WSJ : The Earnings Boom Is Heavily Reliant on Just a Handful of Stocks Ten compa

The Earnings Boom Is Heavily Reliant on Just a Handful of Stocks
Ten companies—including Nvidia, Micron and other AI giants—account for roughly two-thirds of corporate profit growth

  • Analysts expect S&P 500 companies to report a 30% jump in third-quarter earnings from a year ago, driven largely by a handful of AI giants.
  • Just two companies, Nvidia and Micron, account for 34% of the projected S&P 500 third-quarter profit growth.
  • Analysts warn that concentrated earnings growth poses a risk if artificial-intelligence technology fails to deliver on the massive investments.

Wall Street has rested much of its optimism about the stock market on a surge in corporate earnings. The catch is that the profit growth is being driven by a handful of AI giants.

Analysts expect companies in the S&P 500 to report a 30% jump in third-quarter earnings from a year ago, according to FactSet, boosting investor confidence that the good times can keep rolling so long as businesses keep printing money. But just two companies—Nvidia NVDA -0.59%decrease; down pointing triangle and Micron—account for 34% of that growth, according to a Dow Jones Market Data analysis.

And only 10 companies—including Broadcom and Meta Platforms—account for roughly two-thirds of the profit growth. Others include oil-and-gas giants that benefited from higher energy prices caused by the conflict in Iran.

It is another way the U.S. stock market has come to depend on a handful of companies tied to the artificial-intelligence trade—and the fervid race to build the infrastructure that supports the technology, as costly as it may become.

The risk posed by that concentrated earnings growth, analysts said, is the same one underpinning the broader AI investing boom: that the technology ultimately won’t deliver on the massive sums of money being poured into it.

In other words, the fear is that “we’re going to end up converting all these data centers into pickleball facilities,” said longtime stock analyst Ed Yardeni.

Those worries resurfaced this past week, when Meta’s plans for a cash-raising spree helped trigger one of the Nasdaq’s worst selloffs this year.


Many investors aren’t too concerned with extraordinary profit growth being driven by a small group of companies. For one, earnings across the market are still growing, albeit at a slower pace. Even without the top 10 stocks juicing growth, the rest of the S&P 500 is expected to deliver a 10% jump in profit from a year ago—a respectable showing, especially for a bull market that has now stretched into its fourth year, said Chris Grisanti, chief market strategist at MAI Capital Management.

The companies with the fastest growth are “the best on an all-star team right now,” he said, “but the rest of the team is carrying its weight.”

Another reason to be optimistic: Investors are already factoring in that the supersize profit increases won’t last forever.

Even as earnings estimates surged this year, share prices—for the market and the firms driving the growth—have moved relatively little in comparison. That means equities look cheaper than they did at the start of the year.

“The market is being uncharacteristically wise,” Grisanti said. “We’re not in anything like euphoria.”

Still, Grisanti said his team is among those preparing for an earnings slowdown, shifting from “picks and shovels” plays to take a larger position in power providers. As the data-center build-out progresses, the thinking is that demand for electricity will keep growing even as memory-chip supply constraints ease.

For Nvidia and Micron, profits have been fueled by extraordinary demand for memory and other AI chips that has given suppliers extraordinary pricing power. The numbers are eye-popping: Last month, Micron reported that its quarterly profit had multiplied more than 10-fold from the year prior, or 1,078%. Analysts expect a 90% leap for Nvidia, according to FactSet.


Money managers have for months pointed to climbing corporate profits as a crucial reason why stocks could blow past a list of anxieties that included rising interest rates, conflict in the Middle East and a bond market set on edge.

But the momentum in artificial-intelligence stocks isn’t just about the profits companies are generating now, it is also about the projection that mammoth demand for AI tools will translate into big profits well into the future. Whenever that excitement dims even a little bit—over concerns about availability of capital or completion of data centers—investors pull back.

Analysts said it is likely those doubts will keep surfacing periodically on Wall Street, with this past week serving as an example. The cycle has earned many comparisons with the dot-com boom of the late ’90s, another tech-driven bull market with a famously unhappy ending.

Larry Adam, chief investment officer at Raymond James, thinks there is one key difference with the comparison: dot-com companies weren’t making money like this.

“This is not back to 2000,” he said. “In many ways, I think the market has been pretty rational.”

FT : Mercuria challenging the ‘Dow Jones of shipping’ in court after Hormuz loss

Mercuria challenging the ‘Dow Jones of shipping’ in court after Hormuz losses
Case will test the Baltic Exchange’s decision to keep publishing price estimates for shipping oil through the Strait of Hormuz during the war

One of the world’s largest commodity trading houses is suing a 282-year-old shipping institution over whether it should have continued to publish benchmark freight rates for ships sailing through the Strait of Hormuz after war broke out this year.

Mercuria has brought the case against the Baltic Exchange, which will be heard from Monday in the English High Court. It will argue Baltic should have suspended the index used to price journeys on its flagship tanker route through the Strait of Hormuz after the US and Israel launched strikes on Iran in February.

The Baltic, described by one shipping executive as the “Dow Jones of shipping”, publishes rates that dictate freight costs for commodities in a market that is difficult to price and famously opaque. Contracts are negotiated privately, vessels and routes differ, and transactions may be infrequent.

The Baltic’s rates are used by commodities traders to price derivatives worth billions of dollars that hedge their risks.

“The Baltic became one of the great institutions of shipping because it is the only place you could go to on a daily basis that would give you, across the most common cargoes on the most common routes, the daily price for shipping,” said Mark Williams, chief executive of trade association Maritime London, who added that the various Baltic indices were not an “actual price but what the brokers think the rate on that day would be”.

