• Bonds: Treasuries took a hammering after hotter-than-expected October inflation and hawkish Fed comments sent the benchmark 10-year yield above 5%, while the two-year yield headed for its biggest daily jump since April 2025.
• Stocks: Thanks to the inflation data, Wall Street’s post-selloff rebound lost steam, with the Nasdaq leading declines while the Dow and S&P 500 also slipped.
• Commodities: Gold prices tumbled as surging Treasury yields and a stronger dollar dented demand for the precious metal. Oil prices slid to two-month lows on easing fears of further strikes against Iran.

Earnings

Morning Brew Inc, Photos: Adobe Stock

Ever paid extra to get your hands on something before it sold out? SoftBank just learned how expensive that strategy can get when the stakes are in the billions.

The Japanese tech investor reported a $7 billion quarterly loss today, including a $3.7 billion hit tied to equipment it rushed to secure for US data centers, in its first net loss in nearly two years.

As it turns out, getting ahead of the AI gold rush can come with a hefty bill. In today’s investment blitz, companies are competing for more than chips—they’re also racing to secure the electricity and equipment needed to power AI, often years before those investments generate returns.

The early bird gets the bill

SoftBank made $9.5 billion in advance payments for power equipment and manufacturing capacity for US data centers, including a massive Ohio campus intended to serve OpenAI.

After reassessing its plans, the company wrote down $3.7 billion in nonrefundable payments and related costs, though future rebates could recover up to $2.1 billion.

The fallout reached Wall Street, where shares of GE Vernova, a potential turbine supplier for the project, fell following the news. But AI hardware demand hasn’t disappeared: TSMC reported record October revenue, up nearly 60% from a year earlier.

The ripple effect

SoftBank’s bigger gamble involves borrowed money. The company raised $56.5 billion through financing arrangements last quarter, while its financing costs more than doubled.

Its biggest bet is OpenAI. SoftBank has invested $64.6 billion for a roughly 13% stake in the ChatGPT maker, hoping an eventual IPO will deliver a substantial payday. But AI valuations are facing a reality check, with rival Anthropic’s reported IPO valuation expectations falling to $1.4 trillion today, just a shade of its earlier $2 trillion ambitions.

That leaves SoftBank exposed on two fronts: Its infrastructure bets depend on projects moving forward, while its startup investments depend on future valuations holding up. Rising borrowing costs or construction delays could make both harder to justify.

You don’t need to own SoftBank to feel the consequences. US-listed chipmakers, power-equipment suppliers, utilities, and cloud companies are exposed to the same AI spending cycle, while many tech giants occupy a sizable share of Americans’ retirement portfolios. For investors, record chip sales are proof of strong demand, not guaranteed returns. The real question is whether today’s enormous AI spending will generate tomorrow’s profits.

FOMO is expensive. AI FOMO just comes with a few extra zeros.—HC

      

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Stocks

🟢 What’s up

• Game publisher Take-Two Interactive climbed 8.31% as preorders for Grand Theft Auto VI exceeded expectations, overshadowing a slight miss in quarterly bookings.
• Lucid Group gained 4.72% despite missing quarterly earnings and revenue expectations on news that the EV maker secured additional financing from Saudi Arabia’s sovereign wealth fund.
• AAON surged 19.31% on record quarterly revenue and a raised full-year outlook, fueled by a 218% jump in sales of its data center cooling products.
• Securitize rallied 22.38% following plans to acquire River One to expand its tokenization and financing capabilities, despite reporting a wider-than-expected quarterly loss.
• Trump Media jumped 5.42% after reporting a profitable third quarter and a surge in revenue.

🔴 What’s down

• Nvidia fell 5.47% following President Trump’s comments that authorities are investigating CEO Jensen Huang’s alleged relationship with a suspected Chinese spy.
• Microsoft dropped 2.20% after Anthropic unveiled new AI-powered productivity tools that compete with its Office suite.
• Skydance plunged 7.59% after warning that weak performance from its Warner Bros. film slate could reduce fourth-quarter profit by as much as $200 million.
• Digital Turbine sank 35.84% despite beating quarterly earnings expectations, as plans to ramp up its AI and data spending worried investors.
• On Holding slipped 7.49% as its quarterly results revealed slowing sales growth in the Americas and weak direct-to-consumer revenue.

