Relief on a softer headline. I'm Dani Burger, "Open Interest" starts right now.
Micron faces an earnings test. President Trump strikes an AI accord, as OpenAI chases a $1.4 trillion valuation. Apple is finally ready to enter its next big category, the smart home. The stocks you are watching this morning: Micron will kick off this earnings season. J.P. Morgan unofficially kicks things off, but Micron up 1.3%, the latest test for the AI trade. Investors looking for any reassurance that the long-term outlook for demand remains great despite heavy spending on AI growth. We will have tough comparables, that's why the price has flatlined. To begin with the eco-data from half an hour ago: core PCE came in cooler than expected, reinforcing bets that the Fed will refrain from raising rates in October, also signaled by Waller yesterday. Let's break it down with Michael McKee, Bloomberg's international economics and policy correspondent. What did we get from the data?
As Columbo would say, I wouldn't be so sure about that, in terms of what the Fed might do. The data shows a strong economy that is picking up momentum at the same time that inflation hasn't really changed. There were methodological changes to the PCE numbers, and that has affected what they come out as, but it doesn't affect the overall narrative. We started with ADP, 90,000 jobs created according to them in the month of August. That is a fairly strong jobs creation number. We will see what happens on Friday. The inflation numbers, PCE and PCE year-over-year, are the headline numbers the Fed concentrates on in terms of its 2% mandate. I put in two numbers for the month-over-month and year-over-year previous, because what they did was revise those numbers lower. The previous PCE year-over-year, 3.7%, knocked down to 3.4%, but that didn't change in the month of August. Still 3.4%. The core I didn't have on the list, but it is still at 3%, so you have both over 3%, telling you there is still inflation. Look at the spending number: the strongest consumer spending in about a year, up 0.9% after a 0.1% rise in July. The economy is getting stronger, doing a little bit better. And that's got to worry the Fed. It continues the narrative that there is still inflation pressures out there.
What were the PCE revisions?
We want to let everyone know that there are three sets of revisions from 2021 to today: the new seasonal adjustment factors, new data on services prices, and methodological revisions, particularly to legal services, computer software, and portfolio management, all of which showed a slight decline during the month. But overall services inflation is still rising according to PCE. The script hasn't changed, even if the headline numbers, the topline numbers, change a little bit.
Is the script starting to change for Fed officials? What did you make of Waller saying one more rate hike is appropriate, just one more, and there is no need for urgency?
I think it is interesting because he had been saying we didn't need to raise rates, now he sees a reason to. So he is one of the more cautious Fed officials, because he is saying that there should be one more by the end of the year. That is setting up the other hawks to maybe one or two by the end of the year. The important thing about Waller, since he is the vice chair of the Open Markets Committee, they never really have, for decades, voted against the chair. We don't know what Kevin Warsh is thinking, but we do get an awful lot of other Fed speak today, tomorrow, and Friday, and we will see what the hawks have to say about this and try to take a read by Friday of where we are.
So much Fed speak to get through. That is Bloomberg's Michael McKee in Washington, D.C. Washington plans to make its push into the smart home market on October 13 with a hub at the center of the strategy. Let's get details with Bloomberg Tech host Ed Ludlow. How much of this is surrounding the new boss at Apple who has his hardware background?
Another big report because it doesn't have exclusive details of the product. Apple is finally pushing into the smart home market. But we have a date and a timeline, which is October 12th, the week of October 13, to launch the smart home hub. This isn't going to be a massive category for Apple, but what is interesting is if you look at the field, something the audience might be familiar with is Amazon Echo's devices. The software side has been underwhelming. With Apple pushing deeper into the smart home for the first time since 2022, having a TV box that is updated, that is the modus operandi by which Apple is starting to think about how the consumer interacts with the revamped Siri AI in the home. Another one for him that moves the needle, but read the reports because the specs are super interesting. I have a load of Alexa-enabled devices in my home, but in the conversation it goes beyond, 'Hey, what is the weather today?' Right now, with voice-based AI being so far ahead of that, Apple's move is interesting.
Or to play whatever song you are in the mood for. You have been at Dev Day with OpenAI. With Sam Altman, the idea that he is okay with the pace of an IPO. How much does that underscore the need for funding, because they don't have the source of public market funding in the immediate future?
