• Stocks: Wall Street suffered an AI-fueled bloodbath, with the tech-heavy Nasdaq plunging into correction territory and the Dow shedding more than 1,700 points. Fears over tighter data-center regulations and weakening AI demand erased Wednesday’s post-election rally.
• Bonds: Treasurys surged as investors flocked to the safety of government debt, sending the 10-year yield to its lowest level since early September.
• Commodities: Gold futures extended their post-election rally as falling Treasury yields boosted demand for the precious metal, while oil prices pushed up amid renewed uncertainty over the Iran war.

Earnings

Morning Brew Inc, Photos: Adobe Stock

Nintendo’s Mario has battled giant turtles, fire-breathing dragons, and the occasional angry mushroom. But after four decades of saving the kingdom, he’s facing an enemy that no amount of jumping can defeat: rising memory chip prices.

The real-world boss battle is playing out at Nintendo and Sony, which reported contrasting earnings today as the AI boom threatened to make video game consoles even more expensive:

• Nintendo: Quarterly operating profit fell 16% to $468 million, missing expectations, as Switch 2 sales plunged 41% year-over-year amid higher prices and a shortage of blockbuster games. Stronger software sales helped cushion the blow, and the company maintained its full-year forecast of 16.5 million Switch 2 sales. Shares fell 1.24%.
• Sony: Companywide operating profit jumped 45% to $3.95 billion, beating expectations, while gaming profit surged 83% despite a decline in PlayStation 5 sales. The company raised its annual profit forecast by 9%, sending shares up 6.19%.

The final boss

AI data centers are gobbling up memory chips, pushing prices higher and squeezing supplies for consumer electronics manufacturers. Just two days ago, Apple CEO John Ternus called memory pricing “unprecedented” and warned that costs would keep climbing. That leaves gaming companies with a tough choice: Pass the extra costs on to customers and risk hurting demand, or absorb them and watch their profit margins shrink.

Nintendo, for one, raised the US price of its Switch 2 by $50 to $499.99 in September. The company expects rising component costs and tariffs to add roughly $634 million to its expenses this fiscal year, although it says it has secured enough memory and has no plans for another price hike.

Nintendo’s physical games business faces another potential headache: Taiwan’s Macronix, a major supplier of chips for Switch cartridges, is phasing out ROM production to focus on more profitable memory products (including those used in data centers).

Sony faces similar pressure from rising memory costs, although the PlayStation maker says it has secured enough chips to meet projected sales this year.

The holiday heist

“It’s getting harder and harder to sell video game hardware these days, and only hits help,” Kantan Games CEO Serkan Toto told CNBC. Nintendo released its highly anticipated remake of The Legend of Zelda: Ocarina of Time today, while Sony could benefit from the long-awaited release of Grand Theft Auto VI later this month.

Now that the holiday shopping season is upon us, GTA bandits have a new mission: steal not only shoppers’ hearts, but their wallets, too.—SY

      

Sponsored By State Street Investment Management

You don’t need a personal vault or a stack of gold bars to invest in gold.

Meet SPDR^® Gold MiniShares^® (GLDM^®), an ETF designed to give you exposure to the performance of gold, without the costs and complications of storing physical gold yourself.

With a low expense ratio of just 10 bps, GLDM^® offers a simple way to add gold exposure to your portfolio. You can buy and sell shares just like a stock during market hours, without turning your home into Fort Knox.

One more thing: Gold acts as a portfolio diversifier, with a long history often behaving differently than more traditional assets like stocks and bonds.

If you’re looking for a straightforward way to access gold exposure, GLDM^® is created to do just that. Invest now.

Stocks

🟢 What’s up

• AppLovin surged 31.04% on better-than-expected quarterly earnings and an upbeat outlook, easing concerns about AI disrupting its advertising business.
• Unity Software rallied 14.88% thanks to an earnings beat and 32% revenue growth, fueled by more users creating games on its platform.
• ADMA Biologics climbed 26.05% following stronger-than-expected third-quarter results.
• Warby Parker gained 22.59% after reporting a beat in both top and bottom lines, and announcing preorders for its new Intelligent Eyewear collection.

🔴 What’s down

• Nvidia, Sandisk, and AMD plunged 9.26%, 22.26%, and 17.26%, respectively, as concerns about slowing data center construction and mounting AI spending fueled a broader tech selloff (more on that below).
• Qualcomm sank 9.49% despite beating quarterly revenue expectations, as its warning of weaker margins in its chip-design business disappointed investors.
• Snap plunged 14.02% on weaker-than-expected quarterly revenue, partly due to sluggish advertising sales growth.
• Coherent tumbled 13.04% despite beating quarterly earnings expectations, as concerns about slowing AI data center development weighed on shares.
• Expedia dropped 13.74% despite beating quarterly earnings expectations and raising its full-year outlook, as investors worried about slowing growth in the fourth quarter.
• Zillow fell 10.65% after missing quarterly revenue expectations and reporting a larger-than-expected loss.
• Dutch Bros sank 21.41% following a cut to its full-year profit outlook, as weaker-than-expected same-store sales raised concerns about consumer demand.

Stocks of the day

The AI trade detonates

Illustration: Morning Brew Inc., Photos: Adobe Stock

Where there’s boom, there may be bust. A mass AI selloff today hit markets hard, sending tech stocks in their worst decline since April 2025 and the semiconductor index plunging by double digits.

One raison d’être? Midterm election results have investors recalculating much of the AI trade. With Republican-Democrat gridlock on the horizon, investors now expect fewer green lights for the data center buildout—and are pulling out of chipmakers and AI suppliers, pronto.

“This is a true panic,” Infrastructure Capital Advisors CEO Jay Hatfield told the Wall Street Journal. “This is 100% about the chip stocks and the potential slowdown in the AI trade.”

