• Bonds: The 10-year and 30-year Treasury yields each traded just a few basis points higher as investors considered lighter-than-expected US inflation data for August (more on that later)—though yields remain below their recent multi-decade highs.
• Stocks: Slower inflation lowered the chances of the Fed hiking interest rates, which bolstered tech stocks across the Nasdaq, while the S&P 500 and Dow lagged behind.
• Commodities: Oil prices climbed after President Trump denied that he would be willing to ease sanctions on Iran.

Pharma

Morning Brew Inc., Photos: Adobe Stock

For squeamish friends who want to lose weight without a weekly jab, Novo has a solution: Put down the needle and pick up a pill.

In a study presented today, participants who switched from either Novo’s Wegovy injection or Eli Lilly’s Zepbound to the daily Wegovy pill continued to lose weight, shedding another 4.1% of their body weight, or about 8.8 pounds, on average over three months. The findings are some of the earliest real-world evidence that patients can switch from injectable weight loss drugs to oral semaglutide without giving up their progress, suggesting they may not have to sacrifice results for convenience.

That’s welcome news for Novo, whose shares are down 26% this year—and sank again last week after investors came away underwhelmed by its long-term growth plans. Regardless, the stock dropped 1.04% today.

Turning up the doses

In the other corner of the weight loss drug market, Eli Lilly is also trying to give patients something they can’t already get.

The drugmaker’s experimental EloraTZP treatment combines tirzepatide—the active ingredient in Zepbound—with eloralintide, a drug that mimics another hormone that helps people feel full called amylin (it’s also a potential competitor to Novo’s CagriSema, which combines drugs targeting amylin and GLP-1). It’s being developed partly for patients who don’t lose as much weight as they’d like on today’s drugs—and the results were resounding.

In a mid-stage trial, the highest dose of the combination produced an average weight loss of a whopping 23.3% after 48 weeks, compared with 14.8% for the highest dose of tirzepatide alone. But it’s no free lunch: Gastrointestinal side effects were more common, and as many as 27% of patients in some combination groups dropped out, versus 2.9% on tirzepatide alone.

That dropout rate isn’t exactly ideal for a treatment meant to be taken long-term, which may help explain why shares remained largely flat today. The stock is still up 7.87% this year.

Choose your fighter

Novo and Lilly are increasingly placing different bets on what the next generation of the weight loss market will look like.

Novo is betting on a growing group of consumers who want a less invasive approach. While injectables still dominate today, CEO Mike Doustdar thinks pills could eventually capture as much as half of the global obesity drug market by 2030, well above Wall Street estimates of 14% to 40%. Oral drugs already account for about one-third of US obesity prescriptions, and Novo has captured more than 80% of new oral prescriptions.

That could give the roughly $130 billion drugmaker another way to close some of the widening gap with Lilly, now worth more than $1 trillion.

Lilly, meanwhile, is betting there are plenty of patients who care more about squeezing out every extra ounce they can.

Either way, as scales lighten, the stakes for Novo and Lilly will only get bigger.—SY

      

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Stocks

🟢 What’s up

• Apple jumped 1.10% after Bloomberg reported that it plans to launch a long-awaited smart-home hub on Oct. 13, alongside refreshed HomePod mini and Apple TV hardware.
• Hewlett Packard Enterprise gained 3.95% thanks to raising its long-term networking growth outlook and landing a $1.2 billion AI infrastructure order from cloud provider Vultr.
• Snowflake rose 2.80% on its UiPath partnership and expanded collaboration with LSEG under a new five-year, enterprise-wide agreement.
• United Therapeutics popped 12.55% after a judge ruled in favor of the biotech company in a patent infringement lawsuit.

🔴 What’s down

• Moderna plunged 5.35% after Citi downgraded the stock to Sell, saying its huge rally this year has run too far ahead of the potential sales from its cancer vaccine.
• Meta fell 1.84% as enthusiasm around Muse runs into fresh competition from OpenAI, renewing concerns about how much Meta will have to spend to defend its AI-agent lead.
• Jabil sank 10.09% despite posting strong fiscal 2026 growth and issuing an upbeat 2027 outlook, with shares reacting to expectations already elevated by its AI infrastructure boom.
• Cerebras slipped 8.87% after industry speculation raised concerns that OpenAI may be using fewer of its chips than investors expected.
• Mattel lost 4.24% after Paramount Skydance poached the toy maker’s CEO.
• Northrop Grumman fell 4.2% after Boeing won a $20 billion contract from the US Navy to build a next-gen fighter.

Stocks of the day

Shareholders are clucking their tongues

Morning Brew Inc.

Your grocery cart is hitting some bumps in the aisle: Two major food producers—Cal-Maine Foods, the US’s largest provider of eggs, and Conagra, which makes brands like Hunt’s and Marie Calendar—reported earnings today, and the pair offered mixed signals on how inflation might distort your grocery bill.

