Markets broke a record run on Wednesday as higher oil prices, a fresh jump in inflation expectations, and a renewed bid for safety pushed Treasury yields toward levels last seen more than two decades ago and lifted the dollar toward a new high for the year. The S&P 500 retreated from an all-time high and the Nasdaq 100 ended a six-day advance after Brent crude traded above $100 a barrel, later topping $102, amid a pickup in Iranian attacks on vessels in the Strait of Hormuz. Ten-year Treasury yields hovered near the highest since 2002 ahead of a $39 billion sale of the bonds and the release of minutes from the Federal Reserve’s September meeting. The dollar rose. Bitcoin fell.
The move crystallized a broader unease that has been building across fixed income. Investors are demanding greater compensation to hold global bonds as concerns about persistent inflation, government spending, and surging corporate borrowing to finance the artificial-intelligence buildout intensify. That sense of unease is being compounded by France’s fiscal woes, which are threatening to drag the European Central Bank into the kind of face-off with markets it has not seen since the euro area’s debt crisis more than a decade ago. Persistently high energy prices keep risks to inflation, policy rates, and benchmark bond yields skewed to the upside, Elias Haddad at Brown Brothers Harriman said. A Fed pause may not bring down long yields if term premiums remain elevated, Ulrike Hoffmann-Burchardi at UBS Chief Investment Office said. Fixing the curve’s long-term problem without fiscal tightening requires productivity-led growth and periods of low real borrowing costs, she added. She recommends staying invested in AI-driven productivity gainers, diversifying across equities and high-quality fixed income, with a preference for shorter- over longer-duration bonds.
Equity markets face a genuine rival in bonds for the first time in decades, Bank of America’s Savita Subramanian told Bloomberg Television. Elevated investor sentiment leaves stocks more exposed to disappointment than upside, she cautioned. With recent developments in the credit markets, another extremely strong earnings season will be essential, Matt Maley at Miller Tabak noted. Analysts expect a roughly 25 percent increase in third-quarter S&P 500 profits from a year earlier, according to data compiled by Bloomberg Intelligence.
The dollar’s advance was part of the same impulse. The Bloomberg Dollar Spot Index rose as much as 0.5 percent alongside oil after the pickup in Iranian attacks, approaching a new peak this year. Nearly all currencies in the Group of 10 weakened against the greenback, with the euro lagging all its major peers. The dollar is acting as a counter-cyclical, attracting safe-haven flows as other asset classes sell off, Kathleen Brooks, research director at XTB, wrote. Rising energy prices, France’s fiscal challenges, and fresh political risks in the region are putting pressure on the euro. The common currency fell to $1.12, down 0.6 percent on Wednesday. Earlier this week it touched the lowest level since May 2025. The dollar is looking like the best of the bunch in the current environment, Jane Foley, head of foreign-exchange strategy at Rabobank, said. Only the brave are going to want to load up on the euro at this moment, and the market is favoring short pound positions ahead of the October 28 UK budget, while in Japan it may be another couple of months before the Bank of Japan hikes rates, she said. Traders were turning their attention to the September Fed minutes, which could offer confirmation of further monetary tightening. Last month the central bank boosted interest rates for the first time in three years. Since then, several Fed officials have said more needs to be done to tame inflation.
Short-term inflation expectations reinforced the concern. Americans’ estimates for inflation one year ahead rose to a median 3.9 percent in September, up from 3.6 percent the prior month and the highest since May 2023, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations released Wednesday. Views three years ahead ticked up to a median 3.3 percent from 3.2 percent in August, while median estimates five years ahead stayed unchanged at 3 percent. Released less than a month away from the November mid-term elections, the survey is the latest highlighting Americans’ persistent pessimism around an economy that is still expanding. Separate data released in recent weeks showed consumer sentiment fell to a four-month low in September and the unemployment rate rose slightly but remained historically low. Fed officials lifted their benchmark rate by a quarter point in September, a decision some policymakers said buys time to assess the economy. Policymakers are scheduled to meet next on October 27-28 in Washington. Minutes of the September gathering could reveal that many policymakers were deeply worried about underlying price trends.
Labor-market sentiment improved even as price expectations rose. The proportion of respondents expecting the overall unemployment rate to rise in the next year fell to around 44 percent. Perceived chances of finding a new role in the next three months if they lost their current job increased to 46 percent. Expectations of losing jobs in the next year fell, with the outlook improving most for workers between 40 and 60 years old and with annual household incomes above $100,000. Chances of leaving a post voluntarily also rose, especially among workers without a bachelor’s degree and above 40. Fed officials have for some time described the labor market as being in a low-fire, low-hire balance. In September the unemployment rate rose to 4.2 percent as companies added fewer workers and out-of-work Americans spent six months on average looking for a job. Perceptions of household finances worsened for a second straight month. Around 42 percent of households said their situation is much or somewhat worse than a year ago, while around 18 percent said it had improved. More households expected their financial outcomes to worsen in the year ahead, and more consumers said it is harder to get credit than a year ago. Expected spending growth for the year ahead rose to the highest since May 2023, an increase that was broad-based across age and education groups. Consumers continue to expect spending growth to outpace income growth. Perceived chances of missing a debt payment over the next three months fell slightly to 12 percent.
