Indirect bidders, a group that includes foreign central banks, took about 80% of Wednesday's 10-year sale. The Fed's minutes listed AI borrowing among the reasons long yields rose. And the Russell 2000 slid to within about 1.3% of a correction.
The 10-Year Sold Well. Rate-Sensitive Stocks Sold Off.
The S&P 500 slipped about 0.2% Wednesday to 7,801.77, a day after its first close above 7,800. The Dow lost 341 points.
The 10-year yield hit its highest since 2002 before Treasury sold $39 billion of 10-year notes. It eased to about 5.28% after a strong sale. The 30-year rose as high as about 5.73% early, its highest since May 2002.
The Fed's September minutes said most officials expect another rate increase by year-end. They did not specify which one.
Oil jumped early after the Houthis said they attacked Saudi targets, then gave back the gain. Bitcoin slid to about $83,300 by mid-afternoon.
Investor Signal
The sale showed that buyers will take 10-year debt at 5.3%. The cost of that yield landed elsewhere. Small caps and transports, which are more exposed to fuel and borrowing costs, fell harder than the index. Thursday's $22 billion 30-year sale tests whether demand reaches the longest bonds.
Your Mortgage Rate, Your Car Loan, Your Savings — All Rest on One Assumption.
That the world keeps buying American debt.
They stopped.
China held $1.32 trillion in U.S. Treasuries at the peak. Today: $659 billion. An 18-year low.
That money went into gold.
Beijing's central bank has bought gold 20 months straight — its longest streak in a decade. Goldman Sachs put China's real buying at 4.8 times the official figure.
And the European Central Bank just confirmed what hasn't been true in generations: gold has overtaken U.S. Treasury bonds as the world's #1 reserve asset. 27% gold. 22% our debt.
The world's most conservative money isn't hedging the dollar. It's leaving it.
When foreign buyers stop absorbing our bonds, rates rise, the interest bill eats the budget — and you feel it at the pump and the grocery store.
Washington's counterattack is already signed, funded, and filed — with one small American gold company at the center of it.
Buyers Took 80% of the 10-Year Sale. The Minutes Named AI Borrowing as a Yield Factor.
Indirect bidders took 80.3% of the 10-year notes, above a 10-auction average of 72.4%, CNBC reported. That group includes foreign central banks. Dealers, who absorb whatever others leave, took 2.5%, against a 9.4% average.
The notes still sold at 5.3%, the highest auction yield since 2000. "The 24-year highs in rates brought out the buyers," said Peter Boockvar of The Boock Report.
The minutes landed the same afternoon. Most officials judged that another increase "would likely be appropriate by year end." A few cited "increased expectations for AI-related borrowing" among the factors behind higher long-term yields. Fed staff noted that spreads on hyperscaler debt stayed wide, given heavy issuance.
SpaceX (SPCX) is in early talks to raise about $40 billion for Nvidia chips, with Apollo (APO) expected to lead. Société Générale listed the plan among the factors weighing on Treasuries Wednesday morning.
Kalshi's October hike contract held at 17 cents after the minutes. Futures priced about 18% for October and about 85% by December.
Investor Signal
Dealers took about 11% of Tuesday's three-year sale and 2.5% of Wednesday's 10-year, so end buyers took nearly all of it. That pushes back on Ray Dalio's warning this week that foreign buyers are pulling back, though indirect bids also include domestic funds. The minutes show officials watching a second big borrower beside Washington. Final terms on SpaceX's deal would show what lenders charge for AI credit with Treasuries at 5.3%.
The S&P Barely Fell. Small Caps Neared a Correction, and Transports a Bear Market.
The Russell 2000 fell about 1.2% to near 2,798 by mid-afternoon. That left it about 1.3% above 2,761.58, the line that marks a correction.
Every stock in the Dow Jones Transportation Average fell in the morning. By early afternoon the average sat about 2.3% above bear-market territory.
Across exchanges, 506 stocks set 52-week lows and 48 set highs. Caterpillar (CAT) fell about 6%.
