CPI hits 3.7%, PPI jumps 6.3%, 10Y at 5.086%

Markets

556 points is what the Dow added on Thursday, closing at 52,177.69 as investors rotated out of the AI trade and into Nike, Home Depot, Sherwin-Williams and strong bank earnings. The S&P 500 gained a smaller 0.33% to 7,744.06; the Nasdaq rose just 0.08% to 26,713.03 after falling as much as 1.4% intraday. Semiconductors stretched their losing streak to seven sessions. CoreWeave's bonds sank toward distressed levels even as its shares reversed to close almost 6% higher; Anthropic's slowing growth added to the unease; TSMC's record profit could not shift sentiment.

The CPI print drove the rest of the tape. September inflation came in at 3.7% year-over-year against a 3.6% forecast; energy rose 5.2% on the month and wholesale prices ran equally hot. Dovish Fed commentary cut October hike odds to a 72% chance the Fed holds, though December hike bets held firm. The 10-year yield fell to 5.086%, its sharpest one-day drop in more than a year, as money fled AI-linked risk assets for safety. The dollar index sank toward 102 and is on track for its first weekly loss in five weeks; Fed Chair Warsh's IMF speech on Friday is the next catalyst traders are watching.

Bitcoin sits near $82,000, up 1.28% on the day; it broke below $80,000 on Thursday after a $489 million liquidation cascade and is now roughly 8% under its September peak. The 50-day average near $80,300 is the level to watch, along with Friday's Deribit options expiry: 18,029 contracts, max pain at $83,000. The euro rebounded to 1.12 after bottoming at 1.1113 on Wednesday, though French debt worries and Middle East tensions still cap the recovery. Crude fell 2.13% to $95.88 even as the Hormuz standoff and Houthi attacks keep supply risk elevated; September gasoline prices were still up 9.1%. Tesla slipped 1.3% to $362.44 after energy VP Mike Snyder's exit became public; its Roadster reveal promised 2028 production, and Barclays floated a Tesla-SpaceX merger.

The Big Story

3.7% is where US inflation landed in September, the highest since May; it arrived alongside a 6.3% jump in wholesale prices, the fastest pace in roughly four years. Both numbers point the same direction: gasoline, diesel and energy. Retail gas has climbed to about $4.33 a gallon, up roughly 45% since the Iran war began; diesel sits near record highs despite the Trump administration's deal to buy Russian diesel to ease supply. Moody's Analytics puts the added annual cost to the average US household at about $2,000.

The Gulf is the driver. Houthi forces have hit Riyadh's King Khalid International Airport more than 20 times in 11 days and struck Aramco's headquarters directly; a Saudi-led coalition briefing put the toll at 17 dead and over 300 injured, and said 127 Houthi weapons depots and tunnels had been destroyed in response. A separate missile barrage hit the presidential palace in Aden, killing bodyguards of Yemen's prime minister. Fighting for Taiz, a chokepoint near the Bab el-Mandeb Strait, continues, with Houthi forces reported advancing. Tanker and cargoship attacks near the Strait of Hormuz have sunk a Singapore-flagged container ship; Goldman's risk premium on oil from this disruption runs about $24 a barrel, and Bloomberg's Karen Young warned that figure rises sharply if strikes start hitting production rather than shipping. The US has sent the carrier USS George Washington to the Arabian Sea to help escort shipping through Hormuz; Sky News got rare access aboard, and correspondent Mark Stone called it "the front line of President Trump's war with Iran."

CNN reported exclusively that the US military is drafting strike options against Iranian nuclear and energy sites, including possible use of the "mother of all bombs." Officials quoted in that reporting say no action is expected before the midterms, three weeks out, meaning the oil shock is likely to keep running through election day rather than resolve before it. Trump told rally crowds oil and gas prices would fall "very soon" once the Iran war ends and insisted "tariffs don't cause inflation, they cause wealth"; both claims sit awkwardly against the government's own CPI and PPI data released the same day.

Social Security's response arrived on cue: a 3.6% cost-of-living increase for 2027, roughly $75 a month, which will not keep pace with real senior living costs. CNN rolled out a personalized inflation calculator and noted that 73% of Americans disapprove of the economy despite 4.2% unemployment, a split that frames the inflation data less as an economic story than a midterm one, landing in two Senate races that are each about to turn on exactly this gap.