Traders, brokers and industry executives see Mercuria’s challenge as a critical test of the Baltic and whether its system of assessing rates still works as shipping is targeted in ongoing conflicts.

“The Baltic has to be on its toes and make sure whatever information it uses is correct. Lately, with all the geopolitical issues we have had, especially around tanker transportation, they were behind the curve,” said Philippe van den Abeele, founder of Consortium Maritime Trading and a member of the Baltic Exchange since 1981.

Platts, seen widely as the Baltic’s main competitor, suspended its own rating process for oil grades shipped through Hormuz two days after the war began.

Mercuria originally claimed that it had lost “hundreds of millions” of dollars over the Baltic’s decision not to suspend the benchmark known as “TD3C”, which tracks the daily cost of transporting 270,000 metric tonnes of crude oil from the Middle East Gulf to China.

It said in its claim, seen by the FT, that the benchmark should have been paused after a steep decline in shipping traffic through the strait and Iran’s claims that it was “closed”.

The trader is not seeking damages but “declaratory relief” that would require the Baltic to suspend the TD3C benchmark and render publications of the rate since early March invalid. It has since amended its claim to remove any reference to financial losses.

People close to Mercuria said the claim was about transparency rather than cost, adding that the trader had never sought damages and instead was seeking declarations that the Baltic had breached statutory and contractual duties and that determinations since early March 2026 were invalid.

The Baltic has responded in its defence that it is not unusual for a route to have “little or no activity for a period of time” and that some ships were still passing through the waterway carrying oil.

It also said that it relied upon “highly experienced and knowledgeable” shipbrokers who had continued to provide rates.

If Mercuria is successful, the Baltic’s lawyers have said it would have “chaotic marketwide consequences”.

People close to the Baltic warned that hundreds of trades might have to be unwound.

“It’s a mess,” said one shipbroker. “Mercuria were on the wrong side of some trades but they might have a point.”

At the same time, pricing from the Baltic has become increasingly important as freight rates make up a growing proportion of a commodity’s cost. The price of shipping a barrel of oil is as much as five times what it was last year in some cases, according to the International Energy Agency, adding to the cost for consumers.

For some traders and shipping industry players, TD3C has become an unreliable benchmark. Only a handful of ships have risked running the gauntlet through the Strait of Hormuz, many of them chartered by Gulf national oil companies willing to pay a high price to export their oil.

The Baltic launched a new benchmark called TD34 this month, which tracks cargoes from Fujairah, outside the Gulf, to China.

“Our main concern right now is continuity going forward. If this is the structure . . . we can’t rely on the Baltic and its procedures to hedge physical exposures,” said one industry executive.

“They should not produce prices on trades that are in the middle of a war zone. It contravenes basic benchmarking principles,” said van den Abeele.

Mark Jackson, the Baltic’s chief executive, said it was “confident that it has met and continues to meet all its statutory, contractual and regulatory obligations in the production of the TD3C benchmark” and that the Baltic “believes the claim from Mercuria is without merit and will defend it to the fullest extent”.

FT : Luxury groups’ value drops by €250bn as Chinese consumer demand fades Slowd

Luxury groups’ value drops by €250bn as Chinese consumer demand fades
Slowdown in China and cooling global stock markets are exacerbating a downturn for European sector

Top European luxury groups have shed about €250bn of market value this year as spending by Chinese consumers wilts and AI-driven stock market wobbles depress demand for high-end shoes and handbags.

Results from LVMH, Hermès and Gucci owner Kering this month all missed market expectations that had already been cut significantly, confirming fears that the luxury industry remains in the grip of a multiyear downturn.

Europe’s six largest listed luxury companies — which also include Richemont, Prada and Moncler — have collectively lost €251bn of market value this year. The declines have been steepest at LVMH and Hermès, the two largest luxury groups, whose market capitalisations have shrunk by €131.6bn and €93.3bn respectively.

Demand from shoppers in China was the industry’s motor of growth for over a decade but a prolonged property slump and weak stock market performance have undermined domestic demand over the past few years. Monthly retail sales growth in the world’s second-largest economy has averaged less than 0.5 per cent over the past six months, a sharp slowdown on the previous year.

“The Chinese luxury consumer recovery that the industry was hoping for has taken a pause . . . causing a setback in results, downward pressure on share prices and a lot of soul searching,” said Bernstein analyst Luca Solca.

LVMH, Kering and Hermès all flagged a marked deterioration in China in the third quarter at their results this month. Sales at LVMH’s bellwether fashion and leather goods division fell by a mid-teens percentage among Chinese clients globally, chief financial officer Cécile Cabanis said.

“The deceleration [in fashion and leather demand] is obviously largely driven by the Chinese clientele,” said Cabanis. “We hope it will subside. We are not sure when.”

The picture at Kering, which also owns Saint Laurent and Bottega Veneta, is worse still. Sales to Chinese consumers fell by between 15 and 20 per cent across the group in the third quarter, an acceleration from the mid-teens declines Kering reported in the preceding quarter.


The China chill has even begun to bite at Hermès, one of the most resilient luxury houses. Overall sales at the group’s ready-to-wear and accessories division fell 2 per cent globally, with chief financial officer Eric du Halgouët noting that a recent drop in the Chinese stock market, combined with a crackdown on offshore wealth, had made things tougher.

