The artificial-intelligence investment boom that has underpinned equity markets for much of the year showed fresh signs of strain on Thursday, as a pair of high-profile earnings disappointments sent technology shares lower and erased a record sum from one of the sector’s largest constituents. The Nasdaq 100 Index declined about 1.5 percent, reversing a stretch of gains and reviving demand for haven assets even as a separate report confirmed that the U.S. economy had expanded at its fastest pace in a year. Losses in the technology complex, led by a historic plunge in Alphabet Inc. shares, also coincided with a drop in oil prices and a modest rally in bonds, just a day after the Federal Reserve held its policy rate steady. Investors appeared to be sorting companies according to the rationality and immediate returns of their AI outlays, a process that produced clear winners and losers within a single trading session.
Alphabet’s parent company reported sales excluding partner payouts of $111.2 billion for the third quarter, falling short of analysts’ projections. Advertising revenue from search and other channels, which still accounts for roughly half of overall sales and remains critical to financing the firm’s massive infrastructure commitments, grew at the slowest pace in five quarters and also missed forecasts. The shares fell more than 13 percent to $281.37, wiping more than $500 billion from market value by mid-morning in New York and marking the largest single-day erasure on record for the company. Chief Business Officer Philipp Schindler attributed part of the shortfall to the growing popularity of AI Mode, a new tab in Google Search whose queries carry lower monetization. For years executives had argued that chatbots and AI features would not significantly cannibalize the core search franchise, yet the results reinforced investor fears that consumers are turning to rival tools such as ChatGPT and Claude, as well as Google’s own AI responses.
The pressure is mounting on Chief Executive Officer Sundar Pichai to justify more than $1 trillion in future payments for data centers, computing power and energy. Future commitments to buy such resources already totaled $924 billion by the end of the quarter, with additional data-center leases that have not yet commenced adding another $152 billion. The firm posted negative free cash flow for the second consecutive quarter, a development it had not seen since going public. Overall services revenue came in at $96.3 billion against estimates of $98.4 billion, and YouTube advertising sales of $11.2 billion likewise trailed projections. Equity investments produced an $8.7 billion loss, largely from the SpaceX stake, reversing earlier gains. Net income of $2.12 a share fell well below the $2.99 consensus. One relative bright spot was Google Cloud, where sales of $30.7 billion and profit of $11.1 billion both exceeded forecasts; among the unit’s largest customers are AI startups such as Anthropic that compete with Google itself. Hours before the earnings call the company unveiled another new model, Carbon, and Pichai told analysts that more efficient versions are coming soon.
ServiceNow Inc. suffered its own record intraday decline after providing an outlook for quarterly subscription sales that merely met expectations and failed to ease worries that artificial intelligence will disrupt its software franchise. Subscription revenue is projected to grow as much as 23 percent in the coming period, roughly in line with estimates, while current remaining performance obligations are expected to expand more than 18 percent through December, just shy of the 19 percent average projection. Shares plunged as much as 25 percent to $112.37, their steepest drop since the 2012 initial public offering. The stock had gained 36 percent in the three months preceding the report, raising the bar. Annual contract value for AI products is now expected to reach $1.7 billion by year-end, up from a $1.5 billion target issued three months earlier. Customers are rapidly increasing use of agentic AI, with consumption thirteen times higher than a year ago, according to Chief Financial Officer Gina Mastantuono. Actual subscription revenue rose 21 percent to $3.99 billion in the September quarter, just above the $3.98 billion estimate, and accounts for 97 percent of total sales. Adjusted profit of $1 a share compared with an estimate of $1.03.