The bond-market debate on Wall Street remained unresolved even as yields jumped. On Wednesday the 10-year Treasury yield rose as high as 5.36 percent and the 30-year rate shot over 5.7 percent, levels last seen in 2002. Strategists are divided over whether yields will tumble by year-end or keep pushing higher. The market is being driven by the energy-price shock of the Iran war, the Federal Reserve’s pivot toward raising rates, and the AI boom that is pouring fuel on the economy.
Mark Cabana, co-head of global rates strategy at Bank of America, said the bank officially forecasts the 10-year yield at 5 percent by the end of the year, in line with its economists’ prediction that the Fed will hike at its next two meetings in October and December, bringing the economy to an equilibrium. Cabana’s team has issued trade recommendations based on the assumption that yields could keep rising. We do not think you want to fade it yet, he said. Even though forecasts are lower, the balance of risks suggests higher rates are more likely than lower ones right now. Anshul Pradhan, head of US rates research at Barclays Capital, raised the forecast for the 10-year yield to 5.25 percent from 5 percent for the third quarter of 2027 and sees little reason for yields to come back down soon. As long as the US economy is resilient, there is no particular catalyst in sight for why yields should fall below 5 percent, he said. He wrote that the 30-year yield could hit 6 percent if the economy remains resilient. Markets are still discounting a long-run neutral rate of around 3.5 percent, and there is scope for productivity to surprise to the upside. If that happens, markets can reassess the long-run level higher, pushing 30-year yields to 6 percent, or at least the fair value of 30-years to 6 percent.
Michael Chang, interest-rate derivatives strategist at Citigroup Global Markets, said the firm feels pretty good about its 5 percent year-end forecast for the 10-year note. The 30-year yield hitting 5.3 percent by the end of 2026 is definitely very doable, he said. Right now we are in a mini-buyer strike, so it is very hard for rates to trade near where they are supposed to. The deviation can be extreme and stay there longer than normal. Over the medium term rates should trade closer to fair value, which is lower from here, and the forecast reflects that bullish bias. Matthew Raskin, US head of rates research at Deutsche Bank, is sticking with a prediction that the 10-year yield will fall to 4.8 percent by year-end but says the current level of volatility warrants a more scenario-based approach. Based on fundamentals, there is a chance the 10-year could continue to rise and plausibly settle in a range of 5 percent to 5.5 percent and even above that. You do not have to make a lot of outlandish assumptions to get to yields at or above where they sit today, he said.
William Marshall, head of US rates strategy at Goldman Sachs, expects the 10-year note to fall to 4.75 percent by year-end, a decline of nearly 60 basis points from Wednesday’s peak. It is reasonable to still have the constructive medium-term view, he said. Underlying inflation pressures are fairly well contained, and the reasons inflation is high at the moment are things that are either in the rearview mirror for the most part, like tariffs, or things like the ongoing conflict in Iran. The baseline is that those things ultimately moderate, leaving the more structural components. Jay Barry, head of global rates strategy at JPMorgan Chase, sees the 10-year yield falling to 5.05 percent by year-end and says the yield has reverted to fair value for the first time in six months. He remains concerned that technical factors could continue to send yields higher. The bank’s most recent weekly Treasury Client Survey shows the investor base remains net overweight duration, in contrast to the periods around the onset of other hiking cycles over the last 30 years. Given that backdrop, and that central banks are tightening across developed markets, it raises the risk that yields can overshoot to the upside as long positions are unwound. Martin Tobias, rates strategist at Morgan Stanley, expects the 10-year yield to fall to 4.8 percent by year-end. The market is priced much more hawkish than the firm’s economists’ probability-weighted forecast for the Fed. The bear case for 10-year Treasuries is 5.25 percent, so the market has already effectively reached that on spot, and the bull case, tied to a global oil-induced recession, is 3.8 percent. With market forwards having already priced the bear case, the risk around Treasury yields is skewed much more favorably to lower yields, he said.