This week a policy came into force that will see Chinese authorities begin collecting a 20 per cent tax on dividends and interest earned from offshore trusts. Meanwhile the CSI 300 index, which tracks China’s 300 largest listed companies, has fallen 19 per cent over the past four months, a loss of more than $2tn in value, amid fears over weak domestic consumption and an AI bubble.

Nick Anderson, an analyst at Berenberg, said this week’s update from Hermès left him with “more questions than answers”.

“We fear that overexposure to China and a greater exposure to a more aspirational consumer than we previously thought will continue to weigh on Hermès’ revenues,” he added.

It wasn’t all bad news for luxury companies over the past few months. Sales of Birkins and other top-end bags at Hermès grew by 10.8 per cent, while jewellery brands including LVMH’s Tiffany and Kering’s Boucheron were in high demand, with both growing sales by double-digit percentages in the quarter.

But even demand in the US, which had been sustaining the industry earlier this year, has tempered in recent months as stock markets have cooled and gas prices have surged. Credit card data from Citi recorded luxury spending declines of at least 4 per cent in July, August and September.

Some labels have felt the slowdown more acutely than others. At one end is Hermès, which said its American shoppers were still spending at similar levels, and at the other is Kering, which is more exposed to aspirational middle-class shoppers. The Paris-listed group called out greater pressure on US consumers ahead of November’s midterm elections.

With little sign of an upturn in luxury’s most important markets, Bernstein’s Solca said that most luxury companies have “nothing better to do” than try to become more efficient as they wait for shoppers to return.

FT : Bolsonaro and Lula face off in knife-edge Brazil election Rightwing challen

Bolsonaro and Lula face off in knife-edge Brazil election
Rightwing challenger seeks to oust leftist president and bring Latin America’s largest country closer to Donald Trump

Brazilians decide on Sunday whether to re-elect President Luiz Inácio Lula da Silva or replace him with hard-right challenger Flávio Bolsonaro, in a high-stakes run-off vote that could reshape the country’s relationship with the US. 

Lula, the 80-year-old leftwing politician seeking a fourth non-consecutive term, trails his opponent narrowly in most polls, many within the margin of error, after losing to him in the first round earlier this month.

The 45-year-old senator Bolsonaro has pledged closer alignment with Donald Trump and vowed to free his father, former president Jair Bolsonaro, who is serving a lengthy sentence for plotting a coup.

The tiebreaker is a proxy rematch of four years ago, when the elder Bolsonaro lost to Lula in the country’s closest ever presidential race. The conservative patriarch was found guilty last year of conspiring to illegally remain in power after that defeat.

Brazil has emerged as a crucial battleground for Washington’s ambitions in Latin America, following a number of rightwing electoral victories across the region.

Bruna Santos, Brazil programme director at the Inter-American Dialogue, said a Bolsonaro victory would be a “political win” for the Trump administration, which has targeted Brasília with trade tariffs and other punitive measures since last year.

“The White House would gain another ideological partner in the region,” she added. “Lula offers continuity and repair, and Flávio offers a break with the system.”

A former metalworker and union leader during Brazil’s military dictatorship, Lula previously governed from 2003 to 2010 and achieved a sharp reduction in poverty. He was later jailed on corruption charges, but his convictions were subsequently overturned.

The leftist president promotes stronger ties with other so-called middle powers and the Brics group of developing nations.

Despite relatively low unemployment and solid economic growth under Lula, voters remain frustrated by the cost of living and crime. Bolsonaro has pledged to cut spending to bring down interest rates and take a tougher line against gangs.

Christopher Garman, managing director for the Americas at consultancy Eurasia Group, said “a sense of stagnation” explained Lula’s difficulties.

“The cost of capital has become suffocating and many families are heavily indebted. It is not that voters have become more ideological, but that Flávio has managed to ride some of this dissatisfaction.”

Bolsonaro beat Lula by 47 per cent to 45 per cent in an initial vote three weeks ago, spurring a financial market rally at the prospect of a more business-friendly government. Investors are concerned about Brazil’s large budget deficit and public borrowing.

No candidate who finished second in the first round has won a Brazilian presidential election since the return of democracy in 1985.

But Bolsonaro’s lead has narrowed in several recent polls as Lula has promised debt relief, free weekend public transport and financial aid for poorer students. Lula’s supporters warn that welfare benefits and public services are at risk under Bolsonaro, who insists he will protect social programmes.

Official figures last week showed Amazon deforestation had fallen to its lowest level since records began in 1988. But environmentalists warn that progress could be reversed under Bolsonaro, whose father presided over soaring destruction of the rainforest. Such a reversal could also jeopardise a free-trade deal with the EU, according to European lawmakers.

WSJ : U.S. Evacuates Mideast Outposts After Suspected Iranian Plot to Target Ame

U.S. Evacuates Mideast Outposts After Suspected Iranian Plot to Target Americans
The intelligence comes as the Trump administration prepares to restart military operations against Iran

  • U.S. intelligence suggests Iranian preparations to attack Americans in the Middle East have reached advanced stages, prompting personnel evacuations.
  • The State Department updated travel advisories for 13 Middle Eastern countries over concerns about Iran and the Houthis.
  • The intelligence follows preparations by the Trump administration to resume military strikes on Iran after the midterm elections.

WASHINGTON—U.S. intelligence suggests Iranian preparations to attack Americans throughout the Middle East have reached “advanced stages,” prompting a sudden exodus of personnel from embassies and military bases throughout the region, officials said.

Jay Clayton, the director of national intelligence, summarized that finding in a brief memo Friday to Secretary of State Marco Rubio.

“Iran has substantially increased efforts to target U.S. personnel. The lethal plotting efforts by the Iranians against U.S. citizens have reached advanced stages in both the Middle East and certain other countries,” he wrote.

