AI's Lenders Led, Its Stocks Followed | Cargoes Cost $20 More Than Futures | $88,000 in Bets Against a Hike | Strategy Courted Its Preferred Holders

AI's credit markets set the tone, and an insurer's beat got bought.

The S&P 500 fell about 1.1% and the Nasdaq Composite about 2.1%. The Dow was off about 0.3%.

CoreWeave's bonds are headed for a fifth weekly drop. Bonds it sold in June now yield about 15%, Reuters reported.

Insuring its debt cost a record this week, Bloomberg reported. The company issued no news Friday.

CoreWeave (CRWV) fell about 12% to near $61, and Nebius (NBIS) about 12%. The PHLX Semiconductor Index fell about 3.8%, its eighth straight decline.

Travelers beat profit forecasts by about a quarter. Travelers (TRV) earned $9.18 a share in core income, against an average estimate of $7.39.

Catastrophe losses rose 34%, and the shares fell about 4% before the open. They closed up about 1.4%.

Lenders First, Then Shares

CoreWeave's bonds had been falling for weeks before its stock caught up. Travelers' underwriting won out over its storm bill.

Futures chased physical crude, and power plants carried the factory data.

Physical North Sea crude costs about $20 more than Brent futures. Platts put Dated Brent near $126 a barrel Thursday. Futures ended near $106.

Brent futures fell early Friday, then rose more than 3% to near $109.50 late in the day. No single announcement explains the reversal, and the November U.S. crude contract expires next week.

The IEA's plan to speed up its stock release covers about 100 million barrels already pledged. Its "over 20 million barrels of diesel" is part of that total, not an addition.

Industrial output beat forecasts. Power plants did much of the work. Output rose 0.7% in September, against 0.4% expected.

Utility output jumped 3.5% and grew at a 14.8% annual rate in the third quarter. Factory output rose 0.3%, and motor-vehicle production fell 3%.

Cargoes Lead, Paper Follows

Prompt barrels still cost far more than oil for later delivery. Power plants did much of the work in September's output gain.

Import prices ran hot, and the biggest Kalshi traders bet the Fed waits anyway.

A strong dollar should have made imports cheaper. Excluding fuel, they cost 6% more than a year ago. Import prices rose 1.1% in September, against 0.8% in a Reuters poll.

They were up 8.1% from a year earlier, the most since July 2022. Nonfuel import prices rose 6.0%, the most since April 2022. The index excludes tariffs.

Two Kalshi trades committed about $88,000 against an October Fed hike. Each bought 50,000 "no" contracts on a quarter-point increase, at 10:38 a.m. and at noon.

Buyers of the hike side answered both. The contract was at 13 cents at 1:46 p.m., where it stood before the data, Kalshi data show.

The Fed's quiet period begins Saturday.

Hot Data, Flat Odds

Nonfuel import prices rose at their fastest pace in more than four years. By early afternoon, the October hike contract was back where it started.

A bank paid to reset its bond book, and a buyout owner made its company bigger.

Truist's $1.4 billion bond loss could take about eight years to earn back. Truist (TFC) sold $8.6 billion of mortgage bonds yielding 2.67% and bought $7.2 billion yielding about 5.6%.

Regions (RF) repositioned $850 million of bonds for a $15 million loss. It expects a payback in about two years.

Truist earned $1.16 a share on an adjusted basis, against a $1.14 average estimate. Its shares rose about 1.1%.

Thoma Bravo isn't selling Proofpoint. It is using it to spend $6.3 billion. Proofpoint agreed Thursday to buy Varonis (VRNS) for $49.75 a share in cash.

Thoma Bravo committed the equity, lenders committed the debt and Ontario Teachers' will invest. The price is about 53 times Varonis's trailing free cash flow. Closing is targeted for the first half of 2027.

Paying to Wait

Truist took a loss now for income over years. Thoma Bravo chose a bigger company over an exit.

Strategy's index risk hit the stock, and Circle showed how thin a stablecoin margin runs.

Bitcoin traded near $81,500 at 4 p.m., down less than 1% in 24 hours. Ether was near $2,410.

Bitcoin slipped 1%. Strategy fell 9%. Its preferred holders are being offered daily dividends. Strategy (MSTR) was down about 10% late in its first full session since MSCI's decision.

Reuters reported that Strategy and Metaplanet are on MSCI's potential-deletion list. MSCI publishes the final list Nov. 11.

Strategy's 8-K set daily November dividends on its STRC preferred at 12% a year. That depends on an Oct. 28 shareholder vote. Miners and brokers also fell sharply, so the MSCI share of the drop can't be separated.

Circle says it keeps 7 cents of every revenue dollar. It said about $819 million went to USDC distribution partners and transaction costs in the first half.

That was about 59 cents of each revenue dollar. Circle (CRCL) fell about 5% in the sector selloff.

Riot Platforms fell about 11% and IREN (IREN), a miner that hosts AI computing, about 11%. Coinbase (COIN) lost about 6%.

Index Risk, Thin Margins

Strategy fell about 10% while bitcoin slipped less than 1%, and it turned to its preferred holders. Circle's partners take most of what USDC earns.

Friday's selling followed the borrowers, from AI clouds to bitcoin miners.

CoreWeave's bonds headed for a fifth weekly drop, and its shares caught up. Miners traded with AI stocks while bitcoin slipped less than 1%.

Cargoes cost about $20 more than Brent futures. Import prices ran hot, and the October hike contract was at 13 cents in early afternoon.