Tesla Jumps on a Roadster as Tech Slips Into the Weekend

Dear readers,

Yesterday’s question was who can still pay for the AI buildout. Today’s market offers a partial answer: investors are paying for things they can see and touch, and they are cooling on bets that depend on falling rates and rising expectations. Tesla is up on a car show. The AI heavyweights still can’t get going. The Nasdaq is on course for a weekly loss of a little more than 2 percent, while the Dow is heading for a gain. It looks like a rotation.

Tesla: A Good Show, With the Numbers Due Wednesday

Tesla gained 3 to 5 percent in premarket trading Friday, after Elon Musk unveiled the new Roadster on Thursday. The car uses cold-gas thrusters from SpaceX and hit 60 miles per hour in 0.81 seconds in a test. Production is slated to start in 2028. Reservations cost $50,000 for the Performance version and $250,000 for the Thrust version.

The engineering impresses, but the headline specs are more modest than once promised. Range is now “over 300 miles,” against 620 miles in 2017. Top speed is listed as “over 230 miles per hour,” where the earlier pledge was over 250.

So the Roadster buys attention, not revenue before 2028. What matters is the quarterly report on Wednesday, October 21. The stock closed Thursday at $362.44 and is down roughly 19 percent for the year. Third-quarter deliveries of 486,532 vehicles beat expectations but came in just below the prior year.

Tesla is also ending Model S and Model X production and leaning on Cybercab, Optimus and the volume models, the 3 and Y. Without earnings to back it up, Friday’s jump is an advance on results not yet delivered.

Barclays analysts add a wilder strand, speculating about a merger with SpaceX that could come before the next annual meeting. The biggest hurdle would be shareholder approval.

Rates: The Fed Question Moves to December

US producer prices rose 1.3 percent in September from the prior month and 6.3 percent from a year earlier. That is the biggest monthly increase since March 2022. The Fed raised rates in September for the first time in three years, to a range of 3.75 to 4.00 percent. Consumer prices are running at 3.7 percent.

Even so, the probability of another hike at the October 27-28 meeting has fallen to about 15 percent. Fed Chair Warsh gave no hint in Bangkok of an imminent increase. For December, futures markets see a 25-basis-point hike as very likely. The yield on the 10-year Treasury remains above 5 percent.

That explains why rate-sensitive growth stocks are struggling while broader parts of the market hold up. On Thursday the equal-weighted S&P 500 gained more than four times as much as the Nasdaq. BofA strategist Michael Hartnett advises cutting risk over the next three to four weeks. He avoids tech and favors small caps, real estate and consumer cyclicals.

A diversified portfolio will barely feel the rotation. Anyone whose holdings are mostly Nasdaq heavyweights should keep the December expectation in view.

AI Agents: Security Becomes a Business of Its Own

ServiceNow unveiled its “AI Passport” this week, with Nvidia as launch partner. It gives AI agents a cryptographic identity and can stop them at runtime. It also detects unapproved AI use across more than 400 integrations and adds cost controls.

Launch is planned for the fourth quarter of 2026. The stock closed Thursday at $148.57, up 6.1 percent, and was trading a little more than 1 percent higher Friday. Over twelve months it is still down about 18 percent.

Should investors sell immediately? Or is it worth buying Tesla?

The need is documented. According to a banking index, every bank uses AI, but only 24 percent have adequate rules for it. Gartner expects more than 150,000 AI agents per Fortune 500 company by 2028, up from fewer than 15 in 2025.

CrowdStrike published research that shows where the risk sits. Of roughly 515 direct attempts to get around safety filters on language models, not one succeeded. But when attackers combined requests that were harmless individually, working malicious code emerged in 9 of 10 tested attack categories.

Checking requests one at a time is not enough. On top of that comes the malware “Aoki,” which lifts credentials and session data from tools such as ChatGPT, Claude and Codex.

The flip side is cost. According to an industry survey, AI products reach only about 52 percent gross margin, while classic software subscriptions earn around 80 percent. The likely winners are vendors that sell governance. Pure feature providers face margin pressure.

Bitcoin: The Floor Holds, but the Buyers Are Missing

Bitcoin trades around $82,000, or about €73,200. On Thursday it briefly dropped to just under $79,700. Glassnode reads the selling at a loss near $80,000 as a possible local bottom. The ETF cost basis sits at about $81,500, so the price is hanging right on that threshold.

Demand remains weak. US bitcoin ETFs have seen roughly $760 million of outflows since October 7, after $3 billion of inflows before that. Friday also brings the expiry of 18,000 options, with the “max pain” price, where option buyers lose the most, at $83,000.

Among altcoins, Zcash and Celestia stand out. Zcash gained 11 percent. Celestia rose 16 percent to a yearly high near $0.68. Starknet lost almost 10 percent.

Strategy shed about 3 percent in premarket trading because new MSCI rules for digital-asset holdings could bring index exclusions in November. Ether and XRP, at $2,460 and $1.33, lack buying momentum. Crypto holders should treat $80,000 as the warning line.

Netflix: Cost Cuts Under New Leadership

Netflix is cutting 1,000 jobs, about 6 percent of its workforce. On October 26, Peter Rice takes over the content division from Bela Bajaria. The stock slipped 2 to 3 percent in premarket trading, after gaining 2.9 percent to $72.61 on Thursday.

It is down about 23 percent for the year. The market reads layoffs plus a leadership change as a sign that the content strategy is being recalibrated.

The Takeaway

Earnings season picks up speed next week. Meta and Tesla report on Wednesday, with Netflix, Texas Instruments and Lam Research also on the calendar. Analysts expect third-quarter profit growth of roughly 30 percent for the S&P 500. The bar is high, and with yields above 5 percent there is little room for disappointment. Ahead of the Fed meeting on October 27-28, those reports will help decide whether the rotation out of tech continues.

Have a great weekend.

Best regards,
The StocksToday.com Editorial