A Nasdaq blowup

The tech-heavy Nasdaq plummeted more than 5%, down more than 10% from its record close just a month ago on October 6 and in correction territory. And the rout spread throughout the markets, with Wall Street’s volatility spiking: The CBOE Volatility Index (or VIX) jumped more than 60%.

All said: Prepare for tumult. Two classic safe-haven assets, gold and Treasury bonds, are making gains. Plus, analysts who focus on volatility suggest planning for more ahead. Kai Wealth founder Cem Karsan points to complex derivatives—like those tied to the VIX, or credit-default swaps in the bond market—that can provide returns when volatility surges.—GR

Earnings

Morning Brew Inc, Photo: Edward Bethelot/Getty Images

Spotted on the Upper East Side: You may not have Birkin money, but you can still have Birkin aspirations. Apparently, a $300 Coach bag is doing a pretty good job of scratching that designer itch.

While some of luxury’s biggest names are struggling to keep shoppers interested, Coach and Ralph Lauren are having a moment. Both brands helped their companies raise annual forecasts yesterday, suggesting consumers still like nice things—they’re just choosier about which ones deserve their money.

Coach’s sales jumped 16% last quarter, according to parent company Tapestry’s earnings report, while Ralph Lauren’s revenue climbed 9%. Meanwhile, LVMH’s fashion and leather goods division, home to ultra-luxury houses like Louis Vuitton and Dior, recently reported a 5% decline in organic sales, while at Kering, Gucci’s comparable revenue slipped 6%.

Perhaps the designer hierarchy is getting a makeover—one where spending on the level of a VVVIP has a little less appeal.

The return of the It bag

One decided difference between luxury fashion’s winners and losers: their cost of entry. While lines like Louis Vuitton, Gucci, Saint Laurent, and more focus exclusively on the highest of high-end goods, down the market, Coach and Ralph Lauren start at significantly lower price points.

But fashion’s victors may have something else in common besides good earnings: They know how to make yesterday’s trends feel like tomorrow’s must-haves. Coach has embraced nostalgic handbags, including its archival-inspired Tabby, while Ralph Lauren’s polo shirts, cable-knit sweaters, and preppy aesthetic fit neatly into fashion’s renewed obsession—thanks in part to Love Story—with so-called quiet luxury, old-money style.

That appeal is reaching younger wallets. Coach attracted 2.1 million new customers last quarter, with Gen Z accounting for 35% of them. Ralph Lauren also cited growing engagement with younger consumers alongside strong demand in North America and China.

Money can’t buy taste

For years, luxury houses made exclusivity part of the price tag. But even the Birkin VIP club isn’t quite as untouchable as it once was. According to Reuters, a coveted Birkin 25 now fetches 1.7 times its retail price on the resale market, down from 2.6 times at its 2022 peak. While that doesn’t mean shoppers are trading their Birkins for Coach bags, it does suggest that scarcity alone isn’t the flex it used to be.

The real heel turn? Coach and Ralph Lauren aren’t winning by going cheaper. Coach’s average handbag selling price rose by a low double-digit percentage last quarter, while Ralph Lauren’s average retail price climbed 9%. Both also improved their profit margins.

In an economy where shoppers have vastly different budgets, the luxury industry’s next winners may be determined less by who can charge the most and more by who can make customers feel a splurge is worth it.

For investors, Coach’s comeback shows that even ultra-high-end brands can’t count on their reputations forever. Winning the next generation of shoppers could matter more than preserving yesterday’s pecking order. And Wall Street knows popularity pays.—HC

      

Sponsored By State Street Investment Management

Golden exposure. SPDR^® Gold MiniShares^® (GLDM^®) offers exposure to gold bullion’s resilience for just 10 bps. When investing in gold for years, not weeks, every basis point counts. Lower fees can help preserve returns, while a lower share price can make it easier to build a position gradually. Invest in gold today.

News

• Rather than accept Nelson Peltz’s $1.4 billion takeover bid, Wendy’s is pursuing a “poison pill” strategy to save its brand.
• One major wipeout amid today’s tech stock rout? Call it the Musk selloff.
• TikTok quietly launched a new shopping app in four Asian markets, giving us all another reason to watch our carts.
• After getting roasted by gamers on X, Sam Altman changed his tune—and his username—to this self-own.
• Crypto may have spent big on midterms, but the results could send its legislative wishlist to the shredder.
• LIV Golf is heading for liquidation after burning through billions in Saudi funding, with one last-ditch failed rescue sealing its fate.
• An insurer is suing an autism therapy provider over $160 million in allegedly misleading claims, including some mathematically impossible sessions.
• Rogaine sales have surged 30% this year, with parent company Kimberly-Clark suspecting an unexpected side effect of the weight loss boom.

Calendar

All eyes will be on the official jobs report, which will reveal hiring strength and wage pressures for the economy. We’ll also get the preliminary University of Michigan consumer survey. As for earnings, we’ll hear from Moderna and Humana on healthcare and from Enbridge, Vistra, and Oklo on energy.

recs

⚡ So the chips are falling. That means these five stocks can be snagged at big, big bargains.

🌼 Here’s the biggest loser of today’s AI selloff.

🚀 Got $10k to spare? Market rout aside, see what investing $10,000 in Nvidia and SpaceX today could be worth by 2030.

💸 Buy, borrow, die: Billionaires’ favorite investing strategy has now become a $5 trillion market you can get in on, too.

📊 This chart ranks the world’s richest countries by 2031—and the US doesn’t crack the top 10.

^{*A message from our sponsor.}

This time last week...

💰 Readers’ most-clicked story was about how a major fast-food franchisee could close dozens of restaurants in bankruptcy, leaving us with fewer burgers to go around.