Microsoft Corp., by contrast, reported robust fiscal first-quarter results on Wednesday, including a 48 percent gain in cloud revenue while keeping capital expenditures in check. Chief Financial Officer Amy Hood indicated the company would raise additional funds when it judged the timing attractive. On Thursday the firm moved to do so, marketing at least $25 billion in its first U.S. investment-grade bond offering in nearly a decade. The debt is being offered in as many as ten tranches with maturities from two to forty years; final size remains subject to demand. Wells Fargo, JPMorgan Chase and UBS are managing the sale, with proceeds earmarked for general corporate purposes including capital expenditures. Microsoft carries rare AAA ratings from both Moody’s and S&P, a distinction shared among publicly traded U.S. firms only with Johnson & Johnson, and it last sold high-grade debt in 2017 when it raised $17 billion. Initial price talk on a note due in 2066 is a premium of as much as 1.35 percentage points above Treasuries, roughly in line with where lower-rated Alphabet and Amazon forty-year bonds trade. Portfolio managers noted that the combination of scarce long-dated AAA paper potentially yielding more than 6 percent should attract buyers seeking diversification even amid heavy overall supply.
Hyperscalers and data-center developers have already raised more than $313 billion through investment-grade bond sales globally this year, almost three times the full-year 2025 total, helping push worldwide bond issuance to a record $6.61 trillion with two months remaining. The deluge has produced caution in credit-default-swap markets. Five-year CDS on Meta Platforms debt, rated AA, stood near 116 basis points, 62 points wider than Microsoft’s roughly 54 basis points. Swaps on Oracle, the weakest-rated among the largest hyperscalers and often viewed as a proxy for AI-debt risk, traded near 275 basis points, about 221 points wider than Microsoft. The Microsoft offering arrives as the first from a blue-chip hyperscaler since Alphabet priced $25 billion of debt on August 6 and will test appetite for financing AI investments at a moment when concerns about excessive spending and delayed profit payoffs are rising.
Those concerns have left investors with reduced exposure that could amplify any shift in sentiment. Discretionary investors have cut U.S. equity exposure to the lowest level in more than a month, while systematic strategies have also scaled back. Hedge funds have sold short roughly $5 of stock for every $1 purchased this month, and the use of borrowed money to bet against equities is near a five-year high. Technology shares specifically recorded their heaviest two weeks of net selling in more than a decade of Goldman Sachs records through October 16; Deutsche Bank notes that technology holdings have been reduced to a six-month low near levels seen during the Iran war. The Nasdaq 100 has fallen 4.5 percent since October 6 amid rising oil prices, inflation worries and questions about the sustainability of AI capital expenditure. A successful initial public offering by Anthropic could reverse the mood, offering a pure-play AI name until OpenAI comes public and potentially forcing short covering. Retail option buying that favored upside bets from late August through early October has slowed but remains above average, leaving room for individual investors to re-engage. Long-only funds, however, already hold less than 1 percent of assets in cash after pouring about $340 billion into U.S. stock funds this year, more than three times the typical amount by this stage.
Amazon.com and Intel Corp. are scheduled to report after the closing bell, providing the next near-term tests of whether AI-related spending is delivering returns.
U.S. Growth Accelerates on Investment and Spending While Inflation Firms
Separate from the technology-specific turbulence, the broader U.S. economy expanded at its fastest pace in a year during the third quarter, powered by business investment tied in large part to artificial intelligence and by continued consumer resilience. Inflation-adjusted gross domestic product rose at a 3.4 percent annualized rate in the three months through September, up from 2.2 percent in the second quarter and above the median forecast in a Bloomberg survey. The report, the final major economic reading before next week’s midterm elections, underscored an expansion still energized by capital outlays even as rising prices erode real paychecks and keep consumer sentiment depressed.
Business investment climbed at a 12.7 percent annualized rate, the strongest since 2020. Outlays on information-processing equipment and software remained robust, yet contributions from other investment categories over the past two quarters were the strongest in three years after a period of weakness in 2025 and early 2026. Equipment spending contributed more to growth than at any time since 2011 outside the pandemic rebound. Household consumption increased at a 3.8 percent annualized pace for a second consecutive quarter. Net exports subtracted 3.3 percentage points, the largest drag since early last year, reflecting a surge in imports—especially equipment destined for data centers—along with efforts to bring goods into the country ahead of tariffs and amid supply-chain disruptions. Residential investment continued to subtract from growth as mortgage rates that recently touched 7.5 percent restrained homebuying and construction. Inventories added 1.6 percentage points.