What happened completely independent of what was happening at Dev Day, as we broke the story of a $1.4 trillion valuation. This is investors kicking down the door of OpenAI saying, 'We want to do this, there is a market for OpenAI to raise.' The equation for Sam Altman is, look, they are zeroed in on safety right now. The IPO will happen, but when you become a newly public company, the safety goals are harder. In the meantime, all of this is linked by what OpenAI feels is its massive momentum and its business segment. This is how Sam Altman described it.
It is a very steep growth period for us. People love our models. We have been able to make new products and tools for developers, enterprises. ChatGPT is growing across the board: consumers, developers. All of the stuff we are watching at Dev Day, we do see a lot of business.
Sam actually pushed back against me pretty hard on something I said. Being a public company, is that incompatible with safety and alignment goals? He said, not incompatible. Being a newly public company, when you go through the process of prepping to go public, all of the internal audits, etc., having both of those processes in parallel is the difficult bit. But it sounds like investors are supportive of keeping OpenAI private.
I will ask you to join Bloomberg Deals at noon Eastern to talk more about this. Ed Ludlow in L.A. for Bloomberg Screen Time, beginning tonight at 9:00 p.m. New York time, including interviews with Ted Sarandos and Ben Affleck. Joining us is the HSBC chief multi-asset strategist, Max Kettner. The other big New York theme, the other tech theme we are working through is the start of earnings season with Micron, given there have been shades of patching us with the AI trade. Is this a catalyst? Do we need earnings to see clear leadership?
We do. When you look at the earnings expectations, you are seeing earnings expectations are very low. Q2, the earnings weren't that strong because we have the markup of OpenAI and Anthropic holdings. That is ignoring we had a historic earnings beat, the best earnings season in history, and that was not just driven by one-off markups of two or three companies. Number two, when you look at what has happened around now, the sequential earnings expectations, it's not like analysts are sitting there like, 'We are going to treat these non-recurring, one-off items as recurring.' That means Q3 and Q4 it is going to come again. Then you can be concerned about earnings. But that's not what has happened. You are seeing seven of the 11 sectors in the S&P expected to drop earnings quarter over quarter. That is probably above an 8% nominal GDP environment in Q3. That just makes no sense. I think probably the earnings season will be the next catalyst. There is a question of if that will come in October already, or if investors will be sitting there saying, 'You know what, let's not do October, let's wait until after midterms.' We are sort of chopping around the next three or four weeks even though we have good earnings. Let's assume Micron, good earnings, but you will still chop around because of seasonality, maybe you have concerns around midterms come around, the Democratic clean sweep and all this. Maybe it takes four or five weeks until people say, 'Hold on, I should be bidding this up.'
We're not going to get into that yet, we will in a second. Next, you are sticking with the show. Max Kettner of HSBC. As stocks move higher thanks to a better-than-expected or slightly on-the-margin expected PCE data. Elsewhere, this morning, we are seeing Brent crude climbing, even though we've had this report from the sell side saying that the amount of Hormuz generally that we are getting out is 98% of what it was before the war. We still have an issue around supply, specifically with product. Diesel markets are still a problem, too. 10-year yields are coming down about 1.5 basis points after PCE. A reminder, the headline number for August coming in at 3%. The expectation was for 3.3%. Michael McKee was breaking down some of the oddities in that, the change in methodology and a still-elevated level, even the market taking that down 1.5%. The other top story we are monitoring: billionaire Ken Griffin is making a historic gift to higher education, donating $3 billion to Carnegie Mellon. Let's get to Lisa Abramowicz in Pittsburgh. Lisa?
I want to welcome everyone from Bloomberg Television and Radio. I am here in Pittsburgh at Carnegie Mellon University with Ken Griffin, the founder of Citadel, along with the president of CMU, who joins us after this record $3 billion donation investment in CMU. How did you choose CMU, and why did you decide to double your total investment in terms of a gift in CMU?
You picked the right choice of words. This is an investment in excellence. Carnegie Mellon University leads the nation in computer science and artificial intelligence and cybersecurity. World-renowned program in robotics. This is the university that represents the future of our country. It is a privilege to support the momentum at Carnegie Mellon University, the team at Carnegie Mellon, and the unbelievable faculty and students.
