Fed hike odds, Microsoft's Oracle lease, and international funds

Labor Department's October jobs report keeps a Fed rate hike in play

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Inflation dominates the week: October consumer prices and real earnings arrive Tuesday, then weekly jobless claims Thursday and producer prices Friday, after a jobs report that kept a December Fed hike in play.

• Taiwan Semiconductor shares rose 6.3% on Friday, adding $120 billion in market value and $6,330 on every $100,000 held. The company is 2.2% of the value of the 500 largest U.S. companies, so its gain added $142 to $100,000 spread across them by size. Yet 588 stocks fell against 524 that rose. The question is whether a few giants keep carrying the market; today's count of rising and falling stocks may show it.

• International stock funds could lose ground in dollar terms when the dollar strengthens. On Friday a fund that tracks the dollar against major currencies rose 0.7%, adding $730 on $100,000 held. A firmer dollar can shrink what overseas gains are worth once converted back, and it could make trips abroad cheaper. The question is whether a December Fed rate hike, kept in play by the October jobs report, keeps the dollar firm; the Fed's December meeting may answer it.

• Sector funds split sharply on Friday. Technology funds rose 1.5%, adding $1,450 on $100,000 held. Consumer staples funds slid 1.3%, losing $1,280. Even after that gain, the Nasdaq-100 has lost 4.9% so far in November. The question is whether money is moving from household-goods makers into tech or Friday was a one-day swing; this week's sector moves may show it.

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   Microsoft winds down AI computing lease with Oracle. Microsoft is winding down an arrangement to lease AI computing capacity from Oracle, Bloomberg reported, partly because the older Nvidia chips no longer meet its needs. The Wall Street Journal reported that OpenAI executives were discussing whether to reset data center capacity plans for next year. S&P said OpenAI accounts for a large share of Oracle's $664 billion contracted revenue backlog as of Aug. 31. Oracle spent $55.7 billion on capital expenditure, meaning buildings and equipment, in fiscal 2026. In the First Trust Cloud Computing ETF, Oracle is 2.99% of the portfolio. Read more

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   TSLA · +4.23% Tesla adds Cybertruck shift before line makes way for Cybercab. Tesla will add an extra shift to clear its Cybertruck backlog, CEO Elon Musk said Saturday in a post on X. He said the line comes down around June or July next year. A day earlier, Musk said Tesla would wind down Cybertruck production in Texas to make way for the Cybercab, a small robotaxi, Reuters reported. Tesla shares rose 4.2% on Friday. Tesla is 1.6% of the value of the 500 largest U.S. companies, so its gain added $69 to $100,000 spread across them by size. Read more

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   LRCX · +8.23% Lam Research rallies after board approves stock buyback. Lam Research shares rose 8.2% on Friday. The chip equipment maker said on Thursday that its board had authorized a $25 billion stock buyback. A buyback is a company purchasing its own shares, which leaves fewer shares to split future profits. The company also said its board declared a quarterly dividend of 33 cents per share, payable Jan. 6. Even after Friday's gain, the stock sits 53.7% below its 52-week high. Read more

• Topics: Chips, Markets

  Bank of America says chip stocks now trade at a discount to the market

  The PHLX Semiconductor Index trades at 13.7 times expected earnings, against 17.7 for the S&P 500, Bank of America analyst Vivek Arya said in a note. He said a 20% cut in 2027 cloud spending could shrink AI chipmaker earnings by 35% to 40% or more.

• Topics: Models, Security

  OpenAI releases a model built to find and exploit software flaws

  OpenAI said its GPT-6 Cyber model found 588 previously unknown Linux kernel flaws and 81 in Firefox. Security teams at Palo Alto Networks and Cisco already use it, OpenAI said in a post on X, so AI could become a tool security companies sell rather than only a rival.

• Topics: Chips, Energy

  Core Scientific plans to exit Bitcoin mining and focus on AI data centers

  Core Scientific expects to finish winding down Bitcoin mining in the fourth quarter, finance chief Jim Nygaard said on the earnings call, after renting data-center space for AI brought in $215.43 million last quarter. AMD leases 377 megawatts from it directly, tying the former miner to AI chip demand.

Why a strong jobs report can lift rate-hike odds and weigh on stocks. Strong hiring can hurt stocks because the Federal Reserve may raise the fed funds rate, its overnight rate for banks, to cool wages. The Labor Department's October report counted 165,000 new jobs and a 0.4% monthly pay rise. CME Group's FedWatch tool put the odds of a December Fed hike at 69.4%. Card, savings and loan rates tend to follow within weeks, and costlier borrowing could squeeze profits at companies in your index fund.

Fed funds rate in the glossary

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The big picture. The losses sat mostly in big technology. The Nasdaq-100 tumbled 4.9% last week, after a 6.7% October drop, yet it is up 6.9% this year. The S&P 500 fell 0.9% in October and has slid 2.7% so far in November, leaving it up 7.8% for the year. The Dow rose 1.7% in October and has fallen 0.9% since, but holds a 6.7% gain. Rate risk from the Labor Department's jobs report now adds to the tech selling.

On the calendar. The Fed releases minutes of its October meeting on Wednesday, Nov. 18, 2:00 p.m. ET. They could show how widely officials backed higher rates. Money-market yields track 3-month Treasury bills, now at 4.19%. A firmer tone might keep cash yields there and variable-rate loans costly; a softer one might ease both.