Morning Bid: Everyone loves CoreWeave

A look at the day ahead in European and global markets from Stella Qiu

Just as investors were hoping falling oil prices had cooled inflation fears, a stubbornly hot US CPI report and a chorus of hawkish Fed speak reminded everyone that the question isn't whether rates rise again, it is by how much.

Overnight core inflation landed smack on 0.3%, exactly the number Fed Governor Waller had flagged would get him mulling a jumbo 50-basis-point hike in December. Two-year Treasury yields surged 18 basis points overnight, with the selling spreading to bond markets across Asia.

A quarter-point rate hike in December is now fully priced in, with a 10% risk that the Fed could even hike by 50 bps. Goldman Sachs was quick to call another one in March. Markets went even further to price in a third rate rise by the middle of next year.

The dollar surged and the whipping boy was the Aussie, which slid nearly 1% overnight to hit seven-month lows as traders bet its central bank is done tightening after five rate hikes this year and cuts could even arrive next year.

Stocks were bracing for a shaky open in Asia but proved resilient, with bubble fears flaring and fading almost by the hour.

CoreWeave, the firm at the centre of AI bubble fears, showed the boom isn’t short of customers. Revenue jumped 168%, sending its shares up 8% in extended trading after a 40% slide over the past month. The AI cloud company even forecast a path to profitability in the first half of 2028.

Nvidia’s selloff also steadied after two days of steep losses wiped a stunning $430 billion off its market value, as speculation swirled over whether CEO Jensen Huang would stay on following his affair with a suspected Chinese spy.

Throw in Anthropic pressing ahead with its $1.4 trillion IPO, and risk appetite found its footing again: Nasdaq futures rallied 1.3%, lifting Taiwanese and South Korean shares up by 2.7% and 2.1%.

SoftBank shares also trimmed early losses to be down just 1% after reporting a $7 billion second-quarter loss tied to the hefty costs of building out US data centres.

So Europe wakes up to a market that wants to have it both ways: pricing in a more hawkish Fed path while still buying the dip in AI-adjacent names on every scrap of good news. Its pan-region stock futures are up 0.6%.

For now, the bulls have won the day. Whether they can hang on once the Fed meets in December and interest rates rise is the trillion-dollar question.

Key developments that could influence markets on Wednesday:

• US celebrates Veterans Day holiday

• Germany CPI data for October

• ECB President Christine Lagarde takes part in a panel discussion in Paris

(Editing by Sonali Paul)