Inflationary pressures also mounted. The personal-consumption-expenditures price index, the Federal Reserve’s preferred gauge, rose 0.5 percent in September, the largest increase in six months. The core measure excluding food and energy advanced 0.3 percent. Both readings matched expectations. The year-over-year PCE rate stood at 3.6 percent, well above the central bank’s 2 percent target. Real personal spending stalled in September after an outsized gain the prior month, held back by a pullback in autos and other durables. Real disposable income fell for the first time since April, and the saving rate dropped to 3.8 percent, the lowest since the end of 2022. Separate data showed initial jobless claims edged lower and remained near the lowest levels since 1969.
Companies from banks to restaurants have described consumer spending as resilient on recent earnings calls, with United Parcel Service Chief Executive Carol Tomé noting that stable employment and asset ownership continue to support outlays, though those without assets are stretched. Coca-Cola observed that households across the income spectrum continue to prioritize value even as overall behavior is expected to remain largely unchanged. Looking ahead, the Middle East conflict and the Russia-Ukraine war are keeping energy costs elevated, raising the risk that higher fuel prices will filter further into other goods and services. The Trump administration’s tariffs are also raising the cost of some items. With the Fed’s preferred inflation measure still elevated, investors expect policymakers to raise rates at their December meeting. On Wednesday the central bank left borrowing costs unchanged. Chairman Kevin Warsh emphasized the economy’s strength while reiterating the commitment to containing inflation, noting that domestic spending has been resilient, productivity growth is strong and capital investment robust despite geopolitical uncertainty.
The combination of solid growth and firming prices has left fixed-income markets sensitive. Bank of America’s macro traders are running relatively small risk heading into year-end after a volatile period that included swings in European rates, a deep Brazilian sell-off and oil climbing above $110 a barrel. Benchmark U.S. yields earlier this month touched the highest levels since 2002. Fixed-income, currencies and commodities trading revenue at the bank fell 17 percent year-on-year in the third quarter, driven primarily by declines in mortgages, municipals and credit. Traders are watching credit spreads closely as a potential last shoe to drop amid concerns over AI-related debt. At the same time, Treasuries have begun to act as a haven again, rallying when equities fall or when European political concerns intensify, a dynamic attributed in part to Warsh’s reinforcement of the inflation-fighting mandate and potentially signaling a return to the older pattern in which weak economic news supports markets.
Midterm Politics Intersect With Data-Center Growth and Fundraising
Political dynamics ahead of the November 3 midterm elections are intersecting with the same infrastructure build-out that is driving both technology spending and economic growth. In Texas, Governor Greg Abbott has pivoted from data-center champion to skeptic, directing the state’s environmental regulator to withhold further permits until the grid operator completes an audit of applicants. Developers are beginning to look elsewhere, with Utah, Georgia and Iowa mentioned as alternatives, threatening the pace of development in a state that had been on track to surpass Virginia as the world’s data-center capital. Even the largest players are affected: banks are delaying the sale of bonds tied to a Texas facility that will be leased to Anthropic, whose models depend on expanding compute capacity that the new regulations are said to inhibit.
Abbott once described Texas as the epicenter of AI development; he is now erecting obstacles. The shift appears responsive to bipartisan local opposition rooted in concerns over water and energy use and over the prospect that the facilities will power technology that displaces jobs. A University of Texas/Texas Politics Project poll found that 57 percent of Texans oppose construction of a data center in their community. Democratic nominee Gina Hinojosa has called for a moratorium and trails Abbott by only a few points, giving her a realistic chance at the governorship for the first time since 1990. Some developers and analysts view the pause as an election-year maneuver that may ease after the vote. DataBank Chief Executive Raul Martynek, whose firm has already built nearly 350 megawatts in the state, expects Texas to remain a top destination but believes the scrutiny will shake out more speculative projects. Implementing the audit also postponed an Electric Reliability Council of Texas report on high-capacity industrial demand that would otherwise have appeared just before the election.
