On Friday, a rebound in semiconductor shares drove the Nasdaq higher, while economic data reinforced expectations that the Federal Reserve will raise rates in December, though bargain hunters continued to pour into the market. San Francisco Fed President Daly stated that the Fed is prepared to raise rates further if needed, and that monetary policy still needs to be tightened, but more information is required to determine how much further tightening is necessary and when to act. Daly stressed that the Fed must proceed cautiously.

At the close, the Dow fell 237.32 points, or 0.46%, to 51,285.73; the S&P 500 gained 23.13 points, or 0.31%, to 7,376.86; and the Nasdaq rose 264.42 points, or 1.09%, to 24,579.42. Semiconductor stocks mostly rebounded, with SK Hynix (SKHY.US) climbing 2.78%, NVIDIA (NVDA.US) rising 2.78%, Advanced Micro Devices (AMD.US) surging 11.04%, Intel (INTC.US) gaining 7.71%, Micron Technology (MU.US) adding 5.12%, Marvell Technology (MRVL.US) up 5.73%, and Arm (ARM.US) advancing 4.74%. Tesla (TSLA.US) rose 4.23%, and SpaceX (SPCX.US) jumped 8.62%. The Nasdaq Golden Dragon China Index gained 1.67%, with Alibaba (BABA.US) up 1.26%, NetEase (NTES.US) up 2.28%, and Baidu (BIDU.US) up 3.01%.

In European equities, Germany's DAX 30 fell 540.55 points, or 2.05%, to 25,789.50; the UK's FTSE 100 dropped 109.28 points, or 1.01%, to 10,673.38; France's CAC 40 declined 66.37 points, or 0.81%, to 8,139.00; the Euro Stoxx 50 shed 69.99 points, or 1.12%, to 6,161.55; Spain's IBEX 35 fell 100.51 points, or 0.52%, to 19,350.39; and Italy's FTSE MIB dropped 460.37 points, or 0.91%, to 50,045.50.

In foreign exchange, the dollar index, which measures the greenback against six major currencies, rose 0.74% to close at 102.298. At the New York close, the euro traded at 1.1140 dollars, down from 1.1225 the previous session; the pound was at 1.3351 dollars, down from 1.3459. The dollar was at 158.49 yen, up from 157.85; 0.8206 Swiss francs, up from 0.8165; 1.4132 Canadian dollars, up from 1.3998; and 9.8988 Swedish kronor, up from 9.7948.

In cryptocurrencies, Bitcoin hovered below 76,000 dollars, last at 75,846 dollars; Ethereum edged up 0.07% to 2,236 dollars.

In precious metals, spot gold fell 0.41% to 4,071.58 dollars; spot silver rose 0.31% to 51.97 dollars an ounce.

In crude oil, December light sweet crude on the New York Mercantile Exchange rose 31 cents to settle at 90.83 dollars a barrel, up 0.34%; January Brent crude in London rose 3 cents to settle at 98.32 dollars a barrel, up 0.03%.

Macro News

High prices continue to erode purchasing power, and US consumer sentiment remains subdued. A preliminary University of Michigan survey showed consumer sentiment rose about 6%. Expectations for personal finances and the business environment improved in several areas, but the improvement was concentrated among independent voters. While confidence among low- and middle-wealth consumers rebounded, confidence among high-wealth consumers with substantial stock holdings fell 5% after recent stock market volatility. In addition, consumer comments showed growing concerns about an AI bubble. However, the cost of living remained the top concern, more than AI-related worries. About 57% of respondents volunteered that high prices had eroded their standard of living, the highest since May this year and above 46% before the Iran conflict broke out in February. Although sentiment improved this month, it was still down 10% from February. The survey was conducted from October 20 to November 2. In the two months before the midterm elections, more than two-thirds of consumers expected Democrats to win control of the House, and more than half expected Democrats to win the Senate. One-year inflation expectations fell to 4.3% from 4.7% last month. While the lowest since August, it remained well above the 3.4% seen in February before the Iran conflict and above all readings in 2024. Longer-term inflation expectations edged down to 3.4% from 3.5% in October, still well above the 2.8% to 3.2% range in 2024.

US October nonfarm payrolls rose by 165,000, and the dollar posted its biggest one-day gain in nearly five months. US nonfarm payrolls increased by 165,000 in October, far exceeding expectations of 65,000, while the unemployment rate fell to 4.1%. The strong jobs data pushed the probability of a 25-basis-point Fed rate hike in December to nearly 80%, and the dollar index rose 0.71% to 102.31, its biggest one-day gain since June 17; the euro, pound, and yen fell 0.72%, 0.74%, and 0.5% against the dollar, respectively. Treasury yields also rose, with the 10-year up to 4.85% and the 2-year up to 4.52%. Fed officials Williams, Musalem, and Daly all stressed that inflation pressures remain, with Daly saying the Fed may still need to raise rates further.

