On Thursday, chip stocks fell about 12% and traders cut their bets on a December rate hike. On Friday, a hot jobs report put those bets nearly all the way back. The chips didn't follow. Kalshi's December hike contract slid from about 80 cents to 62 during the rout. It traded at 78 this afternoon. The semiconductor index recovered more than a quarter of its loss. Last night we asked whether Thursday's drop in hike odds was about the economy or about stocks. Now we know. 
3 MOVERS IN 3 MINUTES1. Vistra answered our question. Its stock is still below Election Day. Vistra (VST) rose about 11% after quarterly adjusted EBITDA jumped more than 50% to $2.38 billion. It introduced a 2027 forecast of $7.7 billion to $8.5 billion. It has hedged about 98% of expected 2027 output and about 78% of 2028, and it signed a 20-year, 207-megawatt power deal at its Odessa, Texas gas plant. Last night we asked whether the Texas data-center pledge was changing customer behavior. In Vistra's numbers, not yet. NRG (NRG) rose about 11% and Constellation (CEG) about 5%. Vistra still sits about 10% below its Nov. 3 close. Next year is mostly sold. The policy risk lives in 2028 and beyond. 2. Axon paid up for a private drone maker. Its own stock went the other way. Axon (AXON) fell about 18% to a 52-week low after cutting its 2026 revenue growth outlook to about 30% from 32% to 34%. It tied the cut to about $130 million of federal Dedrone deployments. The same release committed about $1.2 billion to Skydio at a $5.2 billion pre-money valuation, taking Axon's stake to 37%. Part of the check buys out existing Skydio holders, a partial exit without an IPO. Axon lost more than $5 billion of market value Friday. A private mark went up and a public one went down in the same press release. 3. Tech bounced. Bitcoin slipped under Strategy's cost. The Nasdaq rose about 1.3%. Bitcoin edged lower near $75,700 and touched about $75,070, below the $75,451 average cost Strategy (MSTR) last reported. Coinbase (COIN) hit $131.55, a 52-week low. The rebound skipped bitcoin and Coinbase even as AI-pivoting miners jumped. Strive bought 15,124 bitcoin in October with preferred stock paying 15%. A December hike raises the cost of holding an asset that pays nothing. 3 SIGNALS FOR THE WEEK AHEAD 1. Israel's president picks Sunday. Kalshi's contract on Gadi Eisenkot becoming prime minister jumped 16 points Friday morning and gave every point back. It traded near 54 cents late Friday. Polymarket's differently worded contract held near 67 cents. President Herzog names who gets the first chance to form a government on Sunday. What it could change: Monday's prices show which venue was reading the politics and which was reading a thin order book. 2. Constellation and NRG before Monday's open. Constellation is expected to earn $3.90 a share and NRG $3.35. Both rallied with Vistra Friday. What it could change: if two more generators say next year is largely sold, the power selloff was priced on years still open. 3. CPI Tuesday, with auctions on either side. October consumer prices land Tuesday at 8:30 a.m. Treasury sells $58 billion of 3-year notes Monday, $42 billion of 10-year notes Tuesday and $25 billion of 30-year bonds Thursday. The bond market is closed Wednesday for Veterans Day. What it could change: at 78 cents, the hike contract leaves little room for a hot print. A cool one would test whether Friday's repricing outran the wage data. Now, to the bet that came back faster than the stocks. The SipThe Fed bet bounced back in a day. The chip stocks didn't.On Thursday the semiconductor index fell about 12%. As stocks slid, Kalshi's December hike contract fell from about 80 cents to 62. Friday morning, the Labor Department said employers added 165,000 jobs in October. That was more than two and a half times the 59,000 to 65,000 economists expected. August and September were revised up by a combined 84,000. Within seconds of the 8:30 a.m. release, the contract jumped from 71 cents to 77. By afternoon it was at 78. The chip index was up nearly 4%. That is more than a quarter of Thursday's loss. What the round trip saysThe round trip suggests stocks, more than the economy, drove Thursday's drop in hike odds. One caveat: part of Friday's gain came before the number was public. The contract jumped from 65 cents to 73 about 37 minutes ahead of the release, and the trade data show no cause. That distinction matters for the AI trade. On Thursday the selloff partly softened itself, because falling stocks lowered the odds of tighter money. Friday took that cushion away. Chipmakers now carry policy risk from the election and rate risk from the Fed at the same time. The fine printThe headline was hot. The wage bill was not. Average hourly earnings rose 3.1% from a year earlier. The number of people working part time who wanted full-time work rose by 339,000, driven by cut hours. Third-quarter productivity grew at a 3.6% rate while unit labor costs fell 0.7%. FROM OUR SPONSORS The REAL Reason Trump Is Invading Iran
For a moment… Forget about Trump’s ties to Israel. Forget about reports of Iran’s nuclear program. Because my research has led me to believe we’re risking World War 3 with Iran for a completely different reason. Click here to find out what it is. If you have even a single dollar invested in the U.S. stock market, this is going to directly impact you. Discover the reason here. The Fed is split on what that means. Cleveland Fed President Beth Hammack said Thursday that policy "will need to move to a restrictive stance." New York Fed President John Williams said Friday it was an "appropriate time to accumulate more information." One reading of the data: if wages aren't pushing inflation, the case for a hike rests on energy, with Brent near $98. The bounce was choosyMicrochip (MCHP) fell about 11% after reporting. Its forecast is flat from here, and about $53 million of September sales won't repeat. Cloudflare (NET) rose about 11% after reporting 39% revenue growth. AMD (AMD) gained about 10% while Broadcom (AVGO) barely moved. This morning we said that if beats got paid and cuts got punished, stock-picking was back. It was. What settles itTuesday's CPI, the November jobs report on Dec. 4 and the Fed's decision on Dec. 9. At 78 cents, the contract already leans heavily toward a hike. Chips no longer get help from bad days. The Market Sips TakeawayFriday took one worry off the table and left another on it. Rates are back to pricing a hike. AI stocks still carry the election. - What would confirm it: the hike contract holds above 75 cents after CPI while chips keep lagging the Nasdaq.
- What would break it: a cool core CPI that pulls the contract back into the 60s and gives chips their cushion back.
- Where it shows up next: power producers. Vistra says 2027 is about 98% hedged. Constellation and NRG on Monday show whether that is the industry or one company.
The jobs report didn't end the chip selloff. It ended the idea that the Fed would cushion it. UNTIL THEN, SIP SLOWLY! The Market Sips Desk If the Fed hikes in December, do you buy the chip dip or wait for CPI to cool first? Hit reply. AI Found the Target. AI Designed the Drug. Now It's in Phase III.For years, AI drug discovery had a problem. Plenty of models. Very few medicines.
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