The U.S. in recent days ordered the departure of diplomats and staff from the embassy in Saudi Arabia and other countries, initially citing threats from the Iran-backed Houthi militants in Yemen. The U.S. also has evacuated personnel from military bases across the region in preparation for renewed fighting, according to U.S. officials familiar with the planning.

A U.S. official said Friday that suspected Iranian terror plots targeting U.S. personnel informed the decision to order embassy staff from their posts. This month, the U.S. evacuated bomber aircraft from a base in the U.K. because of intelligence about an Iranian plot to attack aircraft and personnel, the Journal has reported.

The State Department on Friday updated its travel advisories for 13 Middle Eastern countries over concerns about Iran and the Houthis.

Tehran has long promised retaliation if the U.S. resumes attacks. “Last time you wanted to ‘finish the job’, Iran emerged even stronger. Want to try your luck again? Be our guest. But be careful; we have unfinished jobs too,” Iranian Foreign Minister Abbas Araghchi posted on social media in recent days.

U.S. officials confirmed the memo and the intelligence, which was reported earlier by Axios. Before the war began in February, Trump administration officials warned about the potential for Iran to strike American targets first, adding that it necessitated the U.S. to begin pre-emptive attacks on Iran alongside Israel.

The intelligence follows preparations by the Trump administration to resume strikes on Iran following the midterm elections, U.S. officials said. “We may do another little ‘Epic Fury,’” President Trump told a crowd on Friday at a rally in Florida, using the name for the U.S. military campaign against Iran.

Trump has threatened a significant escalation before only to pull back in favor of negotiations, tightening sanctions and continuing the blockade of Iranian trade in the Strait of Hormuz.

The president has been briefed on a series of options prepared by the Pentagon, officials said. The plans range from striking nuclear facilities and infrastructure, such as bridges, to conducting assaults on islands controlled by Iran, according to some of the officials.

Trump is leaning toward a return to major combat operations, the officials said, though no final decisions have been made. Critics say another flurry of missile attacks won’t compel Tehran to surrender its nuclear program but would raise global energy prices.

White House officials have previously said there would be no renewed operations against Iran before the Nov. 3 elections.

Two aircraft carrier strike groups are currently in the Middle East, with a third on the way from the Pacific. It is unclear how long all three will stay in the Middle East.

The Wall Street Journal recently observed a large shipment of standoff land attack missiles and bunker buster bombs arrive on the aircraft carrier USS George Washington in the Arabian Sea, a sign that the ship’s air wing is preparing for a much larger bombing campaign.

“We are always prepared,” said Capt. Nicholas DeLeo, commanding officer of USS George Washington. “We’re always paying attention, focused on our surroundings and ready to react reflexively or proactively.”

The U.S. is also bringing in another amphibious assault ship loaded with Marines, expanding Trump’s options to seize territory should he choose to do so.

When the additional carrier strike group and Marine expeditionary unit arrive in theater, the U.S. will have more than two dozen Navy ships operating in the Middle East, according to a Navy official.

The Pentagon said the military’s job is to develop and present options to the president.

FT : Israel central bank rejects Netanyahu’s plan to use crypto to evade sanctio

Israel central bank rejects Netanyahu’s plan to use crypto to evade sanctions
Critics say prime minister’s proposal would turn country into an economic pariah

Israel’s central bank and opposition politicians have lambasted Prime Minister Benjamin Netanyahu after he said he was looking into using cryptocurrencies to circumvent potential international financial sanctions on the country.

Netanyahu’s comments come amid mounting international outrage over the policies pursued by his far-right government in the occupied West Bank, with several of Israel’s traditional allies announcing plans to impose sanctions on goods from illegal Israeli settlements in the Palestinian territory.

In a blunt statement on Saturday, the central bank said cryptocurrencies “cannot serve as a means to circumvent sanctions imposed on Israel” and urged the country’s political leadership to take steps to defuse the mounting international pressure.

“The right course of action for the Israeli economy is to preserve economic relations with our primary trading partners and to focus on preventing sanctions and their negative impact on the economy,” the central bank said.

Opposition politicians also seized on Netanyahu’s comments — which he made four days before an election that many Israelis regard as the most important in their country’s history — warning that the prime minister’s proposal for bypassing sanctions would turn Israel into an economic pariah.

Netanyahu’s main challenger, Gadi Eisenkot, who heads the centrist Yashar party, accused the Israeli prime minister of “dismantling the Israeli economy”.

“Netanyahu has lost touch with reality,” Eisenkot wrote on X. “He has retreated into a world of delusions, proposing a ‘solution’ to the international isolation he himself created — by severing Israel from the global economy.”

Yair Lapid, from the centrist opposition grouping B’Yachad, said the idea of a “bypass economy” floated by Netanyahu belonged in countries like “Iran, Russia, Venezuela . . . whose banks are cut off from the world, whose companies can’t receive payments, whose young people are fleeing”.

“That’s his vision. It’s not [the vision] of our enemies — it’s Netanyahu’s,” Lapid wrote on X.

The spat comes as several countries, including traditional allies of Israel such as the UK, France, Canada, the Netherlands and Spain, have either imposed or pledged to impose sanctions in response to the relentless expansion of Israeli settlements in the West Bank — which are illegal under international law — and the refusal of the government to stop spiralling settler attacks on Palestinians.

In an interview with Israel’s Channel 10 on Friday, Netanyahu said that in light of the mounting pressure, Israel needed to “prepare ways to evade banking sanctions through an alternative economic system”. He added that this meant using cryptocurrencies and that he was “working on that too”.

