovering around 60%.
