The AI boom is starting to break time-tested stock-market signals

By Mark DeCambre

Plus: For the Fed, today's decision may be the easy part

🏦 Happy Fed Day!!

Here's something I hadn't given much thought to until recently: Could the artificial-intelligence boom be throwing off some of Wall Street's old, reliable stock-market signals?

Take, for instance, the relationship between gold and platinum prices - which has a surprisingly strong historical record of predicting stock-market returns over the 12 months that follow. Right now, it's flashing a warning for investors.

There's a catch, however: It was issuing the same warning a year ago. And it was flat-out wrong.

Could the enormous AI infrastructure build-out be changing demand for metals used in electronics and technology, and perhaps undermining the usefulness of this old market signal? I think it's a question work asking, though plenty of other forces influence gold and platinum prices.

Wall Street isn't alone in wrestling with a puzzle. The Federal Reserve has its own today: How do you solve a problem like inflation? We'll hear from the central bank later, followed by earnings from Microsoft and from Google parent Alphabet.

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Three stories worth your time ...

-- Microsoft earnings will look funky - but an elusive number is finally arriving

-- How to use I-bonds to create guaranteed, inflation-protected income in retirement

-- A hidden 'triple top' in oil price charts suggests the rally has run out of gas

On markets: Bond investors are starting to demand more to lend to AI-related companies. Along with making those companies' borrowing costlier, it raises a bigger question: How much more expensive can financing get before it starts to slow the AI build-out?

Investors still see attractive yields elsewhere in the bond market, but they're growing wary of AI-related debt after heavy borrowing this year and amid mounting concerns about future funding needs, according to Andrzej Skiba, head of fixed income at RBC Global Asset Management.

On trading: South Korean memory-chip maker SK Hynix delivered strong earnings, but its outlook may be the bigger story: It expects supply constraints to persist through 2030. That's another indication of the intensity of AI demand and its impact on the chip business, with tech stocks pointing toward opening gains Wednesday.

-- Check out our live markets coverage.

-- Follow MarketWatch's live coverage of the Fed decision.

JetBlue's runway to profits ...

??JetBlue shares (JBLU) soared nearly 20% Tuesday after the airline outlined a path to profitability. There's one important proviso: It doesn't expect to reach operating profitability until 2027 or generate positive free cash flow until 2028. The airline hasn't been profitable since before the pandemic.

Even after the best day in more than two years for JetBlue's stock, it remains on track for its worst month in six years, with shares down more than 30%. Investors appeared willing on Tuesday to buy the turnaround story. Now JetBlue has to nail the landing.

Selling is hard ...

📈You've got to know when to hold them and know when to fold them, according to Kenny Rogers. But investors don't get nearly as much advice about when to sell as they do what and when to buy. Selling is the harder part, in my opinion.

It's a question that becomes particularly important after you've spent decades building a portfolio. Do you sell because the market looks uncertain? Because an investment has done exceptionally well? Or because it's finally time to put that money to use? Genna Contino explores how to make this make this crucial decision.

A retiree's dilemma ...

The Moneyist - aka MarketWatch's Quentin Fottrell.

A retired California couple in their 70s has a dilemma: Do they pay off a mortgage that has a fixed rate of just 2.5% or build up their savings? The couple understands the trade-off - is it better to have cash in the bank or in home equity?

Fed meets the AI-powered economy ...

💽The Federal Reserve is widely expected to leave interest rates unchanged today. The December meeting could be a tougher call. Markets were pricing in a 73% chance of a December rate hike, with further increases anticipated in 2027.

The U.S. economy, meanwhile, seems disinclined to stand still.

Tuesday's durable-goods report showed a key read of business investment rising for the fifth straight month. That measure was up a remarkable 13.5% over the past year, fueled in large part by the enormous sums companies are pouring into AI infrastructure. AI spending is helping propel economic growth, with Thursday's GDP data expected to show the economy expanded at an annual rate of 3% to 4% in the third quarter.

'Most expensive year for gas prices, ever' ...

The energy boom has been spectacular for investors. For most Americans, not so much.

Consider the numbers:

-- Energy stocks have gained roughly 52% this year, versus about 13% for the S&P 500.

-- President Trump's oil-and-gas holdings have appreciated by as much as $35.8 million, according to a congressional report.

-- Americans have spent approximately $145 billion more on gasoline and diesel than at the same point last year.

-- The country could be headed for its most expensive year for gasoline, according to GasBuddy's Patrick De Haan.

The upshot: The Americans benefiting most from soaring energy stocks aren't necessarily the ones feeling the pain at the pump. That makes for a potentially combustible divide heading into the midterms.

Buy now ... pay later ...

💳"Buy now, pay later" financing used to be an easy way to spread out the cost of a Peloton or a Sleep Number mattress (or so I hear). Now people are using that option to pay for groceries and gas. MarketWatch's Genna Contino explains the shift, and the risks that come with it.

For some, installment plans are a convenient way to manage cash flow. For others, they're becoming a way to afford basics. That's a troubling development. Americans spent a record $20 billion using buy-now-pay-later financing in 2025 during the November-December holiday period, up nearly 10% from the year prior. The "buy now" part is easy. For some consumers, the trouble starts when the "later" turns into now.

About me

Mark DeCambre is editor in chief of MarketWatch. He has spent more than 20 years covering Wall Street, markets and personal finance, and writes Need to Know, drawing on the award-winning analysis and journalism of the newsroom.

-Mark DeCambre

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10-28-26 0725ET