By Jamie McGeever
ORLANDO, Florida, Oct 21 (Reuters) - Buoyant AI sentiment on the back of quarterly results from SpaceX and Super Micro Computer lifted Wall Street on Wednesday, as relatively calm energy, currency, and US bond markets allowed tech earnings to dominate. European markets were more lively, however, and France's 10-year bond yield rose above 5% for the first time in nearly a quarter of a century.
In my column today, I look at five AI quirks and conundrums that investors should be aware
of as the US earnings season gets underway.
Today's Key Reads
• Government websites go dark as software flaw sparks security scramble
• Anthropic logged net loss of over $80 billion in first half of 2026
• Smouldering debt risk haunts French markets: Mike Dolan
• UK inflation and borrowing climb before Healey’s first budget
• Meta ordered to pay $25 billion to New Mexico after jury finds company misled consumers about data privacy
• Today's Key Market Moves STOCKS: South Korea +3.3%, best day since September 7. Europe +1%, UK steady. Mexico +1.5%. Nasdaq +1%, Dow +0.7%, S&P 500 +0.6%.SECTORS/SHARES: Seven sectors on the S&P 500 rise, four fall. Tech +1.6%, communications services -1.3%. Meta +4% after the bell on earnings, Tesla +2%, IBM +7%.FX: US dollar steady. Biggest G10 gainer is Aussie dollar, Indian rupee rises to six-week high. Biggest decliner Mexican peso, -1.5%.BONDS: French 10-year yield hits 5% for first time since 2002. US 20-year auction mixed — 2.73 bid/cover at the higher end of range of the last year, but highest auction yield since 1986, some analysts say.COMMODITIES/METALS: Oil mixed — Brent steady, WTI settles lower. Gold little changed at $4,135/oz.
Today's Talking Points:
Anthropic
AI leader Anthropic posted a whopping $80.7 billion net loss in the first half of this year. That was up significantly from a $13 billion loss a year earlier, largely due to a $72 billion accounting charge. The net loss is almost double the $42 billion loss reported for calendar year 2025. Revenue in the first six months of the year was just over $16 billion.
Are these figures bullish or bearish? Depends which camp you're in. The headline loss is alarming, but it was mainly due to a one-off charge. Revenue is low and growth is slowing, but exclude the accounting charge and break-even doesn't look quite so far away. However, are the numbers and trends those of a company eyeing a $1.5-$2 trillion IPO valuation?
Sub subprime
Is the US housing market frozen? It's certainly seizing up, which is traditionally a major red flag for the wider economy. Pending home sales in September plunged to the lowest since records began a quarter of a century ago, and housing starts fell 5.2% in the month to their lowest since the pandemic. US homebuilder sentiment, meanwhile, has plunged to the lowest level in nearly 14-1/2 years.
Rising Fed interest rates, stubbornly high home prices, and mortgage rates the highest in three years at 7.50% are all factors. But it is remarkable that activity now is even weaker than it was at the heights — or depths? — of the 2008 US housing market crash and its aftermath, and the Covid-19 pandemic in 2020. Given the importance of housing and related services to the US economy, growth could suffer.
Pounding the beat
UK finance minister John Healey delivers his first budget next week. To say he faces a few challenges would be an understatement. Figures this week show government borrowing in September rose more than expected again, and public debt surpassed the psychologically key £3 trillion mark. Part of the reason why borrowing last month rose so much was debt interest payments — bond yields are the highest in decades, and with the debt pile growing, it's a difficult cycle to get out of. He has little wiggle room next week.
Bad news for sterling, right? Not necessarily. The latest inflation and wage growth data have cemented market expectations for a rate hike on November 5. Indeed, traders now reckon the Bank of England will be the most hawkish G10 central bank over the next year or so, along with the Reserve Bank of New Zealand, and raise rates more than 100 bps. Sterling has pounced on the euro's weakness, surging almost 3% in the last month to its highest since May last year. And cable is rebounding from its year low. Next stop $1.35?
What could move markets tomorrow?
• New Zealand inflation (September)
• South Korea interest rate decision
• Canada PPI inflation (September)
• US Treasury sells $26 billion of 5-year TIPS
• US earnings including Procter & Gamble, Union Pacific, Western Digital, Lockheed Martin
Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(Reporting by Jamie McGeever; Editing by Nia Williams)
