Chips Won Back Half at the High. They Kept 30% by the Close.

The Philadelphia Semiconductor Index rose 4.2% on Friday. At its high, it had recovered about half of Thursday's 12.2% drop. By the close it had won back about 30%.

AMD (AMD) and Micron (MU), each down about 17% on Thursday, rose 11% and 5.1%.

The Nasdaq rose 1.1% and the S&P 500 0.3%, while the Dow lost 0.5%. For the week, the S&P 500 fell 2.7% and the Nasdaq 3.4%. The VIX eased to about 25.6 from 28.2.

On Thursday, chips, the two-year Treasury yield and December hike odds all fell. On Friday all three rose. The two-year added 5 basis points to 4.51%, still below Wednesday's 4.58%.

TQ Trade Implication

Chips, the two-year yield and hike odds moved in the same direction both days, so Friday's rebound came without help from easier money. A strong economy supports both earnings and the case for a hike, so a rebound built on strong data has to outrun tighter policy. That makes the chip bounce a wager that the economy can carry a December hike. If chips keep rising on the next day hike odds climb, the bounce is a growth trade rather than a relief rally.

Payrolls Beat by 100,000. Under Employed Part-Time Workers Rose 339,000.

Employers added 165,000 jobs in October, against forecasts near 65,000. Revisions added 84,000 to August and September. Unemployment slipped to 4.1%, and hourly earnings rose 0.4% for the month, a tenth above forecasts.

CME FedWatch put December hike odds at about 77% after the report, roughly 10 points above Thursday.

Underneath, the report was softer. Hourly pay was up 3.1% from a year earlier, below the 3.7% rise in consumer prices through September. The number of people stuck in part-time jobs who wanted full-time work rose 339,000 to 4.8 million. Unit labor costs fell at a 0.7% annual rate in the third quarter.

Energy prices were up 20.4% in the year through September, while core prices, which exclude food and energy, rose 2.6%. October consumer prices are due Tuesday.

TQ Edge Setup

The hiring count argues for a hike, while labor costs argue for patience. Hikes cool inflation largely by slowing hiring and pay, but pay is trailing prices and labor cost per unit of output fell. That leaves the case for a December hike resting more on energy prices than on wages, which gives Tuesday's consumer price report more weight than Friday's beat. If October prices run hot on energy while core stays near 2.6%, the 77% is pricing a hike against inflation the job market is not producing.

Axon Fell 18%. It Is Paying Up for Skydio.

Axon (AXON) fell 18.2% to $313 after touching $307, a 52-week low. After Thursday's close it reported third-quarter revenue up 28% to $909 million, below forecasts. It cut its 2026 revenue growth outlook to about 30% from 32% to 34%, after removing about $130 million of federal counter-drone deployments from this year's forecast.

Alongside the results, Axon committed about $1.2 billion to Skydio, the private drone maker, at a $5.2 billion pre-money valuation. That is about 18% above the $4.4 billion Skydio was valued at in April. Axon's stake is set to rise to about 37% from about 15%.

Most of the money goes to Skydio's current owners. The first tranche, about $255 million, bought new shares from Skydio. The rest buys existing shares through a tender offer and other purchases due by early 2027. About 40% is to be paid in Axon stock, converted at Axon's average price over ten trading days shortly before each settlement.

TQ Edge Setup

Public investors marked down the buyer the session after it marked up the private target. The stock portion is a dollar amount converted at Axon's recent average price, so the lower Axon trades, the more shares it issues for the same Skydio stake. That puts part of the cost of Skydio's markup on Axon's own holders through dilution. If Axon still trades near $313 when the tender settles, Skydio sellers who take Axon stock collect part of their premium in shares issued near a 52-week low.

Miners Rallied With Chips. Coinbase Hit a 52-Week Low.

Bitcoin ended the U.S. session near $75,700, little changed, after dipping to about $75,070. Coinbase (COIN) fell 1.5% after touching $131.55, a 52-week low.

On Thursday, crypto stocks fell harder than the coin as chips sold off, and IREN (IREN) lost 17%. Friday the miners broke from the coin and rose with chip stocks. IREN gained 20%, Cipher Digital (CIFR) 17.9%, Hut 8 (HUT) 14.6% and Riot Platforms (RIOT) 13.2%.

After Thursday's close, IREN reported that AI cloud revenue nearly tripled to $200 million last quarter, while mining brought in $28 million, about 12% of revenue. Riot rose even though mining still supplied 64% of its third-quarter revenue. As a landlord, it has signed data-center leases it says represent about $38 billion of long-term contracted revenue.

TQ Execution Bias

For a second straight session, the miners traded more like chip stocks than like bitcoin. IREN rallied with mining at 12% of sales and Riot at 64%, so the market priced AI contracts over the current revenue mix. That makes bitcoin's price the wrong yardstick for these names, so weigh them by contracted AI revenue instead. If bitcoin breaks $75,000 and the miners hold Friday's gains, the split is structural, not a one-day bounce.

• Tesla's truck line has been running far below capacity. Tesla (TSLA) rose 4.2% after Elon Musk said on X it will wind down Cybertruck production in Texas around mid-2027 "to make room for increased Cybercab production." Its third-quarter update lists installed Texas capacity above 125,000 a year for the truck and a separate 125,000-plus for Cybercab. The category that includes the truck built 7,004 vehicles last quarter, an annual pace of about 28,000. Even if every one were a Cybertruck, the line ran at no more than about 22% of capacity.
  
  
• Private credit's marks and money split. Goldman Sachs BDC (GSBD) said non-accrual loans rose to 7.3% of its portfolio at cost from 5%, and net asset value fell 3% to $11.70 a share. The stock closed 26% below that, at $8.64. Brookfield Asset Management (BAM) raised $25 billion last quarter, $12 billion of it for credit.
  
  
• Two prediction venues split on Israel's next leader. Kalshi's contract on Gadi Eisenkot becoming prime minister climbed to 73 cents on Friday from about 57, then slid into the low 50s. Polymarket's differently worded contract rose about 3 cents to near 66, leaving the venues more than 10 points apart. President Isaac Herzog is due Sunday to pick who gets the first chance to form a government.
  
  

Growth Got Bought as Hike Odds Rose

Friday's buyers went back to chipmakers and AI-linked miners even as December hike odds climbed toward 77%. The jobs report behind those odds showed strong hiring, with pay still trailing prices.

Tuesday's consumer price report tests that combination. If a hot print sends the two-year back above Wednesday's 4.58% and chips hold most of Friday's gain, the market has made room for a hike. If chips give the gain back first, Thursday's selloff was about more than the Fed.