In the press release you talk about this new campus you are creating in Miami. A significant part of this $3 billion will go there, as a pioneering new model for higher education. What does that look like? What is this going to be?
First, it is good to be with you. CMU, when you think about our history, Carnegie Mellon was founded by Andrew Carnegie in the early 1900s to serve sons and daughters of the working class. And this has been in our DNA all along. Whenever there are massive societal and technological changes, CMU steps up. We make big, bold bets. This is one of those. I think, given the changes we see in technology as it advances, changes in AI, there is no question every sector of our economy is being transformed. No question scientific discovery is being accelerated. As a result, our national security, economic competitiveness, depends on how we educate the next generation, how we prepare them, and also how we accelerate discovery and impact that we have.
Everyone has a story about knowing someone whose kid just graduated from college, spent half a million dollars, maybe liberal arts or something more concrete, can't get a job, has to pay back the debt, doesn't know how. What kinds of skills are not being taught currently at the university as a major employer that you see?
Let me first talk about where things are going right. U.S. News reported upping the ranking system to include how are students doing several years post-graduation. That ranking placed Carnegie Mellon University number three in the country on return on investment on the college education. CMU, number 14 overall in the United States, is one of the greatest institutions of higher learning in our country. We need to learn from our success stories and play to our success stories rather than whine about the universities that are delivering value for their students. My investment here, as I said, is an investment in excellence. To me, excellence is creating the students that will lead our country in the future, will solve our most pressing problems, will build big things, and do so with urgency. If you look at the economic prospects of the students who graduate from CMU, they are outstanding. This is what a university should deliver. And I hope this gift catalyzes discussions across the country, boards of trustees, and in the C-suites of colleges and universities, to focus on what best practices do we need to bring into our four walls that we see at Carnegie Mellon, that we see at MIT, that we see at Stanford, that will drive the success of our students and the prosperity of our country.
Let me build on that. You asked earlier what this new model for education will look like. We are not talking about colleges and schools. We are talking about grand challenges, the big challenges, like human health and national security, cybersecurity and innovation, energy and climate resilience. Organizing the campus around those, bringing our learning and research to bear, not in the context of disciplinary silos, but bringing people together to address these grand challenges. This is the vision for the future. You asked what we teach our students. We need to teach them foundations. We also need to teach them inherent human skills: critical thinking, problem solving. These students will change the world. They need to not only have knowledge and skills that are technical and scientific, but also human skills that will serve them well as we shape the future.
If you look out the window in Pittsburgh, one of the great industrial success stories in America, Pittsburgh is being re-created at Carnegie Mellon University, leading the way for the re-industrialization of the United States of America. It has been driven by the students and faculty and resources of Carnegie Mellon University.
This is your biggest gift ever, $3 billion. It breaks records when it comes to a single gift to a single institution. You're also focused on building out the Miami branch, and you're talking about your efforts to create Miami as a world-class city. Is this going to be your focus? Is there more to come with this, or is it really CMU you are putting your focus on to see what kind of results you can get?
I like to think I have decades ahead of me to explore the question more fully, but the magnitude of the gift represents the magnitude of the aspiration. I truly believe that just as Carnegie Mellon University is transforming Pittsburgh, a renaissance for the 21st century, CMU Miami will transform Miami, bringing hundreds of technology companies, startups, career opportunities, and futures that impact the people of Miami and the greater prosperity of our nation.
I wonder if this means that going forward the new model of education needs to be something where technically driven with respect to skills that are applicable in the real world, where there is the classic concept of the Ivy League well-rounded human does not have a place for $500,000 or $400,000 in the world we live in today?
We need well-rounded humans more than ever before. Think about advances in technology. Think about the impact on society. We need to train engineers and scientists to understand the implications of those advances, the implications of that on society, on communities, and be able to navigate it. Not only do we need to give them technical knowledge and scientific knowledge, we also need to give them problem-solving skills, communication skills, ethical applications of the technologies they develop. This is part of the reason when we talk about these grand societal challenge areas, we want to bring interdisciplinary people to work together, and this is the wave of the future.