He also warned that Israel would have to prepare for a less supportive US administration when President Donald Trump leaves office, adding that American funding for Israel’s military was likely to shrink as “America has changed”.

“It will end. It is only a matter of time,” Netanyahu said.

Eran Yashiv, professor of economics at Tel Aviv University, said Netanyahu’s remarks about using cryptocurrencies to bypass sanctions were “irresponsible”.

“The statement itself sent a signal that Israel’s leadership is unrestrained, lacks sound judgment, and is capable of extreme actions,” Yashiv said.

“To take an economy at 20th place in world GDP per capita rankings and place it alongside pariah states such as Venezuela, North Korea and Iran, while destroying its economy, is an inconceivable act.”

FT : Intelligence memo warns Iran is plotting to kill Americans in Middle East P

Intelligence memo warns Iran is plotting to kill Americans in Middle East
Plans against US citizens have reached ‘advanced stages’ as tensions rise in region, according to document

A US intelligence memo warns that Iran is stepping up efforts to kill Americans in the Middle East and beyond as tensions in the region rise.

Iran-backed Houthi militants have escalated their attacks on Saudi Arabia, while Tehran’s forces have expanded their strikes on commercial ships transiting the Strait of Hormuz. The region is also braced for the US military to potentially resume bombing Iran after midterm elections next month.

In a memo dated October 23 to Marco Rubio, the US secretary of state, director of national intelligence Jay Clayton wrote that “through various channels, we have received intelligence that Iran has substantially increased efforts to target US personnel”, according to a US official. Rubio is also President Donald Trump’s national security adviser.

“The lethal plotting efforts by the Iranians against US citizens have reached advanced stages in both the Middle East and certain other countries,” the memo continued.

Clayton also said that “it has become clear that certain intelligence and analysis regarding Iranian efforts to target US government officials in the Middle East and certain other areas are relevant to more individuals than are currently cleared to receive this information”.

The state department announced on Saturday that it had updated its travel advisory for the region “to reflect the threat of increased Iranian-supported Houthi regional aggression”. The advisories for 13 countries were updated on Friday.

The US state department ordered some personnel and their families to leave Saudi Arabia this week, citing increasing attacks from the Houthis, which have been hitting the kingdom’s oil infrastructure and civilian airports.

The US embassies in Lebanon, Jordan, the United Arab Emirates and Qatar “will see temporary changes to staffing levels” under their restricted operations status, though personnel have not been ordered to depart, according to a state department official.

A Saudi-led coalition said in the early hours of Saturday morning that its air defences had intercepted and destroyed a ballistic missile launched by the Houthis towards Riyadh.

Saudi’s civil defence authorities had issued alerts for the capital, Wadi Al-Dawasir and Najran before saying the danger had passed.

The US official suggested the new intelligence could lead to pulling more government employees from the region. “When it comes to our staffing at embassies, we constantly evaluate new information about the security environment,” the official said.

“The threat of Houthi attacks and of Iranian terror plots targeting US officials are informing our decisions on staffing adjustments for embassies” with reduced operations in the region.

News of Clayton’s memo was first reported by Axios.

Oil prices hit $117 a barrel on Friday for the first time since April on mounting fears of a fresh escalation in US President Donald Trump’s war on Iran and concerns over dwindling global oil inventories. Brent crude, the international benchmark, climbed as much as 3.8 per cent to $117.45 a barrel during afternoon trading in New York, later settling at $116.72.

Trump has said he might launch a new bombing campaign against the Islamic republic after the midterm elections on November 3. His Republican Party is trying to keep control of Congress amid the unpopular conflict, which has raised prices of petrol and goods for American consumers.

During a rally in Florida on Friday night, Trump told the crowd that the US could launch another military operation against Iran.

“We may do another little Epic Fury,” he said, referring to the Pentagon’s name for the war that Trump launched on Tehran in February alongside Israel.

Israeli Prime Minister Benjamin Netanyahu, who is facing a tough re-election battle on Tuesday, is also pushing to resume large-scale strikes on Iran.

US ambassador the UN Mike Waltz acknowledged to the FT this week that Washington could still be in a stalemate with Iran a year from now.

“One would hope that they’ll come to the table in a meaningful way before that,” he said.