Cal-Maine is hiding its head in the coop after net sales plunged 42% last quarter thanks to an oversupply of eggs that sent prices tumbling. Cal-Maine shares closed down 0.71% today.

Meanwhile, Conagra reported a mixed bag. Grocery and snacks sales dropped 2.6%, as higher prices failed to compensate for lower sales, though higher-than-expected profits softened the blow. The stock fell 4.74%.

Fridge inflation

You may be wondering: How will this hit consumers’ dinner plates? Inflation is a part of the explanation—though it’s not the whole picture.

For companies like Conagra, relentless inflation has already hurt shoppers’ wallets, driving them away from its products and toward cheaper brands (including generic ones). Plus, thanks to GLP-1s, consumers crave healthier options than ever before—and suppliers like Conagra are scrambling to provide them. The likely outcome: steeper prices to offset falling sales, as well as the reworking or shuttering of labels that don’t meet demand.

But while inflation hits Cal-Maine’s production costs—including things like chicken feed and transport—the company’s bottom line has actually been beat up by oversupply. Last year, spikes in bird flu left shelves empty, and egg shortages pushed prices to record highs. Now it’s swung the other way: Having prepared for more flus, suppliers have too many eggs, sending prices to historic lows. Nationally, egg prices dove almost 60% in September alone.

As you learned in Econ 101, supply and demand rule everything. Conagra is struggling to identify what its customers demand, while Cal-Maine’s oversupply has left shareholders demanding answers.—GR

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Macro

Morning Brew Inc.

Between oil shocks and killer-AI jitters, the economy may look like it’s dressed to scare for Halloween. But beneath the frightening vibes, the numbers suggest we’re doing oddly okay.

Take inflation, which came in cooler than the doom and gloom would suggest. The Personal Consumption Expenditures price index rose 0.3% in August to a yearly gain of 3.4%, well below the expected 3.7%. The Fed’s favorite inflation gauge, core PCE (which excludes volatile food and energy costs), rose to 3% annually, also below forecasts of 3.3%.

The labor market isn’t a horror show, either. Private companies added 90,000 positions in September, per ADP—up from 36,000 the previous month and better than analysts’ consensus of 68,000. Overall, US job openings slid to 7.08 million in August from 7.34 million in July, according to JOLTS. That’s below forecasts of 7.2 million, but still surprisingly resilient for a market weathering historically high gas prices. Layoffs also fell, and the number of employees quitting their jobs held steady, suggesting that people who walk out aren’t all that worried about finding a new gig.

Meanwhile, GDP rose 2.2% annually in Q2—up sharply from the prior estimate of 1.5%—buoyed by higher spending by both consumers and the government, suggesting the economy has more cushion than the headlines let on.

But how does the Fed feel?

Markets cheered this news for good reason: Cooling inflation and a steady labor market lowers the odds that the Federal Reserve will hike rates at its next meeting beginning October 27. According to CME FedWatch, the chances that the Fed will leave rates alone now hover at 62.9%, compared to 49.1% yesterday and 29.1% a week ago.

But is this relief real, or just a head-fake before the next hike?

A lot hangs in the balance. High rates have wreaked havoc with bonds, pushing yields up to multi-year highs. Mortgage rates have also crossed the dreaded 7% threshold, pushing home loan demand to a two-year low. And Fed Chair Kevin Warsh seemed pretty intent on fighting inflation tooth and nail when he declared at the September FOMC press conference, “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”

That’s Fed-speak for: More hikes are coming. But will the Fed do the deed in October, kick this can down the road to its next meeting in December…or punt even further than that?—JD

      

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News

• Robinhood unveiled AI agents that can trade automatically around the clock, part of its latest push to give retail investors tools once associated with institutional trading desks.
• Mattel tapped Condé Nast CEO Roger Lynch as its next CEO, bringing in a media executive as the Barbie maker continues its push beyond toys and deeper into entertainment.
• The FTC opened an industry-wide probe into Anthropic, OpenAI, and other AI labs; its first formal US regulatory action focused on the risks posed by rogue AI agents.
• A consortium backed by payment giants including Visa, Stripe, and Mastercard has officially launched a new US dollar-pegged stablecoin, another sign that traditional payments companies are pushing into digital currency infrastructure.
• Citadel founder Ken Griffin is giving Carnegie Mellon $3 billion, the largest individual donation to higher education in US history, including $2 billion for a new Miami campus focused on AI, robotics, and other emerging technologies.
• The Fed voted to overhaul its bank stress tests, a major win for Wall Street lenders that have long argued the process is too opaque and burdensome.
• Sydney Sweeney-backed sports prediction startup Novig is now worth $2 billion, quadrupling its valuation from earlier this year after a buzzy ad campaign helped put the company on the map.

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Calendar

We’ll run through earnings from Nike, which, based on recent performance, will likely look pretty sluggish. We’ll also hear from Accenture and McCormick & Co., and weekly initial jobless claims will keep our week of labor market data moving.

recs

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