I think that interdisciplinary point is important. I had the benefit of a liberal arts degree and a strong background in computer science. It has been defining to my life. Carnegie Mellon has an incredible history in the humanities. There are almost 70 Tony Award winners from Carnegie Mellon's alumni. The first school of drama in the United States.
And Andy Warhol went to school here.
That is amazing. I do wonder, going forward, you had scathing comments about universities a couple of years ago when you were talking about where you disagree with some of their approach. Do you think things have gotten better since 2024?
Things have improved over the course of the last two years across American campuses. Let's use the word pointed. We lost the narrative. The point of higher education is to educate our young men and women to lead our country, to run businesses, to create new products, to entertain us, to actually enter the workforce and have tangible skills in solving problems. We lost that narrative to a variety of other issues that do not truly matter, that do not truly matter to the future prosperity and well-being of our country.
You feel like it is coming back to some degree?
There is no doubt the pendulum is shifting back towards the center. It needs to be in the center. We need campuses where students have good intellectual debates and great educational experiences.
I think most university presidents agree with Ken on this issue. What universities in this country have done over the last 75 years, they have contributed disproportionately not only to educating the next generation, but to our economic prosperity and national security, to the well-being of society, in health care and in other areas. I think being true to our mission, the important thing is to stay true to that core mission: educate the next generation, create knowledge to benefit society, and have economic and cultural impact true to our core mission.
When I applied to Princeton, the conversation with the admissions officer was, 'If you come to Princeton, what great thing will you do for our country?' That needs to be the ethos of higher education. It is not four years of fun, it is not four years of entitlement. It is four years preparing the young man or young woman to make a difference.
What is going to be your metric of success for the Miami campus?
I would love to see the continuation of the success that happens in Pittsburgh. This university is single-handedly re-architecting Pittsburgh to be a great city of the 21st century. Ed Glaeser at Harvard is doing work on the importance of universities. Great cities are anchored by great universities, and to complement the universities that exist in Miami with one of the greatest universities in the world is a gift that will be one of the highest-impact gifts I will make in my life.
We talked about Miami quite a bit, but let's not forget Ken is also making a historic gift to the Pittsburgh campus. We want to support our most important priorities as well as to support our number one computer science school in the country, that is going to be named the Kenneth C. Griffin School of Computer Science.
Thank you both so much for taking the time today. I will send it back to New York. This is Lisa.
Thank you so much. That historic gift from Ken Griffin to help in part build a Miami campus. Just four minutes until the opening bell. The Nasdaq also up one third of 1%. 10-year yields were lower after the PCE softer print. Let's look at some of the single-name movers with Norah Mulinda.
Oracle under pressure after a new analysis raised questions about its data center. The bigger holdup is getting enough power from the grid as the project awaits regulatory approval. Shares of Oracle down about 0.7%. HPE landing a roughly $1 billion deal with cloud company Volter, its first-ever contract to supply AMD-powered servers. This is another sign benefiting from all of that AI hardware. Shares higher about 7% in the premarket trade. CoreWeave rolling out new tools to help customers train AI models faster. The announcement as the company holds its fully connected conference today. Shares of CoreWeave higher 2.4% in the premarket trade. Tune into Bloomberg Tech for an interview with the CoreWeave CEO today at 11:00 Eastern. Those are your morning movers.
Let's bring back the HSBC chief multi-asset strategist Max Kettner with a few moments until the opening bell. Back on this idea of tech. You're overweight tech. How are you looking at the universe and whether it trades in a monolith? Semis are rebounding. Where in the universe are you overweight, or is this a wholesale tech overweight?
For me, it's a wholesale tech overweight. It is being overweight things like emerging markets Asia. If you look at it, until you can be super bullish, probably it is a six-month conversation. We have all of these concerns from investors: are they going to make money with it? Are they going to produce enough revenue, sufficient ROI to justify those investments? That discussion is too long-term. We are talking in 2029 and 2030. We will do five or six trades before that. The important thing technically is one of the trough in the free cash flow. We note the free cash flow transfers from the hyperscalers are down and semis are up. When is the second derivative in hyperscaler free cash flow? When is that starting to turn positive? The moment that turns positive, I do not think we will sit there. We are improving. That is the time where you are saying, 'Do I want to be overweight the semis or hyperscalers?' Look at rental prices rising. It is the semis I want to be in the most. Imagine if you get the second derivative from the hyperscalers and actually improve it. You sit there and then you say, 'I want to be overweight everything. I want to buy both.'