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-US executives have resigned from a $25B Alaska liquefied natural gas venture amid allegations that Russia’s Novatek secretly financed and controlled the project without Washington’s approval. Former Polar Train LNG chief executives say the arrangement gave the Russian energy company influence over a strategically sensitive American infrastructure investment, raising questions about sanctions compliance and foreign control of US energy assets.
-Ukraine’s military says restrictions on Starlink satellite communications have been lifted, restoring a service critical to battlefield coordination and drone operations. The disruption underscored Kiev’s dependence on Elon Musk’s satellite network and the vulnerability of military communications infrastructure to decisions by private technology providers.
-Russia and Ukraine have agreed to a temporary ceasefire around the Russian-occupied town of Oleshky in southern Ukraine. The localized arrangement offers a limited respite from fighting but does not indicate progress toward a broader settlement.
-Hundreds of thousands of demonstrators marched across France for a second consecutive weekend, intensifying pressure on President Emmanuel Macron and the government. The protests coincide with worsening political instability, fiscal strains and growing doubts about the country's governability.
-Moody’s has refrained from downgrading France’s sovereign credit rating, offering Macron’s government some relief amid political turmoil and mounting debt concerns. The decision comes as French borrowing costs have reached 5% for the first time since 2002, highlighting the financial consequences of prolonged political uncertainty.
-A US intelligence memorandum warns that Iran is plotting to kill Americans in the Middle East, raising concerns about further escalation in the regional conflict. The warning adds to security pressures on US personnel and facilities as Washington confronts Tehran over its military activities.
-Pegasus spyware founder Shalev Hulio is urging governments to adopt his technology and reduce their dependence on American artificial intelligence systems. His argument reflects growing competition over sovereign technology capabilities, cybersecurity and the strategic risks of relying on foreign digital infrastructure.
-Anthropic has reached an agreement to launch a European consultancy, extending its commercial presence as businesses and governments accelerate adoption of artificial intelligence. The initiative comes amid European efforts to strengthen domestic technological capabilities and reduce dependence on American AI providers.
-Elon Musk’s proposed merger of Tesla and SpaceX would combine electric vehicles, satellite communications, space infrastructure and artificial intelligence in an unusually ambitious corporate consolidation. The strategy represents a major bet on AI-driven growth while raising questions about valuation, capital requirements and the financial exposure of Tesla shareholders.
-President Donald Trump is preparing to reduce tariffs on Canadian imports following pressure from Republican lawmakers, potentially easing tensions with Ottawa. The proposed adjustment suggests growing domestic political resistance to trade measures that have disrupted North American supply chains and increased costs for American businesses.
-Trump is moving to prevent certification of Alaska’s Senate election if the Republican candidate loses, raising concerns about federal interference in state election procedures. The confrontation could intensify disputes over electoral legitimacy ahead of the midterms.
-Chinese President Xi Jinping has convened senior Communist Party officials for discussions emphasizing discipline, reinforcing his focus on internal political control. The gathering comes as Beijing manages economic pressures, geopolitical tensions and the leadership challenges associated with implementing its long-term strategic priorities.

THE NEW YORK TIMES
-President Donald Trump’s Justice Department is intervening in the midterm elections with unprecedented deference to his political demands, including a challenge to Alaska’s Senate election procedures that legal experts consider dubious. The administration’s efforts to influence election administration have raised concerns about the independence of federal law enforcement and the possibility of contested results in closely fought races.
-Military review boards are rejecting Pentagon Secretary Pete Hegseth’s orders barring transgender personnel from serving, creating a confrontation between military administrative procedures and the administration’s personnel policies. The decisions expose legal and institutional obstacles to implementing the restrictions across the armed forces.
-Republicans are divided over an aggressive campaign advertisement by Vivek Ramaswamy targeting his Democratic opponent in Ohio, with some party members arguing that the attack crossed acceptable political boundaries. The controversy illustrates the risks of increasingly confrontational campaign tactics as Republicans defend competitive races ahead of the midterms.
-Democrats face a difficult path to winning control of the Senate despite favorable national polling, reflecting the geographic distribution of competitive races and the structural advantages enjoyed by Republicans in several states. The outcome could determine whether Trump retains congressional support for his legislative agenda during the remainder of his presidency.
-Former President Barack Obama has intensified his campaign attacks on Trump and Ramaswamy, seeking to mobilize Democratic voters in competitive midterm races. His intervention reflects the party’s efforts to convert dissatisfaction with the administration into electoral gains, particularly in states where turnout could determine control of Congress.
-A new poll of potential 2028 presidential candidates finds Vice President JD Vance and Secretary of State Marco Rubio prominent among Republicans, while Democrats remain divided among Kamala Harris, Gavin Newsom, Pete Buttigieg and Alexandria Ocasio-Cortez. Some 45% of prospective Democratic primary voters were undecided, compared with 26% of Republicans, underscoring the absence of a clear Democratic successor.
-The Trump administration is pressing Mexico to deliver a significant security achievement before the midterm elections, placing additional pressure on bilateral cooperation over organized crime and border enforcement. The effort reflects Washington’s desire to demonstrate progress on security and immigration issues that remain central to Republican campaigning.
-A New York Times investigation found that Trump temporarily exempted industrial facilities emitting cancer-causing pollutants from federal clean-air requirements, after which administration officials moved to weaken the underlying regulations. The measures could substantially reduce compliance obligations for affected industries while increasing public-health concerns in surrounding communities.
-The Trump administration is preparing a major expansion of border surveillance using advanced artificial-intelligence cameras capable of tracking individuals and activities in considerable detail. The existing system reportedly monitors more than 1M people, raising questions about privacy, oversight and the expanding use of automated surveillance in immigration enforcement.
-Flavio Bolsonaro, son of Brazil’s imprisoned former president Jair Bolsonaro, has emerged as a serious contender for the presidency as crime and public security dominate the election. His rise suggests the Bolsonaro political movement retains considerable electoral strength despite the former president’s conviction over an attempted coup.
-New York’s Catholic Archdiocese has agreed to settle sexual-abuse claims for more than $800M, marking a major financial commitment to resolving longstanding allegations against clergy and church personnel. The agreement underscores the continuing institutional and financial consequences of decades of abuse litigation for the Catholic Church.

