• Stocks: Wall Street staged a partial comeback from Thursday’s bloodbath. The Nasdaq climbed as chipmakers rallied, while software stocks remained under pressure and the Dow lagged behind.
• Bonds: Treasury yields rose as a stronger-than-expected October jobs report reinforced bets on a December Fed rate hike.
• Commodities: Gold futures slipped as the upbeat jobs report lifted the dollar, while oil prices remained volatile amid uncertainty over Middle East supplies.

Economy

Morning Brew Inc.

After a tumultuous week of blue tsunamis and AI bloodbaths, Friday’s jobs report threw us one more curveball: Employers added 165,000 new positions in October, far more than anyone expected.

Unemployment also ticked down to 4.1%, while September’s initially lackluster gain of 29,000 jobs was also revised up to 60,000. All in all, it adds up to “a strong rebuttal to fears that the economy is heading into a meaningful slowdown,” Principal Asset Management Chief Global Strategist Seema Shah said in a statement.

Professional and business services led the hiring charge, piling on 70,000 jobs—nearly five times the sector’s average monthly gain of 15,000 over the past year. This catch-all category includes everyone from lawyers and accountants to consultants and temporary staff. That last group is especially encouraging, since companies often bring on temps before making permanent hires—a possible sign of many more jobs ahead.

Other industries got in on the hiring spree, too: Healthcare added 42,000 jobs, transportation and warehousing 25,000, and manufacturing 19,000. Retailers also started stocking up on seasonal help, adding 18,000 jobs ahead of the holiday shopping frenzy.

Friday’s blowout jobs report wasn’t entirely out of left field. Other labor-market indicators released earlier in the week also pointed to steady hiring, if at a more modest pace. The Labor Department’s monthly Job Openings and Labor Turnover Survey (JOLTS) reported that job openings also edged higher. Meanwhile, private employers added 86,000 jobs, per ADP, while layoff plans fell to a three-year low.

That’s the good news. Here’s the bad

More Americans are working, and that’s great. Problem is, their paychecks aren’t keeping up with prices: Average hourly earnings rose 3.1% from a year earlier, trailing inflation’s 3.7% pace. As Navy Federal Chief Economist Heather Long pointed out on X, “Inflation has wiped out all wage gains for seven straight months.”

The Federal Reserve has been on the warpath to tame inflation, and Friday’s strong jobs report gives the central bank more reason to raise interest rates at its December meeting. Traders seem to agree: Following the BLS report, they raised the odds of a December rate hike to nearly 80%, according to the CME FedWatch tool.

Still, a rate hike could rattle an already shaky stock market still reeling from the results of Tuesday’s midterm elections. It could also make borrowing more expensive for businesses and consumers. Homebuyers in particular could lose out: Mortgage rates have climbed over the past six months, but began edging down over the past three weeks. That relief could vanish if the Fed decides to raise rates.

The bottom line: A strong economy that can’t call it quits is a double-edged sword. It’s a welcome sign for workers worried about layoffs. But it’s also a bummer for anyone praying for cheaper mortgages to buy a house, or for holiday shoppers hoping to put their gift haul on plastic with lower credit rates.—JD

      

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Stocks

🟢 What’s up

• Intel, AMD, and Micron Technology gained 7.71%, 11.04%, and 5.12%, respectively, as investors bought the dip in chip stocks after yesterday’s brutal tech selloff.
• Lam Research surged 8.23% after its board approved $25 billion in share buybacks and a quarterly dividend of 33 cents per share.
• IREN rallied 20.02% on stronger-than-expected quarterly revenue, with its AI cloud business growing 182% from the previous quarter.
• Cloudflare soared 9.91% thanks to a 39% jump in quarterly revenue and an improved full-year outlook.
• Moderna gained 5.27% on better-than-expected third-quarter earnings.
• AST SpaceMobile popped 6.92% and Firefly Aerospace jumped 36.80% following a roughly $1.3 billion agreement for Firefly to supply 36 rocket engines and license its technology to AST.

🔴 What’s down

• Axon Enterprise plunged 18.18% after missing earnings expectations and cutting full-year outlook over delays in federal deployments of its AI-powered counter-drone platform.
• Microchip Technology sank 10.02% on disappointing quarterly guidance that overshadowed its latest financial results.
• Atlassian dropped 16.15% as its outlook pointed to slowing data center revenue growth, expected to decline roughly 14% in the current quarter.
• Lyft slipped 4.20% following a mixed quarterly earnings report that disappointed investors.

Stock of the day

Airbnb isn’t scared of AI travel agents. Yet.

Illustration: Shannon May, Photos: Adobe Stock

Don’t let your boss hear this: Most of Airbnb’s user traffic comes during working hours, when people are apparently busy planning vacations instead of answering emails.

That’s precisely why CEO Brian Chesky isn’t losing sleep over AI agents taking over the travel industry. Reporting quarterly earnings today, Chesky said that of Airbnb’s nearly 500,000 daily bookings, a “non-material” number comes from third-party AI agents like Meta’s Muse and Instinct. As it turns out, vacation planning might be one chore people actually enjoy. Airbnb says 80% of its travelers like researching trips, typically browsing a dozen listings and scrolling through 25 photos per property.

