Meta's Swaps Set a Record | Blackstone Raised More Than It Returned | Oil Rose, Staples Rallied | Fed Hike Bets Halved

Thursday's heaviest selling was in the AI trade.

The Nasdaq Composite fell about 2.6% and the S&P 500 about 1.2%. The Dow ended little changed, the Russell 2000 edged higher and the equal-weighted S&P 500 rose 0.7%. The 10-year Treasury yield fell below 5% even as Brent hit a five-month high. The yield ended near 4.95%, and Brent ended the stock session near $113. Gold fell about 2.7% to near $4,040, and bitcoin traded near $81,400.

The selling had an address.

Most of the market lived somewhere else.

The AI selloff moved from Meta's cash flow to its credit.

The cost of insuring Meta's debt hit a record a day after a $25 billion penalty. Meta Platforms (META) fell about 7%. Third-quarter capital spending topped operating cash flow, leaving free cash flow at negative $2.12 billion. Five-year default swaps on its debt reached a record as investors weighed how much the company may borrow for AI, Bloomberg reported. On Wednesday, a New Mexico judge ordered Meta to pay $25 billion in a case tied to Cambridge Analytica. Meta said it will appeal. The penalty is a second factor, but it landed Wednesday afternoon, and the stock closed slightly higher that day. Thursday's record came after the results.

Chipmakers fell, and power and turbine stocks fell more. The iShares Semiconductor ETF fell about 7%. GE Vernova (GEV) lost about 11% and Vistra (VST) about 10%. Lam Research (LRCX) fell nearly 12%. Its finance chief said supply limits held down its December forecast and that China's sales share will fall meaningfully.

Who Pays for the Build-Out

Meta's credit moved with its stock, which puts the funding question in the bond market too. The Russell 2000 edged higher, a sign the damage was concentrated in one trade. Microsoft and Alphabet report on Oct. 28, the day the Fed decides, and Amazon the next day. Their spending plans are the next test of who funds the build-out.

Private money kept arriving, and the exits stayed narrow.

Blackstone raised $63.3 billion but cashed out less. Blackstone (BX) said assets reached $1.37 trillion, while realized performance revenue fell 38%. Holders of BCRED, its credit fund for individuals, asked to withdraw 10% of its net asset value. That is twice the 5% limit, and Blackstone paid about half. It said fourth-quarter carry already under contract will exceed all of its third-quarter net realizations. The stock rose about 8%.

Locked Money, Narrow Doors

Money is still coming in at scale. The pressure sits in funds like BCRED that promise individuals periodic exits. Blackstone's own figures show both sides in one quarter. The test is whether its fourth-quarter carry arrives as described and whether BCRED's queue shrinks.

Oil climbed on Gulf attacks, and buyers paid up for steady consumer staples.

Aramco told staff to leave its Dhahran headquarters, Reuters reported. Houthi forces claimed strikes on Aramco sites in Yanbu, which Saudi authorities have not confirmed. Brent rose about 4% in the stock session, and energy stocks slipped about 1%.

P&G held its forecast while absorbing $400 million more in costs. Procter & Gamble (PG) now expects higher costs to cut about $1.4 billion from this fiscal year's profit, up from about $1 billion. The costs include energy and freight. The stock gained nearly 6%. Consumer staples rose about 3% as a group, and utilities about 2%.

The Bid for Steady Cash

Staples, utilities and the equal-weighted index all rose as the Nasdaq fell. The pattern looks like rotation from the AI trade into predictable cash, and P&G's beat made it the easiest buy. On a day like this, a held forecast counted for more than a clean cost line.

Hike bets fell by half on one-sided trading, and the shortest ceasefire bet priced no qualifying strike.

Traders halved the odds of an October Fed hike in one session. Kalshi's quarter-point hike contract last traded at 6 cents near 4 p.m., down from 12 cents late Wednesday. Of about 184,900 contracts traded from 6 a.m. to 1:45 p.m., about 95% were initiated by traders betting against a hike. Every trade of 5,000 or more came from that side. Jobless claims fell to 194,000, below forecasts, and the Fed is in its quiet period.

The contract was at 18 cents before the Oct. 14 consumer price report and hit 55 within 40 minutes. Producer prices then posted their biggest jump since 2022. It now trades at a third of its pre-report price.

The Iran ceasefire ladder fell as the first Sirik reports appeared. Polymarket's contract on the truce holding through Thursday traded near 98.5 cents at 4 p.m. The Oct. 24 contract was near 91.5 cents, after a low of 72 cents on Wednesday. The contracts resolve No only on a U.S. strike that hits Iranian territory.

A One-Sided Tape

On 184,900 contracts, a 95% one-way tape is not thin-book noise. No Fed official spoke and the claims data pointed the other way, so the move was traders' own read. Whether that was conviction or unwinding, two hot inflation reports are now more than priced out of October.

A report put Fireblocks at $2.5 billion in talks with Visa, 69% below its last valuation.

Visa (V) is in late-stage talks to buy the crypto custody firm, Axios reported, citing multiple sources. Fireblocks called the report "not true at present time," and Visa declined to comment.

The bankers' lobby reads the new stablecoin rule's interest ban as narrower than proposed. The OCC's final rule takes effect on Jan. 18, 2027. Issuers with substantially complete applications pending by then can ask for up to 12 months of relief. The agency has not said when it will start accepting applications.

The Price of Plumbing

The stablecoin rulebook now sets the terms for who can issue and how. A card network was reported to be pricing a custody firm at a deep discount to its last valuation. If a deal lands near that price, it would show how far crypto infrastructure values have reset.

Thursday's heaviest selling was in the AI trade.

The cost of insuring Meta's debt set a record, and power stocks fell harder than chips. Steady cash found buyers. Blackstone raised money faster than it returned it. Traders halved October hike odds, nearly all from one side, with no word from the Fed.

Capital moves early. Coverage catches up. The gap between the two is worth watching.