• Stocks: Indexes all climbed as AI stocks gained during the day, including Nvidia, which reached another new 52-week high and powered the Nasdaq to a new all-time closing record.
• Bonds: Last month, Treasury Secretary Scott Bessent told traders, “I am the house now,” daring bond markets to bet against him. With 10-year and 30-year yields still hovering near two-decade highs, Bessent has changed his tune to, “I can’t control the Treasury market.”
• Commodities: Oil prices fell as more crude exports from the Middle East and a release of oil by G7 nations upped supply.

Tech

Morning Brew Inc, Photo: Cerebras

For a company obsessed with speed, Cerebras’ stock sure knows how to move fast.

Shares of the AI chipmaker jumped 9.08% today after OpenAI CEO Sam Altman called Cerebras a “close partner,” helping reverse some of last week’s 15% slide. Investors had gotten spooked by reports that Nvidia, rather than Cerebras, is powering the Ultrafast mode for OpenAI’s new GPT-6.1 Sol model.

The whiplash points to the bigger trend Cerebras is tapping into: As the AI trade shifts from building models to putting them to work, Cerebras is betting speed can give it an edge.

Faster AI needs faster chips

Cerebras’ answer to faster AI was to build the biggest AI chip ever made. Its wafer-sized processor packs 4 trillion transistors onto one chip, reducing the time data spends moving between separate processors. Its big bet is on inference, the computing that happens when you actually ask an AI model to do something. As AI gets put to work writing code, running agents and tackling other tasks, Cerebras is betting users will pay for answers that arrive really, really fast.

And investors are starting to put a big number on that opportunity. Mizuho estimates that the fast-inference market could reach $550 billion by 2030 and account for roughly 20% of AI workloads.

Since Brew Markets last checked in before Cerebras’ May IPO, that bet has gotten some real-world validation: Its cloud business revenue nearly quadrupled to $126 million last quarter, while core revenue more than doubled to $210 million. Cerebras now has $25.4 billion of contracted business left to deliver, and expects revenue to more than triple next year.

OpenAI is a big reason why: The AI startup has committed to buying 750 megawatts of Cerebras inference capacity from the beginning of this year through 2028, and Cerebras already powers GPT-5.6 Sol at up to 750 tokens per second, as much as 14 times faster than OpenAI’s standard processing.

Room for two?

That’s the good news for Cerebras, but last week’s sudden selloff showed investors the downside.

OpenAI can use Cerebras for workloads where low latency matters and use Nvidia for other tasks—meaning booming demand for fast inference doesn’t necessarily mean Cerebras gets all the business. Nvidia has the scale and a much broader ecosystem spanning training and inference, while Cerebras is making a more specialized bet on workloads where milliseconds matter.

That said, Cerebras is trying to broaden its customer base to companies like Cognition, Lovable, Block, and Figma, while partnering with AMD and Amazon Web Services (AWS). It’s also racing to increase manufacturing capacity more than tenfold this year to meet all those commitments.

Today’s announcement is great for Cerebras, but what matters more is whether the company can diversify beyond OpenAI and turn its speed advantage into durable growth. Cerebras has made speed its selling point—now it has to prove it can scale just as fast.—HC

      

Sponsored By VanEck

Semiconductors cratered nearly 18% in July, as measured by the MarketVector™ US Listed Semiconductor 25 Index, after headlines had investors second-guessing whether all this AI spending would ever pay off. Fair question.

But here’s where it landed: The VanEck Semiconductor ETF (SMH) holds the chipmakers at the center of the rebound. And Nvidia isn’t carrying this alone anymore. AMD, Intel, and Marvell each ripped 180%–215%. Equipment makers like Applied Materials and Lam roughly doubled.

It seems less like bounce and more like a thesis getting proven out.

Micron just posted $54 billion in quarterly revenue, nearly 4x last year, with guidance above Wall Street’s number. Even CPUs crashed the party, with Meta’s MUSE launch popping Intel and Arm 10% in a day. So the doubts came and then scurried away.

Every AI chip needs memory, and only three companies in the world can make enough of it. VanEck likes what’s ahead.

Explore SMH today.

Stocks

🟢 What’s up

• SpaceX climbed 7.63% after a bullish Morgan Stanley call that argued the stock looks cheap ahead of major upcoming milestones.
• Nu Holdings surged 13.03% alongside a broader rally in Brazilian stocks as Flávio Bolsonaro’s surprise first-round election victory lifted hopes for more business-friendly policies.
• Vaxcyte jumped 30.70% after its experimental pneumonia vaccine delivered positive late-stage trial results.
• DraftKings rallied 5.43% on a Bank of America upgrade to Buy that highlighted the revenue potential of its prediction-markets business.
• Harley-Davidson gained 6.68% after Citi upgraded the motorcycle maker to Buy, citing improving retail sales and dealer sentiment.
• Western Digital rebounded 6.34% and Seagate popped 4.49% as Wall Street analysts urged investors to buy the dip following Friday’s sharp selloff.

🔴 What’s down

• C.H. Robinson fell 10.85% after agreeing to acquire rival truck broker RXO for roughly $5.8 billion in cash and stock.
• Intel dropped 2.63% after Elon Musk confirmed that he was in talks with TSMC over his planned chip-manufacturing venture, raising concerns that Intel could face competition on the project.
• Lennar lost 6.69% and Millrose Properties sank 5.42% following a Hunterbrook report that raised questions about business dealings between the companies.
• Sphere Entertainment slipped 13.54% on a Craig-Hallum downgrade to Hold that cited weakening demand for The Wizard of Oz at the Sphere.

