Beijing time, Oct. 17, 09:04 | Overnight through this morning
Today is Saturday, and traditional markets such as U.S. stocks and Treasuries are closed. Here’s a summary of Friday’s U.S. market close and the latest developments this morning.
U.S. stocks fell sharply: the S&P 500 dropped 1.22%, the Nasdaq fell 2.19%, and the Dow lost 0.55%, with tech stocks remaining the biggest drag.
Semiconductors fell for an eighth straight day: the SOX dropped another 2.5%, Broadcom fell 3.6%, and chip stocks continued to significantly underperform the broader market.
CoreWeave plunged 12%, bringing its five-day loss to about 25%; its bond yields topped 15%, as concerns over AI financing risks continued to mount.
The Nasdaq fell more than 4% this week as the market shifted from focusing on “AI demand growth” to reassessing debt, cash flow, and returns on capital.
Anthropic's financing costs are also rising: It reportedly plans to offer Blackstone a yield of over 10%, borrowing around $9 billion to buy chips.
Tesla's new Roadster failed to lift the stock; TSLA instead fell around 2.5% on Friday as the market focused on production and profit delivery.
Warsh gave no signal of a rate hike in October. The market currently sees about an 83% probability that the Fed will leave rates unchanged this month.
The dollar continues to retreat: The DXY fell to around 101.87, down about 0.35% for the week, ending a streak of gains that lasted more than a month.
The U.S. budget deficit is nearing $2 trillion: The fiscal 2026 deficit reached $1.99 trillion, while interest payments on debt hit a record $1.36 trillion.
Clear sector rotation is underway: U.S. equity funds saw weekly inflows of around $13 billion, while tech funds recorded net outflows of $5.2 billion.
Gold was broadly flat on Friday, with spot prices around $4,165. Silver was around $57.05, while precious metals overall still posted losses for the week.
International oil prices suddenly accelerated higher: Brent rose 3.7% to $109.86, breaking above $110 intraday; WTI gained 3.5% to $101.41.
A key Saudi oil route faces another threat: A ballistic missile headed toward Yanbu was intercepted, with no damage to energy facilities reported so far.
Ukraine strikes a Russian refinery again; a major crude distillation unit at the Ryazan refinery has been shut down, raising the risk to refined fuel supplies.
U.S. moves to curb oil prices: The Energy Department plans to release up to another 17 million barrels of crude from the Strategic Petroleum Reserve, while the IEA is also advancing stock releases.
BTC is still fluctuating near $81,600. It continued to weaken overall on October 16, and the crypto market has yet to show a clear Risk-on signal.
Strategy faces the risk of being removed from MSCI indexes. If dropped from the relevant indexes, around $2.8 billion in passive index funds could be affected.
Deutsche Bank is preparing to launch crypto custody services, initially supporting BTC and ETH, with plans to expand to stablecoins and Asian markets later.
Iran continues to circumvent the U.S. energy blockade, with data showing that some LPG and jet fuel are still being exported through covert channels.
Russia-Ukraine energy tensions escalate again: Zelenskyy criticizes the U.S.-Russia diesel deal, and Ukraine resumes attacks on Russian refinery facilities.
The five key themes to watch today
① AI financing risks: Semiconductor stocks have fallen for eight straight sessions. CoreWeave and Anthropic show that “financing costs” are becoming a new key variable in the AI trade.
② Crude oil nears $110: This is currently one of the biggest macro risks to inflation, Treasury yields, tech stocks, and BTC.
③ The Fed is in no rush to hike rates: A weaker dollar provides some cushion, but the market remains highly focused on whether rates will be raised again in December.
④ U.S. fiscal pressure is mounting: A deficit nearing $2 trillion and interest payments of $1.36 trillion could continue to support the Treasury term premium over the medium to long term.
⑤ Crypto remains weak: BTC has not rallied significantly alongside the dollar's decline. In the short term, flows, trading volume, and OI remain key metrics to watch.
Morning briefing in one sentence:
Oil has surged past the $110 level and AI financing risks continue to spread, triggering another sell-off in U.S. stocks, especially semiconductors. A weaker dollar and the Fed's reluctance to rush into rate hikes offer only a partial cushion.