We have to get to the opening bell. He is staying around as markets rally ahead of that opening bell. Less than four minutes to go. This is Bloomberg.
Let's get your trading day started. Relief this morning after two consecutive declines for this equity index benchmark, helped out by a softer PCE. Pressure from oil puts a cap on how much we can rally. S&P and the Nasdaq both up about one third of 1%. The opening bell at the New York Stock Exchange. The Smithsonian, the National Museum of the American Latino, getting a permanent exhibit at the Nation's Mall. Celebrating that. Very cool. We have an IPO. I guess we are looking at the factory floor. Here is the Nasdaq. This is a company that makes things for mission-critical infrastructure, things like data center. I was going to give them a lot of stick for wearing insanely orange things. There was even a guy with an orange vest. Look at what I am wearing. I cannot knock anyone for wearing orange. We are looking at Micron reporting earnings after the bell. The latest test for the AI trade. Investors on the outlook for demand as it remains bright despite heavy spending on AI growth. The main thing, the behavior of yields. Yields down at the front end. At the highest since 2002. 30-year yield still up 30 basis points. It is starting to steepen after flattening. Two-year yields are down four basis points following the PCE data. Let's bring back HSBC chief multi-asset strategist Max Kettner. You've been calling out the idea that yields are in the danger zone. I know you get this question a lot, so I will give it to you again. Why has it not impacted stocks?
Why is it not flashing orange?
You are giving us the green light and I am giving us the orange.
The big question is nominal growth has accelerated hugely. This time last year we can talk about 4.5% nominal GDP growth, now we are twice that. You look at the earnings upgrades relative to the multiple compression. In previous episodes, we are seeing when yields were starting to look at what we call the danger zone, the level of yields where it puts a damper on everything, whether that is risk assets or gold or all of the asset classes. Previously you had flat earnings growth but you had multiple compression and that came through into a net price decline. Now that is not happening because when you look at the last six months, earnings have been upgraded in the U.S. and the S&P by 21%. We have not seen that before. Whenever yields were going too high, multiple compression. If you look at what has happened, we have talked about CCCs. CCCs are almost trading at 1,000 basis points. Credit guys are saying it is distressed. You cannot say credit and equities, there is no effect, the market is oblivious to risks. It is clearly priced. CCCs are not even 10% of the index anymore. They used to be 18%. The pockets are too small to move the needle. Half of the Nasdaq 100 have seen multiples compressed by more than 10 points. We are in the middle of a multiple bear market, essentially. It is the earnings that have been pulling it up. Two weeks ago we had the Thursday and Friday after the FOMC and it was just four days of things are not great, but then you're getting the Nasdaq 6% higher. For me, if you want to be bearish, the most bearish you can be is neutral. If someone says I'm -1%, be my guest. It will slap you in your face. You cannot time when the market says if the oil goes from 100 to 98 because the long end goes down and suddenly realize once again these earnings are so good, you cannot hide that. To me, the most bearish you are allowed to be is neutral.
You're talking about the index construction of credit markets, and I wonder how much this speaks to the index construction of equities. Under the surface, the majority of stocks are not up here today. It has been painful underneath the surface. I wonder why we are not seeing stocks trade more as a monolith considering the macro forces at play. You're getting this churn in a relatively contained index. When pressures like oil markets and yields, presumably those are big enough events that causes more things to trade in line with each other.
That makes sense. You've seen the multiples compressed, and therefore we have seen the pain in multiples. Is it something that should be dragging the overall index down 10%? Sure. Multiples have compressed by at multiple points. That is give or take 10% down. If we had not had the earnings upgrades, if we had not had the Q2 earnings season, that spectacular earnings season, we would be trading at 6,800 to 7,000. Let's face it. I keep hearing it is so great and everything keeps going up. Q2 earnings growth was 51%. 51% earnings growth. The S&P is basically flat. Imagine if I come to you as an advisor and say 51% earnings growth and I will pay you zero. He will not look at me and say that is great. It has been a pretty terrible year for equities.