Nassim Taleb, the Black Swan author, warned at the Greenwich Economic Forum in Greenwich, Connecticut, on Tuesday that a pullback in demand for US Treasuries risks creating a fault line across markets, potentially hurting a record-beating stock rally. The bond market is very vulnerable, particularly as the US has to finance large fiscal deficits with investors who may become less willing to fund them, he said. Echoing concerns by Ray Dalio that the rising cost of US government debt could test demand for Treasuries, Taleb sees domestic investors as the bigger risk. He fears US retirees and funds pulling back from long-duration debt would be a greater blow than waning demand from China or Japan. With yields on long-dated US government bonds already at 24-year highs, the outlook for Treasuries is particularly challenging, said Taleb, a distinguished scientist for hedge fund Universa Investments. That creates a potentially uncomfortable divergence between buoyant equities and growing vulnerabilities elsewhere. The warning came as the S&P 500 closed at a record on Tuesday for the first time since August, buoyed by resilient corporate profits and the outlook for artificial-intelligence-related spending. The move marked the gauge’s fourth consecutive advance and longest winning streak in about two months as investors looked past lingering inflation concerns.
Taleb stopped short of predicting a crash, arguing that it is more about investors recognizing that markets can become increasingly fragile before an unexpected event exposes vulnerabilities. An expensive market can continue rising, he said, and the catalyst that eventually causes a selloff is inherently difficult to predict. It is false to think in terms of the market will go down, he said. You think in terms of risks increase. The appropriate response is not necessarily to turn bearish, but to structure portfolios so that they can withstand an unexpected shock. Always have a tail hedge, even if you have no reason to hedge, he said. He also cautioned against assuming that the tech companies currently driving the stock market higher will necessarily emerge as the ultimate winners from the artificial-intelligence boom. AI could transform the economy, but investors do not know which companies will ultimately benefit. Technology can fundamentally change the competitive landscape, leaving early leaders behind. It would be a trap to go invest in companies that benefit from AI simply because the technology is changing the world, he said. If you look backward, the companies that benefited were not the pioneers. He questioned how much the S&P 500 says about the health of the US economy. The index’s largest companies are global businesses, meaning their performance does not necessarily reflect the financial condition of American households. US companies are global, he said, arguing that investors should pay more attention to the experience of middle-income families than to the level of the stock market.
Higher yields are already transmitting into household borrowing costs. US mortgage rates climbed for a seventh straight week to their highest level in nearly three years, compounding the nation’s affordability problem. The contract rate on a 30-year fixed mortgage rose 19 basis points to 7.49 percent in the week ended October 2, its highest point since November 2023, according to Mortgage Bankers Association figures released Wednesday. It is up about half a percentage point over the past three weeks, marking the fastest increase since early 2023. Energy costs and overall inflation have climbed since the start of the Iran war, driving up yields for 10-year Treasury notes, which heavily influence mortgage rates and on Monday reached the highest level since 2002. Along with still-elevated prices, mortgage rates have prevented sales of previously owned homes and new-home sales from sustaining any momentum. The MBA purchase index, which measures loan applications, declined 2.1 percent, slipping to the lowest level in more than a year. The refinance gauge fell 7.5 percent, continuing a slide that started in mid-August. The MBA survey, conducted weekly since 1990, uses responses from mortgage bankers, commercial banks, and thrifts and covers more than 75 percent of all retail residential mortgage applications in the US.
The affordability squeeze is also reshaping the economics of leaving New York City for the New Jersey suburbs. For decades the family playbook was simple: keep the high-paying New York City job and move across the Hudson, where a lower cost of living let parents stretch a paycheck. The New Jersey suburban discount for families is dwindling. The budget required to sustain a dual-income family of four in New Jersey rose by about $40,800 between 2021 and 2026, an annual increase of 6.7 percent, according to the Living Wage Institute, a non-partisan public benefit corporation that tracks cost-of-living data including housing, child care, food, transportation, and healthcare. Every county in the state has seen family budgets grow faster than the 4.5 percent national median. New Jersey suburbs account for eight of the 20 US counties with at least 100,000 residents where family budgets have ballooned the fastest since 2021. Costs took off during the pandemic as housing prices spiked. Since 2023, the state’s childcare and healthcare cost growth has more than tripled, pushing annual family budget gains higher. Families that sought refuge from pricey city living in the Jersey suburbs are now seeing their budgets grow more rapidly than in Manhattan, where expenses rose 4.6 percent annually over the past five years. Places that were more affordable have started to see their costs increase, said Misael Galdámez, a researcher at the Living Wage Institute.
