The Fed Chair Said Nothing | Lenders Charged More for AI | Hormuz Flows Fell a Third | A Hike Bet Halved

Stock futures were mixed and quiet on Friday after the Fed chair passed on a chance to signal a hike.

S&P 500 futures edged up about 0.1% early Friday, while Dow futures were little changed. Nasdaq-100 futures slipped about 0.1%. The 10-year Treasury yield closed Thursday at 5.10%, down 9 basis points. Brent was little changed above $105, gold rose about 0.8% to near $4,200, and bitcoin traded near $82,700.

Seoul's Kospi rose 2.05% on Friday, a day after it fell 7.6% and tripped circuit breakers. Index provider MSCI (MSCI) adopted rules after Thursday's close that bar "non-operating" companies from its global benchmarks. The rules could push out bitcoin-treasury firms such as Strategy, and the list of affected companies is due Nov. 11.

The chair said nothing. Traders heard plenty.

Fed Chair Kevin Warsh gave no hint of his next move in his last scheduled remarks before the Fed's quiet period.

Warsh declined to signal the Oct. 27-28 meeting, hours after producer prices posted their biggest jump since 2022. At an IMF event in Bangkok, he said he does not "prejudge meetings." Cleveland Fed President Beth Hammack warned Thursday of an "inflationary mindset." If one takes hold, the Fed "might need to move even more," she said. Futures traders cut the odds of an October hike to 15% to 17%, from about 30%, Bloomberg reported. The blackout starts Saturday. Import prices for September are due at 8:30 a.m.

A senior Treasury official also said in Bangkok that Japan's deflation is over and the yen's level must change. Under Secretary Erin Browne warned that "sharp, disorderly currency moves" can force investors to unwind positions. The dollar held near 158 yen. The Bank of Japan meets Oct. 29 and 30.

Silence Before the Blackout

Warsh passed on the last scheduled chance to prepare markets for an October hike. Futures traders moved toward a hold, even after a week of hot inflation data. No Fed official will speak publicly before the meeting to correct that reading. A Treasury official also said Japan's currency level and monetary policy must change. The yen ignored the words, with U.S. yields still far above Japan's.

Lenders charged more for AI risk this week, while a software buyout priced like a near-certainty.

Two big banks had to sweeten a $5 billion loan for Volta, an AI data-center builder, to sell it, Bloomberg reported. It priced at 650 basis points over SOFR and 95 cents on the dollar, against initial talk of 625 to 650 and 97 to 98 cents. The yield ended above 11%, and the loan is unrated. The banks underwrote only the $1.3 billion lease tranche and sold the $3.7 billion chip loan on a best-efforts basis.

Proofpoint, owned by Thoma Bravo, agreed to buy Varonis for $49.75 a share in cash. Before the open, the stock traded about 2.5% below that price. The deal has committed equity and debt, and no financing condition. At that gap, a buyer earns about 3.6% a year if the deal closes at the end of June. The one-year Treasury yield closed Thursday at 4.49%.

Certainty Has a Price

Investors objected that the Volta loan was unrated, large and from a first-time borrower, Bloomberg reported. Varonis comes with committed financing and a $423.3 million reverse breakup fee. The Volta loan yields more than 11%, while the Varonis spread pays less than a one-year Treasury if the deal closes in June. The gap tracks how sure investors are of getting paid, more than the sector. If Volta's loan trades below 95 in the secondary market, the price of AI credit is still rising.

Oil supply thinned on two fronts, and Brent barely moved.

Flows through the Strait of Hormuz fell to about 11.6 million barrels a day last week, Kpler data showed. That is roughly a third below the firm's baseline. International Energy Agency members agreed to release "over 20 million barrels of diesel as soon as possible." That is less than the 50 million considered earlier, a person familiar with the talks told Reuters. Reported ship attacks near Hormuz reached 12 from Oct. 5 to 11, UK maritime data showed. That was the most in any week since the war began. Brent has closed between about $104 and $107 since Oct. 8.

J.B. Hunt (JBHT) grew third-quarter revenue 20%, to $3.68 billion. About $285 million of the gain came from fuel surcharges, and operating income rose only 2%. Its operating ratio worsened to 93.3% from 92.1%, and the shares slipped about 1.4% after hours.

Fuel Bills, Thin Margins

Fewer barrels are moving through the Strait, and the diesel cushion came in small. Truckers pass fuel costs on through surcharges, which lift revenue more than profit. J.B. Hunt's quarter shows that pass-through at work. If diesel stays tight, surcharges keep swelling freight bills without widening margins. A Brent move above $107 would signal traders are rebuilding the risk premium.

Kalshi's October rate-hike contract fell by about half overnight after Warsh declined to commit.

It traded at 28 cents before he spoke and near 13 cents early Friday. Polymarket's contract on a U.S. announcement ending the naval blockade of Iran by Oct. 31 fell as low as 4.5 cents overnight. It had traded at 6.5 cents Thursday afternoon and was near 5.5 cents early Friday.

Timing, Not Proof

The Fed contract barely moved on the hottest wholesale print in four years. It fell within minutes of the chair's remarks, during Asian trading hours. The blockade contract pays only on an official U.S. announcement, not on ships moving through Hormuz. Neither price is evidence of the outcome.

Friday opens with the Fed going quiet and markets filling the silence.

The chair gave no signal, and hike bets fell by about half. Lenders charged more for an AI loan, while a software buyout priced like a near-certainty. Oil flows through Hormuz ran a third below Kpler's baseline, and Brent held above $105. Import prices at 8:30 a.m. are the next test.

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