Oil pulled back Friday. Delta still expects its fuel costs to rise by about $6 billion.
Brent traded above $100 on Thursday and was still near $103 to $104 on Friday. A Stock Tweets digest said the pullback helped major US indexes rise Friday. Kalshi Finance reported that the S&P 500 and Nasdaq 100 recorded their highest weekly closes on record.
Delta’s numbers show why one better day for stocks does not settle the fuel story.
Delta’s Costs Are Already Rising
Delta cut its 2026 adjusted profit forecast to roughly $5.10 to $5.60 a share, down from $6.50 to $7.50. Its third-quarter fuel expense jumped 62%.
More fuel supply is coming. President Donald Trump said Russia would supply more than 4 million tons of diesel under a deal with President Vladimir Putin. Another 3 million tons depends on the condition of Russia’s refineries. The Treasury Department temporarily waived sanctions on Russian diesel through April 2027.
Ukrainian President Volodymyr Zelenskyy condemned the deal. He warned that easing sanctions without a Russian commitment to de-escalate would prolong the war. China is also resuming limited October fuel exports of roughly 3.7 million tons, according to the Stock Tweets digest.
Oil routes face a risk in the other direction. The speaker at @geopoliticaleconomyreport warned that a renewed Saudi war in Yemen could further threaten them. He said Pakistan has troops in Saudi Arabia helping attack Yemen and that Turkey has announced military support for Saudi Arabia.
By his account, about 8% of the world’s traded oil passed through the Bab al-Mandab Strait each day before the renewed war. He described disruptions across that route, the Strait of Hormuz, and the Suez Canal as affecting 37% of globally traded oil supply. He also said a tanker trip from Saudi Arabia to East Asia cost $1.3 million per day, up from about $60,000 per day. Those are his estimates of the exposure.
Inflation and Bond Yields Add Pressure
Fed Governor Christopher Waller said more rate hikes are likely needed to bring inflation back to 2%, though the timing is flexible. Preliminary October consumer sentiment fell to 46.3. Year-ahead inflation expectations rose to 4.7% from 4.6%.
Higher fuel costs and expectations of more inflation leave the Fed with less room to ease.
Bond yields give investors another number to weigh. Bren Talkington said seven-year investment-grade corporate bonds were yielding over 6%, while comparable municipal bonds yielded over 7% for investors in the highest tax bracket. She said about $8 trillion remained in money markets.
Pimco’s Dan Ivascyn warned that the 10-year Treasury yield, recently near 5.2% to 5.3%, could reach 6%.
AI Spending Still Needs to Show a Return
The speaker in the JPM Guide to Markets video cited Wall Street Journal figures of $1.5 trillion in hyperscaler spending commitments, plus $900 billion in leases.
The financing talks are large too. The Investor Channel speaker said Broadcom was in talks for $50 billion of financing deals to fund OpenAI’s custom chips. He also said SpaceX needed $40 billion from Apollo to buy Nvidia chips.
Even the revenue figure being used for OpenAI is disputed. The same speaker said a Financial Times report put its annual recurring revenue closer to $50 billion, compared with a reported $70 billion. He said the $20 billion difference went to companies such as Microsoft and Amazon through their cloud platforms.
What does the spending earn? Tom Lee said AI spending is worthwhile if it produces a return on capital, but that some has been wasted. He thinks it may take a couple of years to know whether large companies can show that return. An X post cited fewer new data center projects and falling construction spending as a sign AI spending could peak, then questioned whether demand would fall as models improve.
That answer matters beyond the companies spending the money. The JPM video speaker said the top 10 stocks make up 41% of the S&P 500. Mark Newton said technology represents 30% of the index and that, without it, the S&P would have been down about 5 to 6% in September.
SpaceX’s Mobile Plan Has a Coverage Question
SpaceX said it agreed to acquire nationwide 800 MHz spectrum. It says that spectrum would improve indoor coverage, including through walls and other obstacles. AT&T’s CEO said Starlink Mobile would not be able to penetrate walls.
The FCC approved SpaceX’s next-generation constellation of 15,000 satellites. SpaceX says it will deliver over 100 times the bandwidth of its current satellites. It plans to combine satellites with ground infrastructure for service indoors, outdoors, and in cellular dead zones, once approved by the FCC.
Carrier shares fell after the announcement. The Investor Channel speaker put T-Mobile down 13%, AT&T down nearly 10%, and Verizon down 9% that day. Whether SpaceX’s network delivers the coverage it claims is still an open question.
Elsewhere, Apple’s October iPhone 18 Pro component orders were reportedly cut by at least 15% from the original requests. The Investor Channel speaker offered earlier overordering or softer sales as possible explanations. The cut alone does not settle which is right.
Amazon confirmed layoffs of about 1,000 corporate roles. The Investor Channel speaker said Waymo received $5 billion in debt funding from outside lenders and plans to offer driverless rides in Detroit.