Kristyna Frantz lived in a three-bedroom apartment in the Washington Heights neighborhood of Manhattan for 10 years with her husband before moving to Fanwood, New Jersey, in 2024 shortly after she gave birth to twins. The couple is now closer to her in-laws who pitch in with daycare drop-off, but they are paying $5,000 for child care for three kids. In the city, their eldest was enrolled in a free city program. By her math, the communications professional would be paying $1,000 less a month for child care alone if they still lived in the city, and that does not include the lunches she now has to pack. At this phase, it is more expensive to raise kids in New Jersey than New York, she said. They are paying more in child care, commuting costs, and a mortgage that exceeds their city rent. The experience reflects a broader squeeze across New Jersey’s commuter belt. In Hudson County, a popular NYC commuter area along the Hudson that includes Hoboken and Jersey City, family-sustaining budgets have increased by an average 9.1 percent a year since 2021, the fastest pace of any US county with at least 100,000 residents. Raising a family is still more expensive in the city. By the institute’s measure, the after-tax income required to support a family of two working adults and two children reached $123,676 in 2026, about $12,000 shy of the $135,538 required in Manhattan.
Child care is a major reason for the rising cost of suburban New Jersey life. In Hudson County it runs $37,242 a year, roughly $5,200 more than in New York City. In the city, the burden has been eased somewhat by free pre-kindergarten and 3-K programs open to families of all income levels. A 2-K program is also being rolled out. For many young families living in New Jersey today, child care is their biggest expense, in some cases topping their mortgage or rent payment, said Sharon Levine, campaign director for childcare advocacy group Start Strong NJ. The group is pushing the state to expand the number of working parents and those in school who can qualify for childcare tuition assistance. Inflation is not the only force. An influx of new residents has added to the pressure, Galdámez said. New Jersey’s population has been ticking up since 2023, with almost 57,000 coming from the state of New York between 2023 and 2024, according to Census data from USA Facts. The gap in housing costs between New York City and the suburbs has also narrowed. While home-price increases across New Jersey have slowed since the pandemic, areas with quick train access to Manhattan have continued to boom as bosses call workers back to the office. Pre-pandemic it was affordable everywhere in New Jersey for a family to lay down roots outside of the city, said Jeffrey Otteau, chief economist at his New Jersey real estate firm. Today, if your household is making $150,000 or less, it is not a safe haven for affordability. Scott Paer, a marketing and communications executive, and his wife moved to Westfield, New Jersey, in 2025 looking for more space than their two-bedroom apartment in Manhattan could offer for their toddler son. Three-bedrooms in Manhattan were exorbitant, so they looked across the river for a home within commuting distance. They were outbid on 11 properties in commuter towns before buying a home in Union County, about 25 miles from New York City. We certainly did not save any money, Paer said. We spent more, mostly because of mortgage and other homeownership-related costs.
The same yield and credit backdrop is reshaping the financing of the artificial-intelligence buildout. A measure of SpaceX’s credit risk surged to a fresh high and the company’s bonds tumbled in the secondary market on Wednesday, following reports the company is in talks with banks and investors to raise $40 billion to buy chips from Nvidia. The price of five-year credit default swaps on the company’s debt rose as much as 0.162 percentage point, or 16.2 basis points, to around 197.1 basis points a year, according to ICE Data Services. It is the highest intraday level since the swaps tied to Elon Musk’s rocket, satellite, and AI conglomerate started actively trading in June. Worries also showed in the US investment-grade secondary market, with tech and media companies’ notes sliding. Spreads on SpaceX’s 5.875 percent bonds due in 2036 widened 12 basis points to 200 basis points as of 10:30 a.m. in New York, according to Trace. That is significantly wider than the 140-basis-point spread the issue was sold at in June, part of the company’s $25 billion debt deal. This is mainly about how much debt SpaceX is adding and how fast, said Tony Trzcinka, a portfolio manager at Impax Asset Management. To attract investors to significant additional debt, the company would have to offer a higher yield. As a result, the existing bonds have to fall in price now so that their yields stay in line with what the new bonds will likely pay.
Tech companies and AI model developers are investing and borrowing hundreds of billions of dollars to build and lease giant data centers full of chips, and it is unclear when the wave of debt will crest. Hyperscalers, data centers, and other AI infrastructure projects have borrowed around $370 billion worldwide in investment-grade and high-yield bond markets this year, up from around $125 billion in all of 2025, according to data compiled by Bloomberg. This is unprecedented debt supply with no real ending in sight, Sal Naro, chief investment officer at Coherence Credit Strategies, told Bloomberg News, speaking about AI debt in general. The world has never seen an infrastructure build like this. This is larger than the railroads because this is global, all at once. Other big tech, telecom, and media companies also saw their high-grade debt weaken. Spreads on Meta Platforms’ 5.25 percent notes due 2036 widened 7 basis points to 103 basis points, according to Trace. Premiums for Skydance’s 8.75 percent 30-year bonds widened 9 basis points to 339 basis points, just days after being sold at a spread of 315 basis points.
