The AI Selloff Hit Credit | Producer Prices Jumped 1.3% | TSMC Plans Carefully for 2027 | Europe Names USDC Significant

Record chip profit met record default insurance.

Nasdaq 100 futures were down more than 1.3% pre-market, S&P 500 futures about 0.3%.

The AI selloff moved from stocks into credit. Five-year default swaps on Oracle (ORCL) debt stood at a record 288 basis points, per S&P Global.

CoreWeave's bonds due 2032 traded around 77 cents on the dollar Wednesday. CoreWeave (CRWV) fell 15.5% Wednesday and was down about 4.5% ahead of the open.

South Korea's Kospi fell 7.6% after tripping a circuit breaker for the first time since July 29.

TSMC beat its own forecast and expects another jump in fourth-quarter sales. Taiwan Semiconductor (TSM) reported third-quarter revenue of $46.72 billion, above its guidance.

Net income rose 69% to a record NT$763.1 billion. TSMC guided fourth-quarter revenue to $52.3 billion to $54.3 billion. It called AI demand "extremely robust."

"We are being prudent in our business planning going into 2027," Chief Executive C.C. Wei said, according to accounts of the earnings call. Its U.S.-listed shares were down about 3.5% pre-market.

The Worry Moved to Funding

From TSMC's side, AI demand still looks robust. Insuring Oracle's debt costs a record, and CoreWeave's bonds trade well below face value. The question now is who pays for the buildout.

Washington weighed letting more tankers sail, and diesel kept pushing costs through the economy.

Brent fell faster than U.S. crude overnight. Brent traded near $104.70 ahead of the US open, down about 1.3% from Wednesday's settlement. U.S. crude was slightly higher near $96.

A U.S. official told Reuters that Washington is considering easing sanctions on some shadow-fleet tankers. The goal is to cut record freight rates and move more oil out of the Gulf, the official said.

U.N. maritime agency data show the Cape Dao, a bulk carrier hit in September, has sunk.

Diesel is the channel carrying the oil shock into the wider economy. Household fuel oil prices rose 15.3% in September, the Labor Department said.

The Fed's Beige Book says fuel surcharges are passing costs along supply chains. Firms in several districts expect more increases as contracts and hedges reset.

A Ukrainian drone attack set fire to Russia's Ryazan refinery, the regional governor said Thursday. The plant handles almost 5% of Russia's refining.

More Ships, Same Squeeze

Brent slid while Washington talked about more tankers and a damaged ship went down. Diesel costs are still moving through surcharges and contracts. A burning Russian refinery adds to the strain on fuel supply.

Both Thursday reports came in above forecasts, and bonds held their overnight gains.

Producer prices jumped 1.3% in September. It was the biggest rise since March 2022.

Economists had expected 0.5% to 0.6%. Energy prices rose 10.8%.

Retail sales rose 0.8%, above the 0.3% forecast. Higher gasoline prices boosted the total.

Core sales, which feed into GDP, rose just 0.1%, short of the 0.3% expected.

Prices rose faster in September. Long-term Treasury yields fell anyway. The 10-year yield touched about 5.33% after Wednesday's consumer price report. It closed at 5.19%, two basis points lower.

It traded near 5.05%, a three-week low, after Thursday's reports.

The October hike bet has given back 86% of Wednesday's jump. Kalshi's contract on an Oct. 28 hike traded at 23 to 24 cents around 6 a.m., before the reports. It had peaked at 55 cents Wednesday.

Hot Prices, Soft Core Spending

Producer prices rose more than twice as fast as forecast, a day after a hot consumer report. Retail spending outside gasoline was soft. Long-term yields still sat near three-week lows.

Abu Dhabi-backed money paid cash for a buyout, and venture investors paid up for AI computing.

Clear Channel went private on $3.3 billion of Mubadala equity. The billboard company's $6.2 billion take-private closed Wednesday.

Its filing lists about $3.3 billion of equity from Mubadala-affiliated funds. The rest came from $100 million of new term loans and company cash. It does not list the Apollo preferred equity or the JPMorgan-led debt committed in February.

About $1.3 billion went to shareholders. About $1.87 billion went to redeem notes due 2028 and 2029.

Modal's valuation more than tripled in five months. The AI cloud startup said Wednesday it raised $750 million, led by Accel. The round valued it at $15.75 billion, including the new money.

In May it was valued at $4.65 billion. Modal said it has crossed $1 billion in annualized run rate. That figure is company-defined, not audited revenue.

Equity Carried Both Deals

Mubadala's funds supplied most of the money to pay out shareholders and retire two bond issues. Modal's investors valued it at more than three times May's mark, measured against a company-defined number.

Both big coins lost fund money, and Europe put USDC under its banking regulator.

Bitcoin traded near $80,300 at 9:20 a.m., down about 2.5% over 24 hours. Ether was near $2,340, down about 5%.

Fed hike fears faded overnight. Bitcoin fell anyway. It slipped below $81,000 late Wednesday as Asian chip stocks slid, but held above $80,000.

U.S. spot bitcoin funds had $261.4 million of net outflows Wednesday, Farside data show. Ether funds lost $129.5 million, led by $109.8 million at BlackRock's fund.

CoinGlass counted about $950 million of crypto liquidations in the 24 hours to early Thursday. Ether's $286 million topped bitcoin's $197 million, though ether's futures market is smaller.

Europe names USDC its first 'significant' stablecoin. Europe's banking regulator takes over supervision of its reserves and capital on Nov. 12.

USDC is the first of 45 e-money tokens in the EU to get the label. France's prudential regulator keeps oversight of governance. Circle (CRCL) fell 5.6% Wednesday.

Two Coins, Two Supervisors

Fund holders pulled money from both coins, and ether's leverage cost it more. Bitcoin moved with Asian chip stocks overnight. USDC will answer to two supervisors from November.

Thursday morning moved the AI question from demand to funding.

TSMC beat its own forecast. Oracle's default insurance sits at a record, and bitcoin traded with Asian chip stocks overnight.

Producer prices ran above forecasts, and gasoline lifted retail sales. Long-term yields stayed near three-week lows.