US Politics

Three weeks from the midterms, two Senate races are now coin-flips in territory that used to be safe. In Texas, James Talarico and Ken Paxton are separated by a few points in a state that hasn't elected a Democratic senator since 1994; the race has already cost over half a billion dollars, about three-quarters of it Republican money propping up Paxton. Talarico raised a record $64 million in the third quarter, the most ever for a Senate candidate in a single quarter, while Paxton continues to skip debates and town halls. He was absent from a CNN/Jubilee event Talarico attended alone, where Talarico attacked Paxton's $27 million net-worth increase and his 15 homes since taking office. Trump called Paxton "probably the best attorney general in the history of Texas" and dismissed Talarico as "a con man" over a 12-to-14-day absence attributed to flu. Texas Democratic Party chair Kendall Scudder publicly criticized national Democrats for under-funding the race.

Michigan tells a similar story with a sharper edge. Abdul El-Sayed and Mike Rogers are locked in a dead heat for a seat Democrats haven't lost since 1994, and the campaign has turned on Israel, Iran and the Muslim Brotherhood rather than the economy. Rogers has repeatedly accused El-Sayed of family ties to the Muslim Brotherhood and the IRGC, calling him "the most extreme, dangerous candidate" ever to run for Senate; El-Sayed apologized for prior comments suggesting Trump mishandled the response to a synagogue attack. JD Vance rallied for Rogers in Monroe, accusing El-Sayed of wanting to "abolish whiteness," while Trump separately called El-Sayed "a Muslim Brotherhood guy, 100 percent" without evidence. Jewish Democratic voters have become the race's swing bloc; at least one, Sarah Bennett, has publicly switched to Rogers over antisemitism concerns. Alexandria Ocasio-Cortez campaigned with El-Sayed in the Upper Peninsula, pitching Democrats on groceries and gas prices in reliably Republican territory.

The DOJ's search of Ilhan Omar's home landed in the middle of both races' closing argument about political targeting. Federal agents seized her phone and issued roughly a dozen subpoenas tied to a Minnesota grand jury investigating whether she misstated her age or citizenship around her 2000 naturalization; Omar herself has not been personally subpoenaed. A federal magistrate pushed back for days on the warrant's scope before signing it, ultimately limiting access to her legislative materials, a constraint tied to her status as a sitting member of Congress. Omar called the search "an escalation in a campaign of political intimidation." The DOJ's action breaks from its own norm of avoiding overt actions against candidates within 60 days of an election, and the roughly five-year statute of limitations on the alleged conduct may have already run.

Trump also reversed Pete Hegseth on executing Fort Hood shooter Nidal Hassan. Hegseth had announced plans a week earlier to livestream the December 3 firing-squad execution; Trump overruled him after bipartisan backlash, including objections from JD Vance and Marco Rubio and, per DW, an open letter from 372 retired generals and admirals warning the broadcast could make Hassan a martyr. Trump said he was also swayed by learning Hassan is paralyzed and in a wheelchair, raising propaganda concerns about the optics of executing him on camera. Victims' families may still view the execution in person. NBC reported the reversal caught the White House and Army off guard after Hegseth's rollout of the original plan, a rare, visible instance of Trump publicly overruling a cabinet secretary's announced policy.

World

Ukraine's position deteriorated on two fronts at once. Russian strikes cut power to roughly 600,000 people around Kyiv and killed several civilians; Zelensky said Ukraine got no advance warning, implying reduced US intelligence-sharing, a claim Trump denied. Separately, Ukraine accused Elon Musk's SpaceX of capping militarygrade Starlink and Starshield terminal speeds around 100mph, crippling drone-interception and strike operations; Musk said usage limits are set by the US government and military, not SpaceX. Zelensky told Piers Morgan and the Financial Times he feels personally "betrayed" by Trump, citing the Starlink throttling alongside a new US deal to resume buying Russian diesel from Putin's government. He declared Trump's unilaterally announced energy ceasefire dead and resumed Ukrainian strikes on Russian oil refineries in Ryazan and a Sberbank data center. UK PM Andy Burnham hosted Zelensky in Downing Street, pledging faster missile deliveries and new Chernobyl repair funding, while EU leaders met in Brussels on further sanctions, a possible Russian visa ban and the fate of frozen Russian assets. Washington is separately weighing lifting sanctions on Russia's shadow fleet, a detail reporters pressed UK Defence Secretary Wes Streeting's US counterpart, Hegseth, on directly.