Isn't 51% basically energy companies and memory chips?
Not only. This is where I push back. The last three earnings seasons, the earnings beat rate has been on a record high. You can say that is just tech. This is the earnings beat rate. This is the breadth of earnings suppliers. You say it is just the S&P. You look at Europe and the U.K. and Japan and emerging markets. Everywhere, median earnings growth has been higher the last couple of quarters. This is not just tech, this is not just AI, it is not just the U.S. It is everywhere we are seeing that higher nominal growth really dragging.
At the moment it is particularly painful to be an equal-weighted investor. Small caps are down nearly 10% from their high. What do you make of what is dragging those forces lower?
It makes total sense if you think what has driven the rates move. The rates move has been led by the front end. What is the most front-end-sensitive equity market? It is the Russell 2000. You look at the Russell 2000 and almost 45% is floating rate. If the front end sells off, you do not want to be long small caps. We have been very much saying you want to be long Nasdaq, you want to be long — and short the small caps. That makes sense. There is the expression that maybe the front end is remaining volatile, so I would not fade that trade yet.
What do you make of the close link between oil and higher yields?
I think it is partly higher yields but partly liquidation.
You think this is mostly hedge funds margin calls blowing up?
This is where I push back on people saying the market is pricing four hikes. We are unwinding a couple of bps, and after the unwind, this is the price. This is not saying efficient market, we are settling in this price.
Are you saying markets are not efficient?
It is my job to say that. [Laughter] To say right now this is totally absolute market expectations is overdone because we've seen so much pain, particularly in G10.
We'll have to end there. Thanks for being generous with your time this morning. That is HSBC's Max Kettner. Let's get a check of your equity markets. Even between the stocks moving up and those moving down. In terms of what is leading us higher, Nvidia adding more than nine points to the S&P 500, that is up 23 points. Apple, Microsoft, Alphabet, a generally good day for big-cap stocks. Intel, Exxon, HPE, individual news driving those shares higher. Meta takes a breather and has been on a run thanks to the success of its AI agent. Tesla lower alongside Visa and Constellation Energy. The individual sectors this morning, you're looking at real estate, utilities, some of the bond proxies down this morning. InfoTech higher 1% as is energy as the price of oil moves higher. Coming up, more on tech. Sam Altman says investors are willing to be more patient with OpenAI because of safety. More on his conversation with Bloomberg Tech's Ed Ludlow, next. This is Bloomberg.
Let's get you top calls. With that is Norah.
Citi downgrading Moderna to sell and saying all the excitement around its cancer is more than priced in. Shares of Moderna down more than 4%. FICO cutting its price target in half, as new mortgage rules are taking away FICO's home-field advantage. Shares of the company down 3.8% after its biggest drop in history yesterday. William Blair starting CoreWeave at outperform, saying demand for AI computing power is only getting stronger and the firm thinks Wall Street may be underestimating how much money CoreWeave can make from all that demand. Shares higher 1.7%. Those are your top calls.
Bloomberg has learned that OpenAI is fundraising $30 billion with a $1.4 trillion valuation. That, as the CEO Sam Altman says, the company is willing to slow down training or delay new models if safety concerns demand it. Altman says OpenAI wants to keep pushing AI forward but not at the expense of being responsible. He spoke with Ed Ludlow after the company's developer day in San Francisco.
Given that our mission is to build this for people and empower people, and part of that is benefits, when we need to make a decision about slowing down our training or our model release so we can make more progress and put more of our attention into safety, alignment, monitoring, security, we will happily do that. Of course we will continue to make progress. The world should always have confidence in our safety cases and our safety claims, and that we are going to be responsible with this technology. We do not want to do the thing where we are like, 'We need regulation or we need our competitors to do X, Y, or Z or we will not be safe.' There are things we can reasonably release, like a faster version of Astra. This we can totally do. I understand why some people are just fully pedal to the metal.
I am very conscious of the developer audience and the use of technology. We need mechanisms to achieve that with the existing generation of models. Is that better with the technique of releasing a more capable model?