The bots are checking in

That’s not to say Airbnb is anti-robot. The company announced plans to launch its own travel-specific AI agent in the first half of 2027, complete with maps, photos, itineraries, and booking assistance. AI already handles about 40% of the company’s customer support issues, helping cut support costs per booking by more than 17%.

The rest of the business had a solid quarter, too. Airbnb shares jumped 11.67% after the company reported a 19% revenue increase to $4.87 billion, its fastest growth in over three years.

AI may be best at taking over travel’s more boring to-dos, like comparing prices and chasing refunds, rather than replacing the fun of picking a destination. For Airbnb, keeping travelers browsing might be just as valuable as helping them book. Your spreadsheet can wait, but dreaming about Santorini can’t.—HC

Earnings

Morning Brew Inc.

DraftKings is making a costly bet on the future of gambling, and Wall Street isn’t liking the odds.

The sports betting giant reported third-quarter earnings yesterday, with revenue rising 16% to $1.33 billion even as its net loss nearly doubled to $469 million. But its outlook was the dealbreaker: DraftKings slashed its full-year adjusted profit forecast, once $700 million to $900 million, to just $175 million to $275 million, sending shares plunging 21.30%.

The massive cut largely reflects the company’s plans to invest up to $700 million in its prediction-markets business this year as it races to compete with upstarts Kalshi and Polymarket. Unlike traditional sportsbooks, which primarily take bets on sporting events, prediction markets allow users to trade contracts tied to everything from football games to interest-rate decisions. They can also potentially reach customers in states where traditional sports betting remains illegal.

A betting bonanza

But before accusing DraftKings of having a gambling problem, consider the potential payout. Prediction markets are booming, and this week’s midterm elections offered a glimpse of just how lucrative the opportunity could become.

• Kalshi recorded more than $2.5 billion in election-related trading volume, nearly double its total during the 2024 presidential election.
• Polymarket handled nearly $700 million in election-related trading.

Both platforms correctly anticipated Democrats taking control of Congress, and Kalshi touted a 98% success rate for its favored candidates across hundreds of races. But the platforms still underestimated the scale of Democrats’ victories, earning them a less-than-perfect review from Wake Forest University economics professor Koleman Strumpf. “I’d give the markets a B,” he told Bloomberg.

Elections are just one piece of the business: Over the 10 days surrounding the midterms, Kalshi processed $25.3 billion in parlay trading, mostly tied to sports, compared with $1.1 billion in election contracts over the same period. That puts prediction markets squarely in competition with DraftKings’ core sports betting business.

High stakes ahead

DraftKings expects its prediction-markets business to generate $650 million to $750 million in revenue next year, but turning those sales into profits could take longer.

“We expect to generate significant excess free cash flow in 2027, even after funding our Predictions investment, and we expect Predictions itself to generate free cash flow in 2028,” CEO Jason Robins said on a call with investors. For investors, perhaps all that’s left is to cross their fingers, watch the roulette wheel spin, and hope portfolios land in the green.—SY

      

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News

• Tesla is sending the Cybertruck to the junkyard next year, clearing room at its Texas factory for a very different kind of ride.
• Anthropic hasn’t even gone public yet, but Wall Street’s AI bloodbath may have already knocked as much as $300 billion off its potential IPO valuation.
• Democrats are planning to investigate JPMorgan Chase’s ties to Jeffrey Epstein once Dems take power in Congress, with one top executive potentially facing renewed scrutiny.
• Millions of Medicare patients could see prescription drug premiums jump 50% next year—although one pre-December move could ease the sticker shock.
• Cream cheese is getting creamed by cottage cheese, thanks to America’s protein-maxxing obsession.
• BlackRock CEO Larry Fink says the American dream favors investors over workers, with one eye-popping comparison showing how the gap has grown.

Calendar

Monday: Constellation Energy and Occidental Petroleum lead energy earnings, while Take-Two Interactive and Skydance offer a look at entertainment spending. KKR and Barrick Mining also release quarterly numbers.

Tuesday: All eyes will be on October’s consumer price index—plus, we’ll get small-business optimism and the New York Fed’s household debt report. Honda, CoreWeave, and Vodafone report earnings.

Wednesday: Franco-Nevada and Vylor release quarterly numbers.

Thursday: Cisco, Applied Materials, and Cerebras headline tech earnings, with Nu Holdings, Dillard’s, and Brookfield also reporting. Weekly initial jobless claims will provide a fresh check on the labor market, while existing home sales offer clues about housing demand.

Friday: Inflation takes center stage again with the producer price index. Japan’s banking giants Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho close out the earnings week.

recs

📝 Warren Buffett’s successor has the majority of Berkshire Hathaway’s portfolio in just seven stocks—and most of them have nothing to do with tech.

💰 2027 tax brackets have officially dropped. See where you stack up.

💲 These two stocks suddenly look cheap after the AI selloff, so buy them before their discounts disappear.

🛡️ Global debt is in overload. But a few smart strategies can guard your portfolio even if the situation turns riskier.

📲 Apple may owe iPhone owners nearly $100 each—here’s where you can claim yours.

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