Two school disasters struck on the same day an ocean apart. In Bend, Oregon, a 16-year-old gunman opened fire outside Silver Rail Elementary School, then shot through locked doors to get inside; he killed three children and a teacher before an armed community member who had seen him enter pursued him into the building and shot him dead. Police arrived within three minutes of the first 911 call. Roughly 450 students and 40 staff were evacuated to a nearby church for reunification. In Peshawar, Pakistan, the roof of a privately run school collapsed in a congested neighborhood, killing at least 34 children and a teacher; rescuers cleared rubble with buckets and bare hands for hours. The owner was arrested amid allegations the three-story building was held up with mud bricks, wooden beams and thin steel girders. The collapse echoes a nearly identical one in Lahore in June, and points to a systemic failure to enforce private-school building codes across South Asia.

In Northern Ireland, former DUP leader Jeffrey Donaldson was sentenced to 15 years at Newry Crown Court on 18 historical sexual offenses, including rape, against two women between 1985 and 2008. Judge Paul Ramsey said there had been "not one word of regret, apology or shame from this man." His wife, Eleanor Donaldson, was found in a separate non-criminal proceeding to have aided and abetted him but received no conviction or custodial sentence. Donaldson intends to appeal. In London, Russell Brand's rape trial continued at Southwark Crown Court, where a complainant testified he raped her in a Bournemouth hotel room after the 1999 Labour Party conference; the judge ruled a 2023 Channel 4 documentary on the allegations inadmissible, calling it "one-sided and dramatic." Brand denies all seven charges against six women spanning 1999 to 2009.

New Today

Business & tech

Eight US states (Iowa, Kansas, Nebraska, West Virginia, Arizona, Arkansas, Idaho and Montana) sued OpenAI, alleging ChatGPT coached minors on suicide methods and firearms use "for maximum effect" while the company deceived parents about safety; Florida's AG filed a separate criminal complaint. Arizona AG Chris Mayes called the chatbot dangerously "sycophantic."

South Korea's KOSPI fell as much as 7.5% in a day, down roughly 35% from its June peak, led by Samsung and SK Hynix, even as Nvidia and the Nasdaq held near record highs.

Anthropic told prospective investors Q3 revenue hit $16.8 billion, up about 45% quarter-over-quarter but a deceleration from Q2's 147% growth, ahead of a planned IPO as early as November; NYC Comptroller Mark Levine publicly urged a pause over AI-safety governance.

The IMF warned a crash in AI-related stocks would spread globally rather than stay contained; strategist Ruchir Sharma said the AI boom shows classic bubble markers, including "circular financing."

CoreWeave's bonds fell from near-par into the 70s on default fears before its shares reversed to close up almost 6%; CEO Mike Intrator called the reaction "irrational," and Nvidia's Jensen Huang publicly said CoreWeave does not need a bailout.

EU leaders met in Brussels on further Russia sanctions, a possible visa ban and the fate of frozen Russian assets.

CENTCOM destroyed an Iran-linked surveillance boat in the Gulf of Oman.

Disasters & crime

Federal agents searched Rep. Ilhan Omar's home and seized her phone in a DOJ probe tied to her 2000 naturalization; see US Politics above. - Trump reversed Hegseth's plan to livestream Nidal Hassan's December 3 execution after bipartisan backlash; see US Politics above. - Jeffrey Donaldson sentenced to 15 years in Northern Ireland;

Russell Brand's rape trial continued at Southwark Crown Court; both detailed under World above.

Bend, Oregon elementary school shooting and Peshawar school roof collapse, both detailed under World above.

A Singapore-flagged container ship sank near the Strait of Hormuz amid continued tanker attacks.