Natixis' Garrett Melson ties the pattern to the 10-year's climb from about 4% in early March. "Under the surface, you are seeing exactly what you'd expect to see," he said.
Investor Signal
The index held near its record because its largest stocks held. The companies most exposed to fuel and borrowing costs did not. The Cboe Volatility Index sat near 15.1, so options traders didn't pay up for protection. A Russell 2000 close at or below 2,761.58 would mark a correction.
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Black Hills Will Build $1.8 Billion of Gas Plants for Google. It Hasn't Said How It Will Pay.
Black Hills (BKH) signed contracts through 2048 to power a Google data center planned for Cheyenne, Wyo. Its shares rose about 8.8%, adding about $470 million of market value.
The utility will put $1.8 billion into 564 megawatts of gas-fired units from 2027 to 2029, with service starting in late 2027. Google (GOOGL) has advanced $399 million so Black Hills can order long-lead equipment.
Black Hills expects about $150 million of net income from the project in 2030, about 8.3% of the capital spent. The build equals about a third of its market value before Wednesday's gain.
Investor Signal
The financing is still open. Black Hills plans to use project cash flow, debt and "other financing alternatives" while keeping investment-grade ratings. New shares would dilute the per-share benefit, and debt would add leverage with long yields near two-decade highs. It is a small example of the AI-related borrowing the minutes flagged.
Barings Filled Less Than Half of Its Redemption Requests for a Third Straight Quarter
Investors asked to redeem about 10.68% of Barings Private Credit Corp.'s shares in the third quarter. The fund caps quarterly repurchases at 5%, so it filled about 46.84% of each request.
The first quarter's fill rate was about 44.3%, and the second's about 46.01%. In December 2025, the fund met every request in full, when about 3.8% of shares were tendered.
A secondary auction, run by Nasdaq Fund Secondaries and LODAS Markets, sold 91% of the interval-fund shares offered. Some trades cleared at a 15% discount to net asset value.
Investor Signal
Redemption requests measure sentiment, not losses, and holders who expect to be prorated tend to ask for more than they need. Still, demand at roughly double the cap is a sharp change from full payouts at the end of 2025. The 15% secondary discount shows what leaving early costs. The fourth-quarter tender will show whether requests settle near 10% or keep rising.
He predicted the 2008 financial crisis…
He predicted Trump’s election in 2016….
He even predicted the rise of COVID-19 writing:
“The chance we don’t have something on the scale of a national pandemic in the next few years is near zero”
That was three months before the first reported case.
If he’s right again, God Bless America…
Because this crisis will be tectonic in scale…and it's going to begin with the bubble popping in AI.
Constellation Beat Forecasts but Held Its Outlook. Beer Demand Slipped.
Constellation Brands (STZ) earned an adjusted $3.74 a share, against a $3.55 forecast. Net sales rose 6% to $2.633 billion, above the $2.539 billion expected.
Beer shipments rose 5.5%, but depletions, what distributors sell on to retailers, slipped 0.6%. The gap suggests distributors restocked. The beer operating margin narrowed 160 basis points to 39.0%.
The shares fell more than 4% before the open, then rose about 2% by mid-afternoon.
Investor Signal
Holding the full-year range after a beat implies a softer second half. The beer margin target of 37% to 38% for the year points the same way after a 39.0% quarter. September depletions will show whether the quarter borrowed from future ones. PepsiCo's results Thursday give another read on staples demand.
Buyers took the ten-year in size and left dealers with almost nothing. The minutes kept a year-end hike in play and named AI borrowing among the forces on long yields. Small caps and transports slid toward key thresholds while the index barely moved. A utility agreed to build for Google before settling how to pay.
Treasuries found demand at a yield that Fed policy and heavy borrowing keep high. The cost is showing up first in the parts of the market most exposed to borrowing.
3 STOCKS OUR SIGNAL ENGINE SAYS TO WATCH CAREFULLY
Three stocks. Three signals. Two weeks later, the story changed.
On September 2, we published three market questions around KLAC, HPE and PG&E.
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One company delivered record revenue and raised its outlook.
Another saw weakness spread across its entire peer group.
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