All of those things are good. Speed and price and capability are things people ask for the most often. The answer is people want all of them. That said, ultrafast is a really special thing. I did not appreciate how much I would like it. I should have known because we all want everything to be faster, but it is awesome.
Is it an economic position for OpenAI?
It is much more expensive to run, but we do charge more for it. We try to make it something.
We can talk to Sarah about the balance.
I think the market will decide, but I think people will be excited about it at this price, and it is reasonable for us.
You were just asked about an IPO, and what you said is, 'I want to be public one day.' The duties of being a public company are incompatible with a focus on safety.
Not quite. To be a newly public company and for us to understand how to live life as a public company with pressure from investors and all of the additional weight that comes with that, while we are going through this period of adjusting to this new level of capability and the new safety requirements for that, we just want to get our feet under us and make sure we understand how to operate in this new way to be able to make some of these decisions without the pressure of being a newly public company.
That was OpenAI CEO Sam Altman with Ed Ludlow. Fresh off the iPhone event, Apple is set to unveil more products. That is next here on Bloomberg.
20 minutes into your trading day. Welcome back to "Bloomberg: Open Interest." We gain after two consecutive days of decline, being led by the Nasdaq, 0.5%. The S&P falling just behind it. We are 1.5% away from all-time highs. The Russell is nearing something of a correction but fighting back against that this morning. Helping out, yields on the front end are coming in, but check out the long end. Relief is not there for the entirety of the bond market. The front end, you have two things going on. You have John Williams saying perhaps one more hike would be appropriate, but there is no urgency. That brings rates down. On the long end, you have this to deal with. Brent crude up at one point — up at 103. Are we just on our way to 6%? Currently at the highest since 2002. Nvidia is higher by 1.5%. Tech doing well thanks to the front end of the yield curve coming in. Micron, we are awaiting their earnings after the bell. Will it add more fuel to the AI fire? Will they revive the AI trade after real chop? Boeing only up just barely. Robinhood Markets is down 8%. It had initially rallied. They'll be offering perpetual futures that will allow you to trade on the weekends. Maybe we have decided this is not a good idea and we should have our weekends. Apple is up 1.5% alongside CoreWeave. Let's talk about Apple-specific news because they are planning to put a push into the smart home market. On October 13 they will have a hub at the center of the strategy and lead into hardware. You have a new hardware CEO. We are joined by Bloomberg equities reporter Carmen Reinicke.
It is kind of a long time coming because this is something where they are chasing Amazon and Google. There have been delays along the lines, and having this October 13 date and having the timeline is a big deal. We are seeing him come in and go pedal to the metal. He took the reins September 1, just about a month in. We are already getting some sort of progress. The article is full of details.
It is a great point. We have seen product launch after product launch following the new CEO taking over. What has been the market reception to all of this?
It is interesting. We watched the stock the phone has released, and it is always a mixed bag. Since we have been seeing buying across the board, the hyperscalers and the big tech stocks are getting more shiny. Some of that is macro-driven. It is investors looking back toward safety when there are high yields. There are also positive stuff. I think Siri AI finally getting out and bringing products to the market is important. That is what investors have been waiting for with Apple. We are seeing the stock looking positive. It has had a pretty incredible span of two months.
This is the last day of the month and out of the corner. Semis are down 7.3%. It has been a rough run. We will get Micron earnings after the bell. Could this be the next catalyst to revive the trade?
100% accurate. That is what I've been hearing from investors. Will the hyperscaler spending on these chips continue? Is it sustainable? The big thing is semiconductors are a cyclical space, especially memory. We are beyond where the cycle usually peaks, but this is not a regular cycle. It is a completely different thing. Analysts are forecasting incredible revenue and income, but the idea is, is it sustainable? How much more will this growth continue?
It is amazing the narrative chop we are seeing in tech and specifically around AI. Only a few weeks ago stocks were selling off because we were concerned they were slowing over safety concerns. President Trump had a meeting with AI executives yesterday and put together what he calls an AI constitution, nothing legally binding, just morally binding, saying you agree to things like external audits. Has the market looked past the slowing narrative?
