US Futures Steady as AI Spending Questions and Fed Hike Risk Cap the Rebound
Futures hold steady after a one-day bounce
Inflation keeps beating forecasts
The Fed hiked in September, and may not be done
A trillion-dollar AI tab is being paid with debt
CoreWeave: a bond yield at 15%
The clearest crack is in the credit market. CoreWeave shares fell about 15.5% on Oct. 14 to $65.78, close to a 52-week low of $60.55, after the yield on its 2032 bonds touched 15%, a level normally associated with distressed debt. Debt and lease obligations hit about $52 billion at the end of June, up from roughly $15 billion a year earlier, with about $640 million of net interest expense in Q2. The company raised its 2026 capex ceiling by $4 billion in August, to as much as $39 billion; analysts expect nearly $13 billion in revenue this year and a $2.13 billion loss. CEO Mike Intrator told staff the order backlog more than covers the company's debt obligations, adding that markets sometimes "misunderstand and act irrationally."
Chips have lost a trillion dollars in value
The damage is concentrated in AI valuations. The Philadelphia Semiconductor Index dropped 3.1% on Wednesday, its sixth straight decline and a roughly 10% slide — the longest losing run since May 2025 — then fell another 0.9% on Thursday for a seventh down session; chip stocks are on pace to erase more than $1 trillion in market value. Wednesday alone: CoreWeave lost 15.46%, Nebius 10.08%, Oracle 8.83% and Dell 11.27%, about $80 billion combined.
Money rotates out of AI, into health care
Not every tape was red. The Dow led Thursday with a gain of more than 500 points as money moved from compute names into health care and consumer stocks — Eli Lilly rose 3.55%, UnitedHealth 2.79%. Apple closed above $5 trillion in market value for the first time on Oct. 14, at $342.96 — the second company ever after Nvidia. Earnings were mixed rather than weak: JPMorgan posted $15.31 billion of net income, or $5.57 a share, short of the $5.90 consensus and its first miss in nearly three years; Goldman Sachs reported $18.68 billion of revenue and $17.01 a share against an expected $13.02, with equities revenue up 72%. Jamie Dimon said the economy "continued to be fueled by strong business investment and ongoing consumer spending," though the banks warned that higher rates and sticky inflation will bite.
What to watch: Oct. 28 and the earnings wave
Jefferies economist Mohit Kumar warns that a slowdown in AI infrastructure spending could sharply weaken US growth expectations, though he expects earnings season to show corporate demand remains robust. UBS's Ulrike Hoffmann-Burchardi calls the latest bout "more of a recalibration of expectations than a fundamental break in the AI investment story." The calendar is crowded: the Fed decides Oct. 27–28, Q3 GDP and September PCE land Oct. 29, and a heavy slate of tech earnings begins next week. Oil and geopolitics remain the other thread — the US-Iran war is in its eighth month, the Strait of Hormuz previously carried about 20% of the world's oil, and Brent fell 1.6% to $104.42 a barrel on Oct. 15 as WTI slipped 1% to $94.11.