Land developer Tract has complained that additional studies for a proposed 500-megawatt facility near San Antonio could kill the project, while Rowan Digital Infrastructure has challenged the review of its $4.2 billion campus north of Austin, citing material risk to further financing. Jack Painter of Capstone noted that Texas remains one of the most attractive markets even if some share of the current queue shifts to Arizona, Utah or Georgia. An Abbott spokesperson stated that data centers must pay their own way, protect the grid and water, and complete state audits, or permits will be denied.
Nationally, Republicans are relying on a substantial fundraising advantage to defend Senate control amid low presidential approval ratings, Democratic leads in some red-state races and elevated fuel prices that amplify affordability concerns. The party and three super PACs tied to Trump or congressional leaders have raised $2.1 billion, compared with $1.4 billion for Democratic counterparts; allied groups such as Elon Musk’s America PAC have brought in hundreds of millions more. In Senate contests rated competitive or potentially competitive by the Cook Political Report, Republicans have outspent Democrats by roughly $237 million, powered by outside groups including Richard Uihlein’s Restoration of America PAC and Americans for Prosperity Action. Super-PAC flexibility allows rapid redeployment as the map shifts, unlike money given to specific campaigns.
In Texas, Democrat James Talarico has raised $146 million—more than six times Ken Paxton’s total—and has led in polls since late July in a state where Democrats have not won statewide since 1994. Musk’s groups have contributed $158 million to the Republican effort. Candidate advertising rates are substantially lower than those available to super PACs; Talarico’s campaign paid roughly $800 on average for spots on The View in San Antonio while a Musk-funded PAC paid about $5,000. By the end of the cycle the race is likely to rank among the most expensive Senate contests ever. In North Carolina, the main Republican Senate super PAC initially pledged $71 million for Michael Whatley against Roy Cooper but later pulled funds after spending about half that amount as Cooper maintained a double-digit lead; Democratic groups have likewise reallocated. Michael R. Bloomberg, founder and majority owner of Bloomberg LP, contributed about $80 million in September and October to Democratic efforts. Overall midterm spending is expected to be eclipsed by the 2028 presidential contest, the first in more than a decade without Trump on the ballot.
Florida, long regarded as a Republican stronghold, has re-emerged as a battleground. Former President Bill Clinton, Bernie Sanders, Alexandria Ocasio-Cortez and Pete Buttigieg have campaigned for candidates in tight races despite heavy Republican spending. GOP candidates have spent $184 million on advertising by late October, double the Democratic total. Byron Donalds has amassed a roughly $172 million war chest for the gubernatorial race against David Jolly, a former Republican congressman who is polling within two points; Ken Griffin, Steve Wynn and Stephen Ross are among the donors. Angie Nixon, the Democratic Senate candidate, trails Ashley Moody by four to seven points but has drawn large crowds at Sanders rallies in areas Trump carried in 2024. House races have also tightened after mid-decade redistricting; Kathy Castor’s contest shifted from Lean Republican to toss-up as strawberry farmers in her newly drawn district cite high diesel and fertilizer costs. There are 1.5 million more registered Republicans than Democrats in the state, yet 3.3 million independents favor the two leading Democratic candidates by about 15 points each in the most recent University of North Florida poll. Trump is scheduled to rally in Daytona Beach on Friday after an appearance in Fort Myers last week in which he urged supporters to pretend he is on the ballot.
European Policy Uncertainty and Energy Pressures
Across the Atlantic, the European Central Bank left its deposit rate unchanged at 2.5 percent, as nearly all economists had expected, while news that President Christine Lagarde will step down in February—months before her term ends—added to concern over energy costs and political tensions in France. Lagarde said she is leaving to have greater freedom to speak on issues including turmoil in her homeland. The decision was overshadowed by the succession race between the former central-bank chiefs of Spain and the Netherlands. The ECB noted that the increased magnitude and duration of the energy shock, along with implications for indirect and second-round effects, are likely to drive inflation higher and growth lower. Financing conditions have tightened since the last meeting, which is expected to weigh on both inflation and growth. Underlying inflation has remained broadly stable and wages have not shown a material response, yet the bank again declined to pre-commit to future steps.