Report of the day

CPI turns up the temp

Morning Brew Inc.

Is it steamy in here or is it just us? New data from the Labor Department finds that inflation remained hot in October—making investors sweat that another rate hike will indeed be cooking up at the Fed’s next meeting.

That’s if investors weren’t sweating already. CPI gained 0.4% last month, slowing from September’s 0.6% increase, but still higher than estimates of 0.3%. Core CPI, which strips out volatile energy and food prices, gained 0.3% for the third straight month.

That’s a key figure, considering the stance that Fed governor Christopher Waller laid out just hours before the data came down: If core CPI were to gain 0.3% or more in October, “Then a stronger policy move may be needed,” he said during a speech in London. “In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting,” Waller added. “Hiking only 25 basis points would put our credibility at risk.”

With the numbers in, it’s looking like the Fed is ready to climb. Traders are now decisively pricing in a quarter-point increase for the Fed’s next meeting in early December, with odds of a half-point raise at more than 10%. It was at zero before the CPI report came down. The TL;DR? Inflation’s temperature is still simmering—and so is the Fed’s patience.—GR

Earnings

Morning Brew Inc., Photo: Adobe Stock

Hims & Hers Health has treatments for everything from hair thinning to erectile dysfunction to weight loss. But the company has one problem it can’t seem to prescribe its way out of: shrinking profit margins.

The telehealth company reported disappointing third-quarter results yesterday, despite revenue jumping 49% to $890 million. Hims & Hers swung to a $33 million net loss from a $15.8 million profit a year earlier and cut its full-year profit outlook. It also forecast fourth-quarter revenue well below Wall Street’s expectations, sending shares plummeting 16.61%.

Here’s what’s weighing on the business:

• Soaring costs: The cost of revenue surged 143%, driven by pricier branded weight loss drugs, higher shipping expenses, and international expansion. Gross margins shrank from 74% to 57%.
• Slowing subscriber growth: Hims lost roughly 100,000 subscribers from the previous quarter after pulling back on US weight loss marketing and changes to its overseas brands.

Star treatment

Hims is betting that a little star power can help revive its slowing subscriber growth. The company announced that neuroscientist and wellness podcaster Andrew Huberman is joining its board, alongside a multimillion-dollar partnership that will see him advise the company and promote its offerings to his millions of listeners.

The move comes amid the internet’s growing obsession with self-optimization, from influencer Clavicular’s extreme looksmaxxing routines to tech entrepreneur Bryan Johnson’s multimillion-dollar quest to slow aging. While their approaches differ considerably from Huberman’s science-focused wellness advice, they’ve all attracted audiences eager to improve their bodies, creating a potentially lucrative opportunity for companies like Hims.

The peptide pipeline

Hims is also betting on another remedy: unapproved peptides.

The company is looking to cash in on the growing biohacking craze, with plans to offer treatments touted for everything from muscle recovery to anti-aging starting this month. The expansion could open up a new source of revenue, though the FDA has raised safety concerns about certain peptides—not to mention that many of their purported benefits remain unproven.

Between its growing treatment menu and its new celebrity partnership, Hims is positioning itself as a one-stop shop for the self-optimization zeitgeist. Now it just needs to maxx the one thing investors care about: profits.—SY

      

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News

• Democrats are already putting Corporate America under the microscope, with some of business’s biggest names headed for congressional scrutiny.
• GLP-1 drugs like Ozempic and Wegovy are getting a new FDA warning about one rare but potentially serious side effect.
• The luxury market may be struggling, but Americans still have time for this particularly expensive obsession.
• IBM is ending visa and green card sponsorship for most jobs in this influential business unit, leaving affected workers with some tough choices.
• Looks like Godzilla is smashing more than buildings.

Calendar

We’ll check in on the mining industry with Franco-Nevada, OR Royalties, AGI, Collective Mining, and Sunshine Silver Mining reporting earnings. Vylor, CGI, and Tetra Tech also release quarterly numbers.

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