SpaceX is looking to raise $40 billion in what would be among the biggest-ever debt financings for the AI buildout. The fundraising discussions are in an early stage and could end without a deal, Bloomberg reported, citing people familiar with the matter. The firm is seeking about $10 billion in bank loans and $30 billion in investment-grade debt to pay for the Nvidia chips, the Financial Times reported, citing unidentified sources. It added that Apollo Global Management is leading the financing, which is not expected to close until 2027. A representative for SpaceX was not available for comment. Just last month, Musk said Colossus 2, an AI computing cluster built by his xAI business, may more than double its current Nvidia chip count by the end of the year. It was the most detailed timetable he has given for expansion plans for the Memphis-area cluster. Colossus 2 now has 110,000 Nvidia GB200 chips and 440,000 GB300s, Musk said in a post on X. A further 220,000 GB300s are due to be operational next week, with another 220,000 expected in November. An additional 220,000 may come online late December if we get lucky, he said. Nvidia owned about 1.5 percent of SpaceX shares as of June 30, according to a regulatory filing, worth about $21 billion as of Tuesday’s close. The worldwide expansion of computing capacity has sent the cost of everything from land to chips and power-generation equipment soaring, touching off a series of massive financing deals. Broadcom’s Wall Street syndicate is starting to gather $60 billion of fresh AI chip financing to benefit Anthropic and other companies, people familiar with the matter said just days ago.
Billionaires tied to the artificial intelligence industry were among the top insider sellers in the third quarter, a turbulent period for technology stocks that also brought increasingly stark warnings about the potential risks posed by AI. Billionaire venture capitalist and Nvidia director Mark Stevens topped the list during a quarter that saw the chipmaker’s stock valuation approach its cheapest level in over a decade. Other AI-linked billionaires on the top 10 list included Arista Networks Chief Executive Officer Jayshree Ullal and Amazon founder Jeff Bezos, according to the Washington Service, which tracks insider buying and selling. The three have a combined net worth of $302 billion, according to the Bloomberg Billionaires Index. AI-linked stocks tumbled in July amid growing fears about the enormous sums of money pouring into the industry. They rebounded, then took another hit after Anthropic’s Dario Amodei and OpenAI’s Sam Altman in mid-September called for a slowdown in development of advanced AI models. Many of those stocks quickly recovered amid new developments such as Meta Platforms’ Muse and anticipation of Nvidia’s next-generation AI architecture. While AI insiders made up nearly all of the top sellers in the second quarter, last quarter also saw executives with health and biotech companies including BeOne Medicines, United Therapeutics, and Illumina selling off stocks at a rapid clip. The Washington Service data includes board directors who report such sales on behalf of their firms, but excludes sales by insiders conducted as part of a public offering. The individuals listed did not respond to requests for comment unless otherwise noted.
Stevens, whose net worth is $12.2 billion according to Bloomberg’s wealth index, sold over $946 million of shares in the chip developer at the heart of the artificial intelligence boom during the quarter. Though Nvidia’s shares are up nearly 30 percent this year, that growth is less dramatic than other semiconductor makers like Intel and Advanced Micro Devices, which have both more than tripled. Nvidia’s earnings continue to grow faster than its valuation, reflecting Wall Street’s skepticism even as the company’s revenue continues to balloon. Nvidia CEO Jensen Huang has pushed back against AI leaders’ warnings about the technology’s risks to humankind, calling a slowdown in development completely unnecessary. Stevens remains Nvidia’s second-largest individual shareholder after Huang. Jayshree Ullal, one of the world’s richest women with a net worth of $8.7 billion, unloaded some of her holdings in August as the networking equipment provider’s shares rose, according to filings with the US Securities and Exchange Commission. The sales were made pursuant to 10b5-1 trading plans, which allow executives to signal in advance their intention to sell. Ullal still owns a 2 percent stake in Arista, which is benefiting from the AI boom as a mass buildout of data centers drives demand for connectivity. In early August, Arista Networks forecast third-quarter revenue of $3.3 billion, beating the average analyst estimate. The company declined to comment.
Activist investor Keith Meister joined life sciences company Illumina’s board in March 2025 and started cashing out his shares this year through Corvex Management, the hedge fund he founded. Illumina recently joined the S&P 500 Index after the company increased its revenue and earnings guidance for the year. As of September 4, Meister still holds 6,780 shares directly in Illumina, amounting to a market value of $1.86 million. Last year, Illumina was caught up in President Donald Trump’s trade war with China, which blacklisted the company as part of a series of retaliatory actions for Trump-ordered tariffs. That import ban was lifted in November and the stock has been recovering since. Xuning Wang, who is worth $10.6 billion according to the Bloomberg Billionaires Index, received a one-time limited waiver from SharkNinja’s board to sell a portion of his holdings in July. SharkNinja, the largest seller of small kitchen appliances in the US, had revenue of $6.4 billion in 2025. Wang owns about 35 percent of the company.