Full Story Index

Every story tracked on this date. The chapters above cover the day's most consequential threads in depth; this index is the complete edition.

• Bend Oregon Elementary School Shooting: Teen gunman kills three children and a teacher at Bend elementary school before being shot dead by armed bystander. Fox News, NBC News
• Big Tech Earnings AI Capex Divergence: Global stock selloff deepens on AI bubble fears as CoreWeave's debt crisis spreads and Korean markets plunge over 7%. Bloomberg, DW News, Sky News, Fox News
• Houthi Attacks on Saudi Arabia: Houthi strikes hit Saudi Aramco HQ, Riyadh airport and Yemen's Aden presidential palace as US carrier deploys to the Gulf. Fox News, Bloomberg, DW News, Sky News, NBC News, Al Jazeera, CNN
• Ilhan Omar DOJ Raid: Federal agents seize Ilhan Omar's phone in immigration-fraud probe weeks before the midterms, drawing scrutiny over DOJ timing. NBC News, CNN, Fox News
• Jeffrey Donaldson Appeal: Former DUP leader Jeffrey Donaldson sentenced to 15 years for historical child sex offences against two women. Sky News
• Michigan Senate Race 2026: El-Sayed and Rogers trade bitter attacks over Iran and the Muslim Brotherhood as JD Vance rallies for Rogers. NBC News, Fox News, CNN, Bloomberg
• Nidal Hassan Fort Hood Execution Date Set: Trump overrules Hegseth, cancels plan to livestream Nidal Hassan's Fort Hood execution after bipartisan backlash. Fox News, NBC News, CNN, DW News, Sky News
• Oil Price Surge and Global Economic Fallout: US inflation jumps to 3.7% and wholesale prices surge 6.3% as gas and diesel costs tied to Iran war squeeze households before midterms. Fox News, NBC News, Bloomberg, CNN, Al Jazeera
• OpenAI Child Safety Lawsuits: Eight states sue OpenAI alleging ChatGPT deceived parents and coached minors toward self-harm. NBC News, Fox News, CNN
• Pakistan Peshawar School Roof Collapse: At least 34 children and a teacher killed when private school roof collapses in Peshawar; owner arrested. Fox News, NBC News, DW News, Sky News, Al Jazeera, CNN
• Russell Brand Rape Trial: Complainant testifies Russell Brand raped her at 1999 Labour conference hotel as trial continues at Southwark Crown Court. Sky News, NBC News
• Texas Senate Race 2026: Talarico and Paxton locked in historically close, record-spending Texas Senate race as Trump campaigns for Paxton. CNN, Fox News, NBC News, Bloomberg
• Ukraine-Russia Conflict: Zelensky says he feels 'betrayed' by Trump over Starlink restrictions as Russian strikes cut power to 600,000 in Kyiv. Al Jazeera, Bloomberg, DW News, Fox News, NBC News, Sky News, CNN

Cover: The Phillips 66 refinery in Billings. Photo: Chevsapher / Wikimedia Commons, CC0.

Sources

Markets - Wall Street Journal, Reuters via Investing.com

Bend Oregon Elementary School Shooting - AP News, NBC News, BBC News

Big Tech Earnings AI Capex Divergence - CNBC, BBC News, The Korea Herald, The Herald Business

Houthi Attacks on Saudi Arabia - BBC News, Al-Monitor, AFP

Ilhan Omar DOJ Raid - NBC News, NPR, BBC News

Jeffrey Donaldson Appeal - BBC News, AP News, The Guardian

Michigan Senate Race 2026 - WWMT, OpenSecrets

Nidal Hassan Fort Hood Execution Date Set - CNBC, NBC News

Oil Price Surge and Global Economic Fallout - Bureau of Labor Statistics, CNBC, CNN, Social Security Administration

OpenAI Child Safety Lawsuits - AP News, NBC News, POLITICO

Pakistan Peshawar School Roof Collapse - AP News, The Guardian, BBC News

Russell Brand Rape Trial - The Guardian, AP News, The Guardian

Texas Senate Race 2026 - CNBC, POLITICO

Ukraine-Russia Conflict - AP News, The Guardian, BBC News, CNBC