The bull market turns four today. The S&P 500 is up more than 110% from its 2022 low. The 10-year yield sits near the highest level of the entire run.
Those two facts rarely share a chart for long. Profits have kept pace, and much of that profit comes from the AI buildout.
Here is the catch. More of that buildout now runs on borrowed money. Some Fed officials have flagged it as one possible reason bond yields rose.
The cash bond market is closed today. Tomorrow, the banks that help arrange that debt start reporting.
3 MOVERS IN 3 MINUTES
- Diesel stayed lower after the ceasefire post. Crude didn't.
President Trump announced a Russia-Ukraine "energy ceasefire" on Sunday. Kyiv said it would agree if Moscow did, then reported Russian strikes on two power plants. The Kremlin says talks continue but won't confirm the scope.
Brent dipped more than 2% Sunday night, then climbed back to about $106. U.S. diesel futures are still about 1% lower.
The split may show where the risk sits. Diesel also had Friday's Russian supply deal and a weekend IEA push for faster releases behind it. Crude is pricing the Gulf, where a tanker was struck off Oman, outside Hormuz. Crude still carries a risk premium Goldman Sachs puts at just over $20.
2. The carriers lost twice what SpaceX gained.
SpaceX agreed to buy nationwide 800 MHz airwaves, the same licenses T-Mobile sold to a private firm in August. The price is near $8 billion, The Wall Street Journal reported.
On Friday, T-Mobile fell 13%. AT&T and Verizon lost about 9% to 10% after dividends. By Friday's close, the three had shed about $58 billion, and SpaceX had added about $26 billion.
Tower owners jumped, led by Crown Castle at 16%. Investors appear to be pricing a fourth carrier with no announced ground network or pricing yet. The deal still needs FCC approval.
3. Amazon wants the software that makes AI chips interchangeable.
Amazon is in talks to buy AI startup Decart for about $7 billion, The Wall Street Journal reported. Neither side has confirmed a deal. Decart was valued near $4 billion in May. Anthropic explored a deal near $6 billion, then walked away, Bloomberg reported.
Decart's software lets developers move work between AI chips. Amazon designs its own, so it may be buying the off-ramp from Nvidia. A 75% markup in five months suggests scarce AI assets now price on strategy, not proof.
3 SIGNALS FOR TODAY
12:50 p.m. ET: Cleveland Fed President Beth Hammack speaks. She recently said rates are not yet high enough. Futures put the odds of a hold this month near 81%, and Kalshi's October-hike contract sits at 15 cents. A firm call for October would test both, two days before CPI.
Evernorth's XRP treasury is set to start trading on Nasdaq as XRPN. Holders of about 80% of eligible SPAC shares took their cash, and XRP is down about 40% since signing. After a week of crypto fund outflows, it tests demand for crypto wrappers.
Memory chips at the open. Micron is indicated more than 2% lower after Korea's Kospi fell 3.65%. Seoul was shut Friday, so some of that is catch-up. If U.S. chipmakers slide anyway, memory pricing power becomes the question before TSMC reports Thursday.
Under all of it sits one question: what does it cost to keep this rally funded?
Investing In The Titans of AI
Carnegie didn't invent steel. He used new technology to produce it cheaper and faster than anyone on Earth.
Rockefeller didn't discover oil. He used industrial machinery to refine it more efficiently.
Vanderbilt didn't build the railroad. He understood that whoever controlled the infrastructure controlled the economy.
Their combined fortunes were between $700 billion and $1 trillion.
Best-selling financial author Alexander Green has identified three companies positioned to be the Titans of the AI age.
The Sip
The Bull Market Turns Four. The Bill Is Getting Bigger.
Bull markets usually stall when money gets expensive. This one turns four with the 10-year yield near 5.24%, close to its highest since 2002.
Stocks have climbed for about 1,000 trading days. The Fed raised rates in September for the first time since 2023. The rally kept going anyway.
Profits kept pace
Analysts expect S&P 500 profits to rise 29.6% from a year ago. That would be a third straight quarter above 25%, according to FactSet, driven largely by AI data-center spending.
That is the bull case. Profits can absorb a 5% discount rate if they grow this fast.
The loop underneath
The spending behind those profits leans harder on debt. Broadcom is in early talks to arrange more than $50 billion for the chip it is building for OpenAI, the Journal reported. Oracle is in talks on a vehicle that would buy chips and lease them to Oracle. SpaceX is in early talks to raise about $40 billion, with Apollo expected to lead.
That debt gets sold into the same bond market. In the Fed's September minutes, a few officials cited "increased expectations for AI-related borrowing" as a possible reason long yields rose.
You’re Being LIED To About The Iran War
Forget EVERYTHING you’ve heard about the Iran war.
Especially the reasons why we’re bombing the country.
So AI spending lifts the profits that justify stock prices. AI borrowing may be lifting the yields those profits must beat.
How thin the cushion is
Thursday showed it. OpenAI told investors its September run rate was near $50 billion, the Financial Times reported. Other reports had it near $70 billion. Oracle lost about $23 billion of value that day, then won back most of it Friday.
Since then, Broadcom CEO Hock Tan said capital "might be the biggest constraint" on the AI buildout. Neither moment questioned AI demand. Both were about money.
Banks sit in the middle
JPMorgan, Goldman Sachs, Wells Fargo and Citigroup report before Tuesday's open. Banks help arrange the AI debt. They also pay rising deposit costs and hold the loans 5% rates squeeze first.
Watch loan-loss provisions. Rising reserves would say long rates are hurting borrowers outside the AI boom. Wednesday's CPI follows, with core prices expected up 0.2%.
While AI profits outgrow the cost of funding them, 5% yields are a tax, not a verdict. If financing gets pricier or bank credit cracks, stocks lose the cushion that let them ignore bonds.
AI CEO Issues Code Red: Prepare for Meltdown
The CEO of this AI company (click here to get the name, 100% free) just issued a CODE RED in an internal memo…
Warning his employees that they’re dealing with a critical situation.
Another company executive even implied they might need a government bailout.
And now Jim Rickards is predicting this company is about to go bust, in a full-blown AI meltdown that could be 10 times bigger than Lehman Brothers.
The MarketSips Takeaway
Year five rests on one gap: AI profit growth against the cost of money.
The thesis holds if banks show steady provisions, core CPI lands near 0.2%, and the Broadcom and Oracle deals close on terms lenders accept. It breaks if reserves climb, AI debt has to pay up, or inflation runs hot.
Oracle and Broadcom need the money. Apollo is being asked to supply it.
This rally never needed cheap money. It needs profits that outrun expensive money.
UNTIL THEN, SIP SLOWLY!
The Market Sip Desk
REPLY PROMPT: Is AI spending still this bull market's engine, or has its borrowing become the biggest risk? Hit reply and tell us.
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.
Two weeks later, every one of them produced new evidence.
One company delivered record revenue and raised its outlook.
Another saw weakness spread across its entire peer group.
And in the third, a market risk that had only been showing up beneath the surface suddenly became explicit.
Yet none of these stories is finished.
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3 Stocks at a Major Turning Point
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