NY POST
-Wall Street bankers are urging OpenAI and Anthropic to pursue initial public offerings before year-end, warning that market conditions could deteriorate as political uncertainty and concerns about AI valuations intensify. The pressure reflects a desire to capitalize on strong investor demand while financing requirements continue to rise, although both companies face questions about profitability, governance and the sustainability of their business models.
-Apple's new $2,000 foldable iPhone Duo has attracted favorable early reviews, but complaints about cracked screens are raising questions about the durability of its design. The launch marks Apple's entry into the foldable smartphone market, where high prices, manufacturing complexity and reliability remain significant obstacles to broader adoption.
-Instacart is exploring a potential sale and has reportedly held discussions with Uber and DoorDash. A transaction could accelerate consolidation in grocery delivery as companies seek greater scale, improved logistics efficiency and stronger positions in an increasingly competitive market.
Related: TSLA AAPL ANTHROPIC.IPO RAGSX CART OPENAI.IPO

>>> Barron's Weekend Summary: A potential Democratic takeover of Congress in the

Barron's Weekend Summary: A potential Democratic takeover of Congress in the midterm elections could reshape Wall Street's regulatory outlook

COVER
-A potential Democratic takeover of Congress in the midterm elections could reshape Wall Street's regulatory outlook, particularly for artificial intelligence, healthcare and other politically sensitive industries. Investors face the prospect of changes in congressional oversight, industry regulation and fiscal priorities, with the election potentially altering the operating environment for major corporations.

INTERVIEW
-Goldman Sachs pharmaceutical specialist Asad Haider sees investment opportunities in Johnson & Johnson, Eli Lilly and Merck despite rising interest rates and uncertainty surrounding the midterm elections. His outlook suggests that established drugmakers and selected biotechnology companies retain appeal even as financing costs and political scrutiny complicate the sector's investment prospects.

TECH TRADER
-The growing popularity of Meta Platforms' Muse artificial-intelligence technology could create a financial dilemma for the company as greater adoption increases computing and infrastructure requirements. The technology's commercial success may therefore intensify capital spending at a time when investors are increasingly concerned about the costs of developing and operating advanced AI systems.

THE TRADER
-Meta Platforms' Muse has emerged as a major AI success, but its expanding infrastructure requirements could have consequences for the broader stock market. The company's investment needs raise questions about how much additional spending investors will tolerate and whether AI-driven growth can generate returns sufficient to justify the industry's escalating capital commitments.
-The rally in consumer-staples stocks is obscuring underlying weaknesses at Hershey, whose fundamentals remain problematic despite renewed investor interest in defensive equities. The divergence between the sector's share-price performance and the company's business outlook raises concerns that investors seeking stability may be overlooking company-specific risks.

FEATURES
-Estée Lauder is attracting renewed investment interest as its restructuring begins to show results following a prolonged period of operational difficulties. Barron's argues that the cosmetics company's shares remain undervalued relative to its recovery prospects, suggesting that improvements in execution and profitability have yet to be fully reflected in the stock price.
-T-Mobile US, AT&T and other telecommunications operators face growing competitive pressure from Elon Musk's satellite communications ambitions, but Barron's identifies five telecom stocks positioned to withstand the challenge. The analysis also examines the investment appeal of SpaceX itself as satellite connectivity increasingly challenges conventional mobile-network business models.
- Options-based exchange-traded funds are attracting investors seeking income and protection against market volatility, but their complex strategies involve significant compromises. Some products limit participation in market gains while leaving investors exposed to losses, making their relatively high fees and underlying derivatives structures particularly important considerations.

EUROPE
- French multinational companies with substantial international operations are trading at valuations that Barron's considers attractive. Their global revenue exposure offers investors opportunities beyond France's domestic economy, while depressed share prices may reflect political and economic concerns that do not fully capture the strength of their overseas businesses.

COMMODITIES
-Melius Research recommends buying NextEra Energy, with a $100 price target, citing surging US electricity demand from AI data centers, electrification and industrial reshoring. The company plans 15 GW of additional generation capacity for large customers by 2035, with potential to reach 30 GW. Its combination of natural gas, nuclear and renewable power, alongside a proposed $66.8B acquisition of Dominion Energy, could support sustained earnings, cash-flow and dividend growth.

EMERGING MARKETS
-The Iran war is forcing Saudi Arabia to reconsider its investment strategy, while the United Arab Emirates appears better positioned to withstand the conflict's economic consequences. Barron's argues that the two Gulf economies entered the war with different financial and strategic advantages, leaving Riyadh under greater pressure to reassess its ambitious development and diversification plans. The disruption also raises questions about the future allocation of sovereign wealth capital, regional investment priorities and the Gulf's dependence on American security guarantees.

STREETWISE
- Netflix faces questions about its ability to maintain its competitive advantage as the economics of television and film production become increasingly challenging. Its performance offers a test of whether even the streaming industry's established leaders can sustain attractive returns amid intense competition, high content costs and changing audience preferences.

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The Information : Anthropic’s Margin is OpenAI’s Opportunity

Anthropic’s Margin is OpenAI’s Opportunity

The Takeaway
  • OpenAI offers deep discounts to lure Anthropic customers.
  • Companies like Replit, DataCamp, Rippling shift spending to OpenAI
  • Anthropic has retaken the lead among OpenRouter customers.

penAI’s efforts to undercut Anthropic on price are producing some results.

For instance, in May, Anthropic models powered 57% of the coding work of hundreds of engineers at Rippling, an HR software firm, while OpenAI models handled 16% of that work. Since then, the situation has reversed: 52% of the coding work is now handled by OpenAI models and 18% with Anthropic ones, as the company sought to cut costs and OpenAI proved cheaper, CEO Parker Conrad said.

“Anyone who is smart and sophisticated about this over the summer was trying to dramatically cut back from Anthropic and switch to other tools,” Conrad said, though he didn’t provide specifics.