CoreWeave, a provider of computing power for artificial intelligence systems, has become a bellwether for the AI data center boom. As the company’s stock price has bounced around since its 2025 initial public offering, the company’s executives, led by Intrator, have unloaded billions of dollars of their holdings under 10b5-1 trading plans. The company has said the executives remain confident in the company’s future and the selloffs are part of routine plans to manage their liquidity over time. Intrator said the backlash to the data center buildout has not impacted the company’s bottom line, telling CNBC on September 30 that there has absolutely not been any reduction in orders. He predicted data centers in the future will be built in communities that welcome the new complexes. CoreWeave declined to comment. Bezos sold 25 million shares of Amazon in 2025 and has continued to sell this year under a pre-arranged trading plan, shedding over 1 million in the third quarter. In an August filing, Bezos said he planned to sell up to 15 million shares worth more than $4 billion. Amazon recently became the fifth company to surpass $3 trillion in market value after reporting strong revenue for its cloud-computing business, joining Nvidia, Alphabet, Microsoft, and Apple as the only firms that have reached that size. The stock has been volatile this year amid growing investor fears that companies are over-spending on the AI boom. Bezos is the third-richest person in the world with a fortune of $281 billion.
Martine Rothblatt, the founder of biotechnology firm United Therapeutics, sold shares worth more than $314 million this quarter through a pre-arranged 10b5-1 plan, which is scheduled to remain active until either the exercise of 1.7 million stock options or the end of the year. The sales came as United Therapeutics won a major legal victory last month in a patent battle with Liquidia over its lung therapies. John Oyler, chair and CEO of oncology company BeOne Medicines, offloaded 904,384 shares under a pre-established 10b5-1 trading plan. Oyler still owns nearly 5 percent of the company. His sales came as the company’s shares have gained about 20 percent this year. The Trump administration in August struck new drug-pricing agreements with nine biotech and pharmaceutical companies, including BeOne. As part of the deal, the companies agreed to provide discounts on outpatient drugs to state Medicaid programs. A spokesperson for BeOne on August 31 said its agreement exempts the company’s medicines from two upcoming pilot programs testing price reductions in Medicare for physician-administered and pharmacy drugs. Rocket Lab CEO Peter Beck and other company executives sold a combined $5.49 million worth of shares over the summer as the space company undergoes a major transformation. In late June, Rocket Lab agreed to buy Iridium Communications, a pioneer in satellite telephones, as it seeks to compete with SpaceX’s Starlink service. Beck said Iridium will provide the tools needed for Rocket Lab to operate its own satellite constellations to provide telecommunications and internet services. You can have all the satellites you want on the ground and all the rockets in the hangars that you want, but if you do not have the spectrum and the landing rights to be able to ultimately provide the services you need, then it is all for nothing, Beck said in a June interview with Bloomberg News. Dutch businessman Frank Slootman, who stepped down as Snowflake’s CEO in 2024, has been unloading Snowflake stock options under a pre-arranged plan. He is worth $3.5 billion, according to Bloomberg’s wealth index. Snowflake declined to comment.
In private equity, some firms are demanding a larger share of future gains as they seek to hang onto prized investments. Not content with the standard carried interest, some are now seeking super carry in single-asset continuation vehicles, funds created to hold onto certain investments. Provisions for super carry, anything exceeding the standard 12 percent to 20 percent range for carried interest, were included in almost a third of new single-asset continuation vehicles created in the first half of 2026. That is almost triple the level from a year earlier, PJT Partners said in a report. When Parthenon Capital Partners set out to extend its control of Kroll Bond Rating Agency, the firm sought a higher share of profits to manage a new fund that would hold the portfolio company. While multiple investors balked at the terms, HarbourVest Partners finally agreed, allowing Parthenon to raise more than $1.7 billion for the single-asset continuation vehicle. The growth of super carry for secondary transactions shows that even as a majority of private equity funds struggle to exit investments, the most sought-after deals still give leverage to the manager. The super carry deals could offer a reprieve for rainmakers who are struggling to earn any carried interest at all from some funds as higher interest rates have crimped dealmaking. That has prompted some to jump to firms with more profitable funds, become independent sponsors that focus on one deal at a time, or even quit the industry altogether.