The US is considering easing restrictions on some sanctioned tankers to ease freight and oil price pressures. According to reports, at least four companies—Trafigura, Vitol, Mercuria, and Abu Dhabi National Oil Company (ADNOC)—are in talks with the US government to seek permission to buy or charter some tankers blacklisted by US sanctions for involvement in illicit oil transport, in order to ease a global shortage of tanker capacity and lower transport costs. The talks involve about 50 of roughly 1,600 US-sanctioned vessels, including very large crude carriers capable of carrying 2 million barrels of crude. The US Treasury is reviewing the applications and may authorize them on a case-by-case basis rather than granting broad waivers. No final decision has been made, and approval timing is uncertain. Still, whether the measures can effectively lower oil prices remains unclear. Reactivating idle tankers could increase effective capacity, but some older tankers pose maintenance and safety risks. As of November 4, the US had sanctioned 1,568 vessels, including 462 crude oil tankers. The US also needs to prevent such authorizations from funding sanctioned entities, and US licenses cannot lift other sanctions imposed by the EU and the UK.

Company News

Musk: SpaceX annualized revenue could top 100 billion dollars by year-end. In an interview on Friday, Musk said he still expects SpaceX (SPCX.US) annualized revenue to exceed 500 billion dollars by the end of 2027, which he considers the most reasonable forecast; reaching 1 trillion dollars is not entirely impossible, but only about a 2% probability. He expects SpaceX annualized revenue to exceed 100 billion dollars by the fourth quarter of 2026, up about 70% quarter over quarter, but stressed those figures are personal expectations, not commitments. Musk also said revenue from the US government will account for less than 10% this quarter and fall below 5% a year later, adding that the company's government business offers the highest-quality products at the lowest prices. After the news, SpaceX shares rose more than 8% at one point.

Report: Microsoft gradually terminating AI computing lease agreement with Oracle. According to media reports citing people familiar with the matter, Microsoft (MSFT.US) has stopped renewing its AI computing lease contract with Oracle (ORCL.US) and has been gradually shutting down rented computing resources in recent months. The sources said the servers Oracle provided use older-generation NVIDIA (NVDA.US) chips and no longer meet Microsoft's current technical specifications. The two sides reached the agreement in 2023 to provide computing power for the new AI-powered Bing search engine, and the contract value is unknown. Oracle responded that demand for its AI infrastructure remains strong and older-generation GPUs still have a market. Microsoft is reassessing external AI computing partnerships, having previously committed more than 80 billion dollars in computing lease spending to emerging cloud providers such as CoreWeave (CRWV.US), Nscale, and Nebius (NBIS.US). Earlier reports said Microsoft management has grown increasingly dissatisfied with the high costs and project delays of some suppliers, recently strengthening scrutiny of data center projects, exiting some high-risk projects, and reconsidering whether to sign new computing cooperation agreements. Meanwhile, Oracle's cloud business is expanding rapidly, but heavy capital spending has turned free cash flow negative, intensifying investor concerns about returns on its AI infrastructure investment. Its shares have fallen by more than half from this year's high.

Buffett's successor bets on AI, drawing attention to Berkshire's multibillion-dollar push. In his first year as chief executive of Berkshire Hathaway, Greg Abel has taken the investment group into a new field: artificial intelligence. In a clear departure from Buffett's long-standing caution toward tech stocks, the new CEO began deploying large sums soon after taking office. Within just a few months, he invested 10 billion dollars in Google parent Alphabet (GOOG.US, GOOGL.US) to support its AI-related investments, and also added 930 million dollars to Italian group Bending Spoons SpA, which uses AI to transform businesses. However, as cracks begin to appear in AI trades, the timing of Berkshire's sudden increase in related investments may look less than ideal. CFRA Research analyst Cathy Seifert said: "I do think some of this may be a deliberate increase in AI exposure. But one also has to ask: is it a bit too late to enter now?" Still, for staunch value investors and longtime Berkshire watchers, these market swings may not matter. After all, when Buffett invested in Apple in 2016, he was criticized for missing the iPhone maker's best growth phase, yet it ultimately became one of Berkshire's most successful investments. Keefe Bruyette & Woods analyst Meyer Shields said Abel likely views Berkshire's AI investments as a bet on the technology's long-term potential.