CoreWeave's Debt Spiral Drags AI Infrastructure Into the Red
CoreWeave shares tumbled 16% as the yield on its 2032 bonds hit a record 15%, raising the prospect of a debt restructuring at the heavily leveraged AI cloud company. CoreWeave's debt and lease obligations ballooned to roughly $52bn by the end of June, up from about $15bn a year earlier, with quarterly interest costs more than doubling to $640m. The sell-off rippled across AI infrastructure names, dragging Oracle down nearly 9%, Nebius 11%, and Iren 12%, with Gartner projecting 80% of neoclouds will be out of business by 2030.
US Inflation Hits 3.7% as Real Wages Shrink for Sixth Month
US consumer prices rose 3.7% in September from a year earlier, the fastest pace since May, led by a 9.1% monthly jump in gasoline. Core prices climbed 0.3% month-on-month, hotter than expected, while real average hourly earnings fell 0.7% year-on-year, the sixth straight monthly decline. The 10-year Treasury yield spiked above 5.3% on the print, with markets now pricing a near 50/50 chance of a Fed rate hike in October.
CFTC Probe Into Pre-Strike Oil Trades Ordered Shut Down
Investigators at the US Commodity Futures Trading Commission were ordered to retract their analysis of potential insider trading tied to billions of dollars in oil trades placed just before the president announced a pullback on missile strikes on Iran. A senior adviser told staff to 'retract the referral, throw it away', an instruction described as unprecedented at the agency. Parallel probes at the SEC and DOJ touching the Trump family were also halted, with lead investigators subsequently departing.
Bank of America Profits Slip on $1.2bn Laundering Penalty
Bank of America shares fell nearly 5% after the lender missed profit expectations and absorbed a $1.2bn charge tied to failures in monitoring money laundering. The penalty overshadowed the quarterly results and added to pressure on US bank stocks as Treasury yields climbed on the hot inflation print.