Just because buyers agree to a super-carry structure does not mean managers will collect the higher payouts. They first need to hit certain targets, and triggers vary deal by deal. Some backers will insist on an internal rate of return of 30 percent or a return on invested capital of at least three times, or a combination of both. One dealmaker said his firm’s internal estimate is that only a fraction of such agreements will result in triggering super carry. Sponsors should have an incentive to continue to maximize value above certain levels within the portfolio performance, said David Perdue, a partner in PJT’s strategic advisory group. Privately, buyers say they still may be willing to allow asset managers to take a greater share of profits because competition is stiff for the most coveted assets. Some also relent because of a fund manager’s track record or deep knowledge about an underlying asset. While some potential backers balked last year at Percheron Capital’s request for super carry on a $1.62 billion fund for Big Brand Tire & Service, it persuaded other investors to go along, including Blue Owl Capital, Iconiq, and Warburg Pincus. In general, we support structures that align sponsors with investors, paying sponsors more only when investors earn more, a spokesperson for Blue Owl said in an emailed statement, while declining to comment about a specific transaction. Leonard Green & Partners’ Sage fund, which backs single-asset continuation funds, agreed to a super-carry structure for Falfurrias Management Partners’ deal on Crosslake, a technology advisory firm. Accel-KKR, which already takes super carry on its primary funds, persuaded buyers in its continuation funds to agree to a premium as well, albeit with a higher threshold for returns, according to people familiar with the matter. Not all money managers can persuade investors to pay them super carry. Lightspeed Venture Partners, which is seeking $600 million for a multi-asset continuation fund, proposed super carry of 25 percent for the deal, but lead buyer Coller EQT batted that down, according to people familiar with the negotiations. Representatives for the firms declined to comment or did not reply to messages seeking comment.
Credit stress also surfaced in a specialized corner of consumer finance. A US lender specializing in loans to international students has largely shuttered its operations after losing access to fresh financing, marking one of the most significant corporate collapses triggered by the Trump administration’s immigration crackdown. Mpower Financing had come to rely heavily on borrowers from several African nations, particularly Zimbabwe, a country that the administration added last year to a partial travel-ban list. A person with direct knowledge of Mpower’s lending strategy said the concentration of loans to Zimbabwean students had grown beyond what the company intended, leaving it especially vulnerable to the policy shift. Mpower’s business model essentially consisted of tapping warehouse financing, including a credit line from Deutsche Bank, to fund student loans before bundling them into asset-backed securities sold to money managers. The proceeds were used to repay the facilities and free up capacity for new lending. When demand for its ABS dried up earlier this year after the restrictions took effect, the funding cycle broke down, sharply limiting Washington, DC-based Mpower’s ability to make new loans, according to an investor letter seen by Bloomberg. Efforts to sell the company around the same time also failed.
After cutting most of its employees, including founder and Chief Executive Officer Manu Smadja, Mpower last month canceled its quarterly shareholder call and warned equity investors they were likely to be wiped out. The company has more than $400 million of outstanding ABS and is now in talks with creditors over what happens to its remaining assets and operations, according to the letter. The policy changes severely limit the total addressable market of students the company can serve, the company’s willingness to lend based on post-graduation creditworthiness, and third parties’ willingness to provide the capital necessary for the company to make those loans, Mpower Chief Legal Officer James Breheny wrote. A skeleton staff continues to handle remaining contractual, regulatory, and administrative obligations. Mpower did not respond to requests for comment, while Deutsche Bank declined to comment. Smadja did not reply to a message seeking comment.
After launching in 2014, Mpower grew to more than 25,000 borrowers across over 150 countries, fueled in part by its repeated use of the ABS market for funding. The growth masked financial strain, including a cash crunch that prompted rescue funding from owners Tilden Park Capital Management and King Street Capital Management early last year. Still, it was able to securitize more than $300 million of student loans just months later. The company had not planned to become so exposed to one relatively small market, but its focus on borrowers from Africa was deliberate, said the person familiar with Mpower’s lending strategy, who asked not to be identified because they are not authorized to speak publicly. That was partly because competing for Indian and Chinese students, who make up the bulk of international enrollment, was more expensive. To cut down on costs, the company turned to student ambassadors, some of whom had sizable social-media followings in Zimbabwe, to encourage prospective borrowers to finance their studies through Mpower. A March provisional credit rating report from Morningstar DBRS showed that over a third of the loans in a proposed ABS being led by Goldman Sachs that was never sold were from borrowers from the African nation. That compares to 13 percent in a 2025 deal and less than 5 percent in a 2024 securitization. A few months later, Deutsche Bank sought to revive the deal, only to be met with investor concerns over the collateral and geographic concentration of the loans, according to people familiar with the matter. The transaction fell through again.
