What’s News in Markets: Tariff Fear, Delta Soars, AMD + OpenAI
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What triggered Wall Street's fear gauge this week?
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Hey, listeners, it's Saturday, October 11th. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. The stock market was chugging along this week, with indexes hitting records and shrugging off some doubts about the AI boom.
How did Delta Airlines' earnings impact airline stocks?
Then on Friday, things took a turn, a pretty steep one. US stocks gave up their gains for the week on Friday after President Trump posted on Truth Social that he may cancel a planned meeting with China's leader and threatened a, quote, massive increase in tariffs on products from China. We saw chip stocks take a tumble. So did oil prices. But do you know what was up? Good old fear. Wall Street's fear gauge, aka the SIBO market volatility index, was flying higher, with its percentage gain hitting double digits during Friday's session. All in all, the three major indexes ended the week lower. The S&P 500 fell 2.4%.
What was AMD's significant partnership with OpenAI about?
The Dow fell 2.7%. And the Nasdaq fell 2.5%. We just went over what went wrong, so to speak, in the stock market. What went right? Well, one sector that got some good news was airline stocks. We're talking about Delta Airlines, which, did you know, is the biggest U.S. carrier by market cap? If you didn't, now you do. And this week, investors were celebrating Delta's earnings and sales beat in its latest quarterly report, showing a recent recovery in travel demand. The company said it expects that demand to continue to bounce back, and it's aiming for a record holiday season.
How did tariffs affect the stock market this week?
Now, remember, this sunny outlook is a pretty big departure, pardon the pun, from earlier this year, when geopolitical tensions and tariffs weighed down demand. Delta shares gained 4.3% on Thursday, with some other airlines following suit. For instance, United shares gained 3.3%.
Next, let's check in on the AI boom, shall we? Who's the winner this week? Drum roll, please. It's AMD, aka Advanced Micro Devices, aka a chip maker looking to take on the reigning champion, industry giant, Nvidia. And AMD certainly notched a win on Monday when it announced a multi-billion dollar computing deal with OpenAI, which makes ChatGPT. The two are going to be working together on artificial intelligence data centers that run on AMD chips. OpenAI committed to purchasing six gigawatts of AMD's chips.
What are the implications of AMD's deal for the AI sector?
And no, sorry, Back to the Future fans, it's apparently pronounced gigawatts, not gigawatts. And in return, OpenAI will get warrants for up to 160 million AMD shares, roughly 10% of the company, at a cent a share, awarded in phases under certain conditions. AMD shares jumped 24% on Monday and kept gaining through Wednesday. And of course, amid Friday's downturn, the stock fell nearly 8%. But all in all, AMD ended the week in the green, with a gain of roughly 30%. Now, I'm an analog person. Sure, I love a lot of things about the digital information age, but on the whole, I was not built for it, right? I hate texting, I love typewriters, and I love getting mail, handwritten letters hand-delivered to me by a person.
And I never want to watch a film written by or starring some kind of generative AI. So I needed you guys to know that before I read this opening line that I wrote.
What other market movements were noteworthy this week?
And I'm going to try not to make it sound like a scary movie written just for me. Guys, the future of food delivery is here. And guess what? It's AI robots. Yes, CERV Robotics, the maker of AI-powered food delivery robots,
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Chapters
6 chapters
1
What triggered Wall Street's fear gauge this week?
0:00–0:56
2
How did Delta Airlines' earnings impact airline stocks?
0:56–1:38
3
What was AMD's significant partnership with OpenAI about?
1:38–2:19
4
How did tariffs affect the stock market this week?
2:19–3:25
5
What are the implications of AMD's deal for the AI sector?
3:25–4:30
6
What other market movements were noteworthy this week?
4:30–5:39