Traders slightly pared bets on further tightening, pricing 70 basis points of rate increases by the end of 2027 versus 72 basis points beforehand. The euro extended losses to a fresh seventeen-month low of $1.1111. Policymakers are widely expected to raise rates again in December when updated projections will clarify the severity of inflation pressure. Oil has risen more than 6 percent since the ECB last set rates, and natural gas has reached its highest level in almost four years. Consumer prices rose 3.8 percent in September, with gauges of inflation expectations also creeping higher. Third-quarter growth is estimated at 0.2 percent, and rate increases contributed to a fall in loan demand. The ECB joins the Federal Reserve in holding steady this week; the Bank of Japan is expected to do the same on Friday. Risks to the outlook are described as skewed to the downside for growth and to the upside for inflation.
Latin American Equity Retreat and Regional Security Challenges
The same political and commodity sensitivities that have whipsawed markets elsewhere are visible in Latin America, where a two-decade decline in dedicated equity funds has left the asset class sparsely populated. From a peak of more than 660 Latin America-focused funds in 2015, the number has fallen to 226 after mergers, sales and closures. Scott Piper, who runs about $5 billion of equities for Itaú Unibanco’s asset-management unit, observes that the field has become lonely. GDP growth has averaged less than 2 percent a year since the commodities boom faded roughly fifteen years ago, productivity has declined and innovation has dried up, bringing the IPO pipeline nearly to a halt. The MSCI Latin America index remains down 40 percent from its peak and was further damaged by this week’s collapse in Brazilian stocks after the surprise re-election of Luiz Inácio Lula da Silva. Some stocks fell more than 60 percent, triggering a circuit breaker for the first time since the pandemic. Over the past five years only two IPOs that raised more than half a billion dollars have occurred on the Mexican and Brazilian exchanges combined, compared with twenty-six such deals in the United States this year alone through Tuesday.
Will Landers, who once oversaw more than $10 billion in Latin American equities at BlackRock, now views the region as more suitable for hedge-fund trading than for structural allocation. A fund he managed has lost more than 90 percent of its peak assets, and he has left the industry. Ownership remains highly concentrated: in Colombia, Mexico and Brazil the three largest shareholders control more than half the shares in 60 percent of listed companies; in Peru and Argentina the figure exceeds 80 percent. Delistings have outpaced new listings in Brazil and Mexico, and the number of listed Brazilian companies has shrunk 15 percent since late 2023. When fast-growing companies do emerge they often list in the United States to access deeper capital, as with Nubank. Even counting those U.S. listings, only four IPOs raising at least half a billion dollars have occurred in the past five years. Private-equity exits have become scarcer, though the environment has allowed some firms to acquire assets cheaply and take them private, as with Arco Platform and Kora Saúde. Assets in Latin American equity funds based outside the region fell to $19 billion last year from more than $60 billion in 2010. Passive European funds have begun to trickle money back in, but the Brazil shock illustrated the fragility of those flows. Southern Copper stands out as one of the few pure AI-linked names, its market value more than tripling over five years to above $160 billion on the back of copper demand, yet broader gains tied to right-leaning governments have already begun to fade as spending cuts erode popularity.
In the Caribbean, El Salvador has deployed more than 2,000 troops to Haiti—its largest foreign deployment in decades—to locate and rescue four soldiers believed to be hostages of powerful gangs. The troops were part of a UN-backed Gang Suppression Force; the four were presumed kidnapped on October 18. Presidents of both countries held a call affirming continued support for anti-gang efforts beyond the immediate rescue. Flight tracking showed at least three flights from San Salvador landing on Wednesday. Intense gunfights in crowded urban areas have produced civilian casualties; Doctors Without Borders received thirty patients, including women and children, injured by gunfire or drone explosions between October 18 and 26. A CID Gallup poll found that 82 percent of Salvadorans are worried about risks to personnel yet 86 percent support the rescue operation, and 94 percent approve of President Nayib Bukele’s performance. Haiti’s electoral council published a new calendar pushing the first round of the presidential vote to July 18, 2027; general elections have not been held in more than a decade following the 2021 assassination of President Jovenel Moïse.