Other sophisticated startups are making similar moves. Replit, a coding app, in recent months switched the majority of its AI spending to OpenAI from Anthropic after OpenAI offered a discount of more than 30% on its model prices as part of a contract worth more than $100 million annually, according to a person familiar with the situation. The startup had planned to stick with Anthropic, but Anthropic wouldn’t extend a discount it had previously provided to Replit unless the startup committed to a higher spending level, this person said. (Replit has publicly discussed shifting toward OpenAI but hasn’t disclosed the discount it is receiving nor the size of the contract.)

Investors will be looking closely at the impact of OpenAI and freely available open source models on Anthropic’s growth rate as it prepares for a blockbuster initial public offering as soon as next month. That rate slowed materially between the second and third quarters, though it was still extraordinarily high, at 45%. Another potential growth factor: Some of Anthropic’s biggest customers, including Cognition, Meta and Microsoft, are developing their own technologies and other alternatives to reduce spending on Claude.

In recent months, OpenAI appears to have drawn some customers from Anthropic by offering heavy discounts and other freebies for both its coding tool, Codex, and models that businesses can buy using application programming interfaces. The moves came after Anthropic, based on the strength of its models for coding, leapfrogged OpenAI in revenue during the second quarter and was about 50% bigger in terms of revenue over the summer.

OpenAI has said its enterprise revenue growth accelerated in recent months, though reliable data are hard to come by. Data from corporate spending software provider Ramp, which is used by many startups, shows Anthropic adoption surged in the second quarter and overtook OpenAI, as a percentage of Ramp customers, and the two are now neck and neck.

Higher Margins

Just as important as market share, Anthropic’s pricing power means it has had high gross profit margins compared to OpenAI. Anthropic spent just $5.6 billion on computing costs in the second quarter, including costs to develop new models, less than half the $11.5 billion in revenue it generated, The Information previously reported. Meanwhile, OpenAI previously projected it would spend significantly more on compute costs than the revenue it expects to generate this year. That means OpenAI’s discounts may be buying market share at the expense of already-negative margins.

Anthropic has continued to operate as if it isn’t threatened. While both Anthropic and archrival OpenAI provide discounts to customers that spend millions of dollars a year on their products, Anthropic has taken the unusual step of ending customers’ discounts once they hit usage limits in their contracts, The Information has reported. That policy appears to have cost Anthropic Replit’s business.

That has opened the door for OpenAI, which in recent months launched new models that were more competitive with Anthropic’s than its prior ones, many app developers say. Heavy users of such models say it’s a relative cinch to switch providers.

For instance, Replit took mere hours to make code changes to switch to OpenAI models from Anthropic’s, and just a few days to make the changes to its products, a faster turnaround than the time it took Replit to negotiate the earlier Anthropic contract, said the person with knowledge of the situation.

Anthropic Strikes Back

This dynamic also means Anthropic could win back some of the business it lost if it launches better models.

“We’re looking at an 80% to 90% decrease in costs,” Cornelissen said. “It’s huge.”

That may have already occurred. A month ago, OpenAI overtook Anthropic to become the most-used model provider to customers of OpenRouter, a service that businesses use to access different models through a single vendor. But after Anthropic launched its Claude Opus 5.5 model late last month, it retook the lead and was twice as popular as OpenAI models over the last week or so, OpenRouter said. (Anthropic is now preparing to release a model that reads users’ intentions better, while OpenAI is scrambling to release a powerful new flagship model without taking too many safety and security risks.)

In some cases, OpenAI is taking small bites of the budgets of loyal Anthropic customers. Vijay Rayapati, the CEO of Atomicwork, which automates IT support tickets, said his company has begun training new engineers to use Codex rather than Claude Code because of free credits it has received from both OpenAI and from its venture capital firm. That VC firm, Khosla Ventures, is a major OpenAI investor that offers such credits to startups in its investment portfolio, according to a person familiar with the situation.

While Atomicwork plans to spend around $2 million on Claude Code in the current fiscal year that ends January next year, Rayapati anticipates the startup will spend nearly $300,000 on Codex in the same period, compared to spending almost nothing on that product in the prior year.

OpenAI has been more available to help some customers use Codex effectively, some founders say. For example, one startup backed by Andreessen Horowitz, which has invested in OpenAI, says they are in a Slack group chat with OpenAI engineers and salespeople to help resolve issues with the coding tool when they arise. Anthropic did not make engineers available to the startup in a similar group message with sales reps from that company.

Huge Discounts

OpenAI recently has floated discounts higher than the 20% to 30% that some founders said they received on listed prices for its models. For example, Jonathan Cornelissen, CEO of workforce training firm DataCamp, which has about 200 employees and is a big spender on Anthropic models, says OpenAI has offered 40% off models that DataCamp uses internally to develop products. To get the discount, the startup must agree to also use Codex rather than a competing tool like OpenCode or Claude Code.

While weighing that offer, DataCamp is also negotiating to apply the same discount to OpenAI models—which are cheaper than Anthropic’s, before the discount—that power an application the startup sells to its customers, he said. Such a change would result in “significant” savings and higher gross margins, he said.

“We’re looking at an 80% to 90% decrease in costs,” Cornelissen said. “It’s huge.”

OpenAI is also trying to keep existing customers from looking at Claude. For instance, it recently allowed an American bank that has more than $7 billion in assets to double its ChatGPT accounts to 500 workers, without raising the annual contract cost of around $40,000, according to an executive at that firm. (That would amount to less than $7 per month per worker, an extraordinary discount from the typical price of more than $20 per month per worker.)

The firm’s marketing teams use ChatGPT to generate ads and its HR staffers use it to create job descriptions for new roles, but it was starting to consider switching some of that work to Claude before OpenAI sweetened its contract, the executive said.