Yields Are Pulling Back. Oil Is Falling. The Week Ends Better Than It Started.

S&P futures are up 0.4%. Nasdaq futures are up 0.7%. The 10-year yield pulled back slightly to 5.18% after touching 5.225% Thursday night. WTI is down more than 2%, falling back toward $92 as the Hormuz phased deal report circulated further.

The week ends with the 10-year yield up 16 basis points from where it started, the biggest weekly move since April 2025. The 30-year hit 5.5% Thursday before retreating. Thirty-year mortgage rates hit 7.45%, the highest since April 2024.

The dollar's five-day winning streak is breaking this morning. Morgan Stanley reversed its 2026 dollar call entirely, noting they were wrong about dollar weakness and now forecast a strengthening dollar into 2027 on a hawkish Fed and European political risk.

Market Implication

The relief today is real but narrow. Yields are not falling, they are just not rising as fast. The Dow is heading for its fourth straight losing week. The S&P and Nasdaq are posting weekly gains carried almost entirely by AI names and the Hormuz diplomacy trade.

Akamai Signed an $11.6 Billion Seven-Year Compute Deal With Anthropic.

Akamai Technologies (AKAM) surged more than 20% in premarket after announcing a seven-year, $11.6 billion agreement to provide computing infrastructure for Anthropic. Akamai also issued a warrant giving Anthropic the right to buy up to roughly 5% of the company's shares at $111.33 each.

Akamai is primarily known as a content delivery network. This deal repositions it as an AI compute provider, running AI accelerator hardware for one of the three largest AI labs in the world. It also gives Anthropic a significant stake option in a publicly traded infrastructure company.

The deal is notable for what it is not. It is not Nvidia hardware. Akamai specifically described using AI accelerators it calls "CPUs," suggesting an architecture built around non-GPU compute. That is a direct signal that the AI buildout is diversifying away from Nvidia as the only viable accelerator path, exactly one session after Oracle invoked force majeure on a data center project citing construction cost risk.

Structural Setup

Watch Anthropic's next infrastructure disclosure. If Akamai's accelerators handle real training or inference workloads at scale, it validates the non-Nvidia AI compute thesis. If Akamai is handling edge or CDN-adjacent workloads, the headline is large but the compute shift is limited.

Costco Beat. The Consumer Is Not Broken Yet.

Costco (COST) reported fiscal Q4 adjusted earnings of $6.60 per share on $95.72 billion in revenue, beating estimates on both lines. Membership fees came in at $1.85 billion, slightly below forecast. Shares were marginally lower premarket despite the beat.

After two straight sessions of restaurant traffic warnings from McDonald's (MCD) and Darden (DRI), Costco's clean beat is the pushback the market needed. Costco's customer skews higher income and bulk-buying. The company is not immune to consumer pressure, but it is the last place that pressure shows up.

The beat lands into a specific setup. National average gasoline prices hit $4.48 Thursday, up from $3.16 a year ago. Mortgage rates are at 7.45%. The consumer is being squeezed from multiple directions simultaneously. Costco beating on revenue and earnings in that environment is a signal that the top end of the consumer cohort is still spending.

The slight miss on membership fees is the one number worth watching. Membership is Costco's recurring revenue base. A miss there can signal slower new member acquisition.

Sector Read

Two restaurant chains said traffic is falling. Costco said revenue is rising. The consumer story is not binary. It is splitting along income lines faster than the headline numbers suggest. Watch whether Costco raises its membership fee in the next 12 months. That decision will tell you whether management thinks consumer resilience is durable.

Xi Told Trump the US and China Should Cooperate on AI. Every Major Tech CEO Was in the Room.

At Thursday's White House state dinner for Xi Jinping, the guest list read like the Nasdaq 100's board of directors. Jeff Bezos, Mark Zuckerberg, Jensen Huang, Tim Cook, Elon Musk, Sam Altman, Satya Nadella, Sergey Brin, Sundar Pichai, Sanjay Mehrotra, Cristiano Amon, and Michael Dell all attended.

Xi told Trump in their Oval Office meeting that the two countries should "continue AI dialogue, exchange views on risks and benefits, and together guard against the misuse or malicious use of AI." The trade truce extension to January 10 was already announced. The AI cooperation language from Xi is new.

The guest list tells you what the dinner was really about. The US-China relationship in 2026 runs through AI infrastructure, semiconductor supply chains, and rare earth materials. Every executive at that table has a direct exposure to at least one of those three issues.

Watch Signal

Watch for any follow-on announcements from the tech executives who attended the dinner. A bilateral AI safety dialogue framework between the US and China, if formalized, would directly affect how companies like Anthropic, OpenAI, and Google deploy models in Chinese markets and how Chinese AI companies operate in the US.

The Bond Selloff Paused. But the 10-Year Is Still Up 40 Basis Points This Month.

The 10-year yield hit 5.225% Thursday night before pulling back to 5.18% this morning. The 30-year touched 5.5% before retreating. Both are still near multi-decade highs.

Economist Eric Winograd put the Fed's problem in one sentence. "You're really going to have to crush everything that isn't AI, if AI refuses to slow down." The Fed's standard tools work by raising the cost of borrowing for rate-sensitive sectors. Housing, autos, and consumer discretionary compress. AI data center buildout does not.

Germany's consumer confidence fell to its lowest since April. Energy costs are destroying purchasing power in Europe. The ECB faces a version of the same problem the Fed does, with the added complication that European fiscal positions are deteriorating. France's 10-year yield hit a post-financial-crisis high this week.

The Read

The pause in yields this morning is oil-driven. If the Hormuz phased deal gets officially confirmed, WTI falls, yields fall with it, and the rate picture for October looks less severe. If the deal stays unverified through the weekend, yields resume next week where they stopped.

Economic Data: Durable goods preliminary report today | University of Michigan final consumer sentiment today

Fed Speakers: No scheduled speakers today

Earnings: No major earnings today

Xi Summit: Continues through Friday

Overnight: Nikkei +1.3%, Hang Seng -1.2%, China closed, DAX +0.8%, FTSE +0.4%

The Week Ends With Yields at 19-Year Highs and AI Deals Getting Bigger.

Akamai just landed the largest single compute contract in the AI buildout since the war began. Costco confirmed the top end of the consumer is still spending. Xi told the assembled leadership of American tech that cooperation on AI is possible.

The week also saw the 10-year climb 40 basis points for the month. Mortgage rates are at 7.45%. Restaurant traffic is falling at two of the biggest chains in the US.

Durable goods prints this morning. Michigan sentiment follows. Both land into a market trying to decide whether the AI trade can hold up if everything that is not AI keeps getting squeezed by a Fed that is not done hiking.