Financial-Market Innovation Meets Regulatory and Credit Caution
Attempts to bring new trading instruments into regulated U.S. markets are advancing even as existing platforms face legal pushback. Intercontinental Exchange, parent of the New York Stock Exchange, has joined forces with Trade.xyz, one of the operators behind the offshore crypto platform Hyperliquid, to create a market for perpetual futures contracts. The new venue will have its own clearing, know-your-customer and anti-money-laundering systems, will be built on Hyperliquid’s rails and will use Trade.xyz products tied to equities, equity indexes, commodities and currencies, pending regulatory approval. ICE is taking a stake in Trade.xyz; billionaire Stan Druckenmiller has also invested. Hyperliquid has grown into one of the largest markets for perpetual futures—leveraged contracts without expiration dates that trade around the clock—and Trade.xyz has extended the model to traditional assets such as oil and stock indexes. Trading volumes in perps on traditional assets have surged this year, attracting market makers and hedge funds that previously had to access the instruments offshore.
ICE Chief Executive Jeff Sprecher said the products are additive to existing futures markets. The Commodity Futures Trading Commission, under Chairman Michael Selig, has laid out conditions under which regulated U.S. platforms may offer perps and has stated that on-chain finance is an important part of the next frontier and should thrive in a legal and compliant manner. Kalshi and Coinbase have already listed perps on U.S. venues; Kalshi received approval for gold and silver contracts last month. Payward, parent of Kraken, plans to offer U.S. clients perpetual futures using Hyperliquid’s blockchain subject to approval. HYPE, Hyperliquid’s native token, rose as much as 9.2 percent to $88 on the news while most other tokens weakened.
Prediction markets themselves remain under legal pressure. Utah filed criminal charges against Kalshi on Wednesday, alleging the company continued to offer online gambling to state residents after a federal judge ruled that Utah’s anti-gambling laws apply to trades on the platform. The complaint names co-founders Tarek Mansour and Luana Lopes Lara, the first time the executives have been targeted with criminal prosecution in the nationwide fight. The fourteen counts accuse each of involvement in the enterprise’s affairs through a pattern of unlawful activity. Utah Attorney General Derek Brown stated that a federal court has already ruled the state’s gambling laws apply and that Kalshi kept taking bets anyway. Kalshi called the action a crazy overreach and said it looks forward to stopping it in court as it did in Arizona. Arizona filed criminal charges earlier but did not name the co-founders. The CFTC views the platforms as derivative exchanges under its exclusive jurisdiction, while states argue they are illegal gambling operations. The legal fight is likely headed to the Supreme Court after federal appeals courts split; if the justices take the case, oral arguments could occur in early 2027 with a ruling by early summer.
Bank of America’s macro traders, already cautious after the Brazilian and European rate moves, are also monitoring credit spreads as a potential source of further volatility tied to AI-related borrowing.
Corporate Adaptation in a Higher-Cost Environment
Companies are adjusting strategies to the same affordability pressures and technological shifts visible in the broader economy. Thrive Holdings, an offshoot of Joshua Kushner’s Thrive Capital Management formed last year as a permanent-capital vehicle, has agreed to acquire home-security provider ADT Inc. for $10 a share in cash, or $7.6 billion, representing a nearly 46 percent premium to the October 27 close and an enterprise value of $15.3 billion. Financing is provided by funds managed by affiliates of Apollo Global Management. Thrive Holdings incubates, operates and invests in businesses that aim to bring artificial intelligence to traditionally analog service providers. ADT, founded more than 150 years ago, said the combination will help it develop new offerings. Chief Executive Jim DeVries stated that Thrive’s long-term capital and technology expertise will accelerate innovation and enhance the customer experience.
