- The Dow Jones Industrial Average opened Friday down about 1%, or 535 points, while the S&P 500 shed 0.6% and the Nasdaq Composite fell 0.5%, as Middle East tensions rose and selling broadened beyond tech. The Cboe Volatility Index climbed another 6% to 20.24 after a 14% jump Thursday, putting it on track for its first weekly close above 20 since early June.
- Oil added to the pressure, with Brent futures up 2.6% at $116.13 a barrel, the highest since April 30, and WTI about 3% higher at $102.56. Brent was on track for a weekly gain of nearly 6% and a third straight week of gains as traders increasingly expect the US to resume strikes on Iran.
- Telecom stocks fell after Bloomberg reported SpaceX is in talks to access at least 80,000 US cell sites as it moves toward becoming a wireless carrier, including discussions with Crown Castle. AT&T and T-Mobile US fell nearly 5% in premarket trading while Verizon dropped about 4%.
- AI infrastructure stress remained in focus as Morgan Stanley cut its CoreWeave price target to $70 from $99, citing growing financing uncertainty, while keeping an equal-weight rating. CoreWeave shares fell 2% Friday after a week of selling, and the spread on its credit default swaps has widened to levels generally considered distressed.
What Happened?
US stocks opened lower Friday, with the Dow down about 535 points at the open, after Thursday’s tech-led rout. The University of Michigan’s final October consumer sentiment index came in at 48, little changed from September and above the 46.3 consensus, but one-year inflation expectations rose to 4.7% and the five-year outlook to 3.5%. The 10-year Treasury yield rose 2 basis points to 4.9759% after a sharp drop the previous session. Brent crude hit a six-month high after President Trump said the US was not negotiating with Iran and something would happen “fairly soon,” while Iran-allied Houthi militants kept striking Saudi Arabia.
Why It Matters?
The session showed the selloff spreading from AI stocks to the broader market, with energy prices and geopolitical risk joining worries about AI spending and financing. Higher oil feeds directly into the rising inflation expectations in the Michigan survey, which complicates the outlook for interest rates and bonds. The telecom drop shows how investors are starting to price SpaceX as a potential competitor to incumbent carriers, not just a satellite operator. Morgan Stanley’s CoreWeave note underlines that even a company it calls the speed and scale leader among neoclouds faces questions about funding its contracted capacity.
What’s Next?
Watch whether the VIX holds above 20 into the weekly close, which would confirm a step-up in market stress. Oil remains the key swing factor, with traders bracing for possible US strikes on Iran and US officials reportedly planning fresh strikes with Israel after the midterm elections. Any confirmation of SpaceX’s cell-site deals could keep pressure on AT&T, T-Mobile and Verizon. For CoreWeave, Morgan Stanley sees a hyperscaler financing agreement as the most reasonable way to secure cheaper funding.
Affected Tickers and Coins: DIA, SPY, T, TMUS, VZ, CCI, CRWV, BZ, CL