The company historically relied on securitizations and other financing sources to generate liquidity, recycle capital, and support continued student loan originations, the letter to shareholders said. The inability to complete the proposed securitization transactions materially constrained the company’s liquidity and its ability to continue originating student loans. In April, Mpower laid off more than half of its employees. By July, Smadja, the CEO, as well as the company’s chief financial officer were let go, along with much of the remaining staff. An audit was conducted to assess whether the company had sufficient financial resources to continue operating, the people familiar said. Deutsche Bank ultimately terminated the credit line Mpower was using to help fund its lending after a financial covenant was breached, the people added, and the company stopped originating new loans. Mpower, now majority owned by Tilden Park and King Street after the financial lifeline they provided last year left them with an 85 percent stake, is deciding what to do with what remains of the business. Representatives for the investment firms declined to comment. Breheny said in the letter that the company is in talks with secured lenders over what happens to its remaining assets, with possible outcomes including a negotiated transfer or creditor seizure. Either way, he said he does not expect shareholders to receive anything.
Energy markets remained the transmission mechanism for the geopolitical shock. Brazil awarded more than half of the oil blocks it offered in a deep-water region off its southeastern coast on Wednesday, drawing bids from Brazilian independent PRIO and oil majors including Petrobras and Equinor. Chinese oil majors CNOOC and China Petroleum & Chemical, or Sinopec, also jointly won a block without any local partners. Overall competition was limited, with 7 of the 13 blocks offered in the pre-salt area attracting only one bid each. Some blocks that were considered attractive, such as the Opala prospect in the Santos basin near the giant Buzios field, did not get any offers. Still, premiums were high for a record number of blocks awarded in a production-sharing auction, said Luis Fernando Paroli, the president of PPSA, a state company that represents the government’s interest in pre-salt oil projects. Companies are targeting areas near existing operations to connect any discoveries to existing production systems, he said. The pre-salt’s largest areas have already been explored, he told reporters at the bid round in Rio de Janeiro. There are other promising areas, but because we are talking about ultra-deep waters, discoveries need to be very large to be economically viable.
The blocks are under a production-sharing model where companies compete by offering the largest share of profit oil to the government. The highest profit oil offered was 32.8 percent bid by PRIO for the Magnetita block. PRIO said the two pre-salt blocks it has are near its Frade and Wahoo projects, and any exploration successes could be connected to its Valente floating production vessel. Brazil’s pre-salt is one of the world’s most prolific offshore oil regions. Its development has helped turn the country into Latin America’s largest producer and one of the biggest sources of new supply in the Americas this year as the Iran war upended global oil markets. But a wave of giant discoveries that started about two decades ago has faded and Brazil’s output is expected to start declining in the 2030s. Brazil’s hopes lie in other exploration areas, said Marcelo De Assis, an independent oil consultant based in Rio de Janeiro. His overall view was a weak result with no competition, low government profit oil percentages, and about half of the blocks gone. The Rodocrosita block in Santos basin won by Equinor has synergies with its Bacalhau project, its largest offshore field outside of Norway, said Letícia Andrade, its vice-president for exploration and production in Brazil. The company won the block in partnership with Galp Energia, which has a minority 30 percent stake. Equinor also won the Rubi block in the same basin with a 100 percent stake. More than 300 additional blocks on land and in more frontier exploration areas were to be offered later Wednesday by Brazil’s oil regulator, known as the ANP, under a separate concession model.
In Britain, record wind generation was not enough to break reliance on costly gas. Wind turbines generated 6.62 terawatt-hours of electricity in September, a record for the month and 4 percent more than a year earlier, helping push gas-fired generation to its lowest level on record for a September. Yet day-ahead power rates still doubled from a year earlier. The surge in wind generation marks progress toward the government’s goal of a largely clean power system by 2030, but high prices underscore the market’s continued exposure to natural gas. Even as the fuel generates less electricity, it continues to set the price during crucial periods of the day. That is because the nation operates a marginal pricing system, where the cost of the most expensive generator needed to meet demand determines the price for that time period. Gas futures have surged as the Iran conflict disrupts supplies from the Persian Gulf, including Qatari cargoes affected by the closure of the Strait of Hormuz. Europe is also struggling to rebuild storage amid intensifying competition for supplies. In September, day-ahead power prices averaged £135.39 per megawatt-hour on the Epex Spot exchange. During the 10 percent of hours with the highest gas generation, rates averaged about £184 per megawatt-hour, roughly 42 percent more than during the rest of the month, according to Bloomberg calculations. The government is closely watching wholesale energy costs as it seeks to ease pressure on household finances. UK energy bills are forecast to jump by about 25 percent in January as disruptions to gas supplies continue, according to a Bloomberg Economics analysis published in September. The September wind record is part of a broader increase in renewable generation this year. Wind output in the first nine months was 14 percent above the previous record for the period, while overall renewable generation was about 15 percent above its previous high, according to NESO data.