Microsoft is simultaneously offering a large voluntary buyout to roughly 60,000 employees—about a quarter of its workforce—as part of workforce transformation amid AI-driven changes. Eligible staff have until early December to decide; those who accept will receive benefits similar to the firm’s standard severance package. Earlier this year the company offered early-retirement packages to nearly 9,000 long-tenured workers, eliminated 4,800 roles outright and redeployed more than 4,000 employees. Chief People Officer Amy Coleman has indicated the firm will continue exploring similar approaches. More than four in ten U.S. companies have considered voluntary departure programs or retirement incentives as alternatives to involuntary layoffs, according to a survey of 600 business leaders by LHH. Nearly half of organizations that offer buyouts provide additional severance, enhanced health benefits or job-search help; more than a third allow immediate vesting of stock options. Microsoft expects very few people to take the offer, according to a memo from Hood. The process is complex because of significant equity-based compensation and the geographic spread of eligible employees across the United States, United Kingdom, Canada and India. Success will depend not only on implementation but on how remaining staff reorganize work in a leaner structure, particularly in divisions such as Xbox, Windows and Copilot that are affected while others such as cybersecurity and quantum computing are not. The company is pursuing the buyout from a position of strength after Wednesday’s earnings beat and with shares up 11 percent on the year.
In the consumer staples sector, Altria Group is capturing price-sensitive smokers with lower-priced cigarettes as lower-income Americans remain under financial pressure from higher living costs. U.S. cigarette deliveries fell 2.9 percent in the third quarter, a smaller decline than the 8 percent drop a year earlier and better than industry trends. The company introduced Marlboro Cowboy Cut earlier this year as a lower-priced option; the brand strengthened Marlboro’s position while the discount brand Basic continued to gain share. Revenue of $5.4 billion and adjusted earnings of $1.52 a share both beat estimates. Altria raised the top end of its full-year adjusted EPS forecast to $5.74 from $5.72. Shares rose about 2 percent in premarket trading and are up 27 percent year-to-date through Wednesday, outpacing the S&P 500’s 13 percent gain. There is no definitive evidence that smoking rates are rising; government data show about 9 percent of Americans smoke, down from 20 percent two decades ago. Nicotine-pouch shipments for the On! brand grew 13.3 percent despite intensifying competition. The company has expanded the On Plus line with blueberry and mango flavors and plans a watermelon-mint option with as much as 12 milligrams of nicotine. On held about 5 percent of the U.S. market over the past 52 weeks, versus 30 percent for Philip Morris’s Zyn.
Weather Risks Add to Seasonal Pressures
Finally, California is bracing for flooding as an atmospheric river delivers a glancing blow to the south of the state before moving across northern Mexico into the U.S. Southwest this weekend. Coastal flood warnings and advisories are in effect through Friday as northwest winds push tides nearly two feet above normal around San Diego and Los Angeles, amplified by the full moon and Kelvin waves associated with the strengthening El Niño. Flood watches cover central Arizona, including Phoenix, through Friday. Meteorologists at the Weather Prediction Center indicate the heaviest rainfall is expected farther east, particularly in Arizona on Sunday, with a 15 percent chance of excessive rainfall Saturday into Sunday. Southern California has a 5 percent chance of excessive rain over the same period; downtown Los Angeles faces its greatest chance Saturday night, and the county may receive 0.5 to 1.5 inches through the weekend. Parents are advised to have backup plans for Halloween trick-or-treat events. The strengthening El Niño typically brings heavy rain from California to Florida and raises risks of flooding, mudslides and property damage; chances remain high that the event will be historic, the strongest in records dating to 1950, with effects lingering for months. Flood watches are also up for nearly all of Hawaii’s populated islands amid heavy overnight rain into Thursday, with risks of flash flooding, road closures and landslides.
Looking ahead, investors will parse Amazon and Intel results after the close for further signals on AI returns, while the midterm elections on November 3 will clarify the political backdrop for both fiscal policy and data-center development. The ECB’s December meeting, updated European projections and the Bank of Japan’s decision on Friday will shape global rate expectations amid persistent energy shocks. Anthropic’s planned offering, if it materializes, and any further hyperscaler bond issuance will test the durability of credit appetite for AI infrastructure.