Stocks of the day

Soft sell, hard bargain

Morning Brew Inc, Photos: Adobe Stock

Software is strong-arming some big numbers these days. Look no further than Schneider Electric’s $22.6 billion deal to buy PTC.

The French engineering giant is taking over industrial software firm PTC in a bid to expand its software and AI business. In its biggest deal ever, Schneider is paying a hefty premium: It’ll buy PTC at $205 per share in cash, 42% above PTC’s share price at Friday’s close.

It’s one more signal of a reset for the software industry, which has had a volatile year—mainly thanks to concerns that AI will make current products obsolete. And it’s just one of Schneider’s recent software snags, with the conglomerate also acquiring AI data platform Cognite Holding in June. Once PTC is in the mix, Schneider expects to push its software-as-a-service business to about 24% of total revenue, up from 19% last year.

Why Schneider’s going soft

First known for pumping out industrial pieces like fuses and electric panels, Schneider has been supercharged by the data center buildout—supplying hyperscalers with their server racks, hardware coolers, and more. But software helps it go wider: PTC’s design and data products allows Schneider to own the entire industrial lifecycle.

Other industrial giants have made similar moves of late; just see Schneider’s German peer Siemens, whose recent multibillion-dollar acquisitions of Altair Engineering and Dotmatics were also geared toward software.

Schneider CEO Olivier Blum is banking on his soft bet, telling investors the acquisition would make for the industry’s “most complete software and AI powerhouse, bridging the physical and digital worlds.”

But shareholders think that he got taken for a conveyor-belt ride. Schneider’s stock dropped 10.07% today. Meanwhile, PTC took a 33.49% leap—its biggest single-day jump ever.—GR

Investing

Morning Brew Inc, Photos: Adobe Stock

As we approach the US midterm elections, investors are once again wondering whether all the red and blue will be bad news for their green.

Historically, stocks have actually taken election season largely in stride. Since 1938, the S&P 500 has risen in the 12 months after a midterm election 95% of the time, according to Fidelity, with average gains of roughly 14% in the following year.

Even October, despite its reputation for hosting some of the market’s scariest crashes, tends to lose its bite during midterm years. Overall, October ranks as the seventh-best month for stocks since 1950. But during midterm election years, it vaults to the top of the leaderboard, with the S&P 500 gaining an average of 3% and finishing higher nearly 74% of the time, according to Carson Group. November has historically been almost as strong, averaging a 2.7% gain.

Of course, patterns aren’t promises: During President Trump’s first midterm year in 2018, the S&P 500 dropped nearly 7% in October, snapping what had otherwise been a positive streak across the eight most recent midterm-year Octobers.

Pick your poison

The broader market has evidently weathered midterms pretty well, but winners and losers beneath the surface of the index can still be reshuffled by who controls Congress. Luckily for us, JPMorgan Chase has done some of the election-night homework, laying out three possible outcomes and how investors might play each one.

• Gridlock: If Congress is split, major policy changes become harder to pass, which JPMorgan says could leave much of the current market backdrop intact. The bank highlights names like Alphabet, ExxonMobil, and Home Depot as potential winners. Meanwhile, Jefferies argues that a divided government could be especially friendly to Big Tech by making major new AI regulation less likely, favoring established players like Amazon, Microsoft, and Oracle.
• A Democratic flip: A Congress controlled by Democrats could be more supportive of clean energy and healthcare while bringing more scrutiny to AI infrastructure, data centers, and other parts of the tech buildout. According to JPMorgan, potential beneficiaries include Salesforce, Carvana, NextEra Energy, Xcel Energy, and CECO Environmental.
• A Republican hold: If Republicans keep both chambers, JPMorgan projects a friendlier backdrop for AI infrastructure, energy, nuclear power, financials, and defense through deregulation and policy continuity. The bank sees upside for names like Bloom Energy, UnitedHealth, Lockheed Martin, CoreWeave, and Bank of America.

Three outcomes, three potential paths forward. But whatever happens, if the market goes sideways after Election Day, at least we’ll finally have something besides the Fed to blame.—SY

      

Sponsored By VanEck

Chips don’t doubt. Semiconductors tanked 18% in July (per the MarketVector™ US Listed Semiconductor 25 Index) on doubts around AI spending. SMH holds the chipmakers behind the rebound, and now the doubts are dubious. Big players were up 180%, Micron’s memory business posted nearly 4x last year’s post, and Meta’s Muse launch popped Intel and Arm. VanEck likes what’s ahead.

News

• BofA says the “easy money” made betting on the AI spending boom may be over, as investors get more selective about who benefits.
• A gold trader sanctioned by the US appears to still be thriving four years later, with a linked firm accounting for nearly half of Uganda’s gold exports.
• Citi is shortening its junior banker promotion track to two years as Wall Street fights to keep young talent.
• Foxconn’s quarterly revenue jumped 47% to $95.4 billion, beating estimates as booming demand for AI servers continues to reshape its business.
• Community banks sued the OCC over granting national trust bank charters to crypto firms, escalating a fight over who gets to be a bank.
• The Supreme Court is weighing whether cities can sue oil giants like Exxon and Suncor for climate-related damages.
• The average monthly payment on a new car hit a record $787 last quarter, as affordability keeps getting worse for US buyers.

Calendar

We’ve got earnings from Constellation Brands to sip on, and we’ll get a taste of the food industry with an earnings report from French fry giant Lamb Weston.

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🤖 The robots are obsessed. An investment firm instructed AI agents to make as much money as possible—and they bought these stocks again and again.

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🔻 Falling shares, rising opportunities. Morgan Stanley says these beat-up stocks are worth buying now.

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