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| S&P 500 |
7,661 |
+0.3% |
| Dow |
51,875 |
+0.2% |
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| Nasdaq-100 |
29,613 |
+0.6% |
| Bitcoin |
$77,911 |
+1.9% |
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| S&P 500 |
7,661 |
+0.3% |
| Nasdaq-100 |
29,613 |
+0.6% |
| Dow |
51,875 |
+0.2% |
| Bitcoin |
$77,911 |
+1.9% |
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1. The Fed Hiked a Quarter Point; the Dow Shed 630 |
A pipeline shutdown in Saudi Arabia is where this week’s rate decision started. Brent crude jumped 2.9% to settle at $108.75 a barrel after the closure. The 10-year Treasury yield spiked as high as 5.04%, its highest since 2007, before easing back toward 5%. Expensive oil makes investors expect inflation, as we wrote last week, and that expectation moves bonds. |
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The odds flipped in days: Data from CME Group showed investors pricing a 93% chance of a quarter-point hike, up from 59% a week earlier.
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The Federal Reserve delivered, 12 to 0: It raised the benchmark rate a quarter point on Wednesday to a range of 3.75% to 4%, its first increase since 2023. Chairman Kevin Warsh pointed to stubborn inflation, worsened by rebounding oil prices.
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Markets read it as a beginning: The Dow closed down 631 points, or 1.2%, at 51,461.90, after falling more than 800 points during Warsh’s press conference. Morgan Stanley economists now expect two more hikes, reversing an earlier call for none.
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A quarter point doesn’t break a long-term thesis. It does reset the discount rate that every long-duration asset is valued against. The businesses that hold up best will be the ones paying for growth out of cash flow rather than borrowing for it. |
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2. The AI Trade Split on a Slowdown Warning |
Anthropic CEO Dario Amodei published an essay on Saturday arguing that the AI industry should slow down. By Monday’s close, his 3,800 words had taken about 7% off Marvell Technology and CoreWeave.
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Monday, the builders sold off: Nvidia and Broadcom each closed down about 3%, and Micron Technology closed down 5.2%.
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In the same session, the defenders bid up: CrowdStrike closed at a record high above $235, up nearly 14%.
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Wednesday night, OpenAI showed its work: Sam Altman had backed Amodei’s call on Monday. On Wednesday, his company, OpenAI, disclosed six new instances of “unexpected or concerning” AI behavior. In one, an agent uploaded a file to the open internet without asking so that it could cite a source for an answer it already had. OpenAI also said the industry has not solved alignment well enough to keep scaling “at maximum speed” for much longer.
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A real slowdown would hit companies whose revenue tracks how many new models get built. Broadcom sells chips for models already in production; CEO Hock Tan told CNBC that day-to-day demand should hold, even if training slows. CrowdStrike sells protection against AI agents that go rogue, which its CEO George Kurtz describes as “swarming to attack.” Such businesses only suffer if companies start switching off models they already run. |
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3. Corning, Axon, and Kyndryl Paid Up for Growth |
Growth costs money. This week, three of our recommendations found different ways to get that money. Corning (NYSE: GLW) makes optical fiber for networks and AI data centers. Last week, a Verizon fiber order lifted shares 9%. Corning said Friday that it would sell up to $2 billion of new stock. It didn’t say whether any will go toward that order. Shares closed down 13.7% Monday, the worst drop in the S&P 500 that day.
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Corning asked its owners: The Stock Advisor recommendation from Team Rule Breakers hired Goldman Sachs to sell the shares gradually. Each new share leaves owners with a smaller slice. Proceeds go to “general corporate purposes.”
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Axon asked its lenders: Axon priced $1 billion of 0% convertible senior notes. Holders can convert to stock before the 2031 maturity, and Axon decides whether to pay in cash or shares. The Rule Breakers recommendation is down 40% over the past year.
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Kyndryl gave up its buyback: Kyndryl, recommended by Team Hidden Gems, closed its purchase of Healthcare IT Leaders for up to $350 million. It paused share repurchases for flexibility.
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Corning’s owners paid this week for something the company hasn’t entirely explained. Axon’s owners may pay later instead. Kyndryl’s shareholders gave up buybacks, and they know what was bought. |
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4. Amazon’s $2.4 Billion Generator Order Came With Warrants
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Generac makes backup generators. On Wednesday, it gave Amazon warrants to buy up to $340 million of its stock. Generac closed Wednesday at $175.11, barely changed on the day, but was up more than 18% at Thursday’s close. (A warrant is the right to buy shares later at a price fixed now.)
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The order behind it: Initial deliveries run $2.4 billion across 2027 and 2028. Amazon earned the right to buy about 308,000 shares right away and earns more as its payments climb.
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Why Amazon asks: An order that size can transform a supplier’s business and stock. The warrants let Amazon share in that. Amazon, a Stock Advisor and Hidden Gems recommendation, has struck similar deals with chipmaker Astera Labs and grocery distributor SpartanNash.
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Power is the new constraint: Nvidia, Alphabet’s Google, and start-up Emerald AI announced the AI Energy Management Alliance on Wednesday. The coalition wants AI data centers to flex electricity use instead of drawing a fixed load.
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Amazon is still paying for the generators -- $2.4 billion worth to start, and the warrants fully vest only if that reaches $8 billion. If Generac’s stock keeps rising, Amazon can buy shares at the fixed price and pocket the difference. That works only while the data center build-out continues. |
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5. Four House Calls on Stocks That Look Expensive |
What does a rich stock price actually tell you? That question runs through all four house statements this week.
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Chipotle, from $1.21 to $36: We first recommended Chipotle in Rule Breakers in January 2007 at a split-adjusted $1.21. Team Rule Breakers is still bullish, but with clearer eyes as growth slows. Its five-year target is $48. Members with a full position needn’t add here.
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Cloudflare, priced at 45 times sales: Team Hidden Gems and Team Rule Breakers have both pounded the table on Cloudflare in 43 buy recommendations since 2020. We have sold three of those positions but held the other 40. Both teams’ five-year predictions sit above $500, up significantly from today’s $334.
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Moderna, and Tom’s price: At Hidden Gems, we recommended and invested in Moderna at $44.85 in November 2025. Shares trade near $144. Motley Fool co-founder and CEO Tom Gardner argues that Merck should acquire it for $210 to $215 per share.
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Expect to pay up for CrowdStrike: The Motley Fool first recommended CrowdStrike in 2020. Shares now trade near $240. Team Rule Breakers says the stock isn’t cheap by any measure and wouldn’t expect it to be. Its five-year prediction is $365.
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