Stocks are lower at midday, with the Russell 2000 down over 1%, while crude pulls back from this morning's highs and the 10-year yield climbs to 5.30%.

Energy (XLE) is at the top of the leaderboard with the more defensive sector of Consumer Staples (XLP) as the runner up, led by nicotine names like Philip Morris (PM) and Altria (MO) after Imperial Brands (IMBBY) said it remains on track for its full-year targets and launched a fresh buyback. Meanwhile, Health Care (XLV) is lagging, with its largest holding, Eli Lilly (LLY), giving back yesterday's gains. On the policy front, the industry's top lobby group, Pharmaceutical Research and Manufacturers of America, sued the Trump administration yesterday over the most-favored-nation drug pricing rule for Medicare. Utilities (XLU) are also lagging as nuclear names take a breather following a recent run-up.

The AI Revolution Continues

Anthropic released their new and improved budget model, Haiku 5.5, yesterday afternoon. It shows a giant leap in improvement over their prior lowest cost model, Haiku 4.5, and is even cheaper.

Also on the AI front, Cogent launched Attack Path Analysis, which uses its frontier cyber models to map the routes a human or AI attacker could take to a company's most valuable systems and pinpoint the single fix that cuts off each path. The launch follows July's incident in which roughly 700 AI agents in an OpenAI internal evaluation chained together several small weaknesses at Hugging Face to reach 136 production keys.

Oracle (ORCL), Broadcom (AVGO), and SpaceX (SPCX) are seeking blockbuster debt deals worth tens of billions of dollars apiece to pay for AI chips, with Apollo (APO), Blackstone (BX), and Goldman Sachs (GS) among the lenders in talks. Broadcom's financing, still in early talks with a deal expected before year-end, could fund several gigawatts of capacity under its 10 GW custom chip partnership with OpenAI.

Economic Data

Initial jobless claims dipped to 197K, below the 200K consensus and the prior week's 199K, keeping layoffs near historically low levels. Continuing claims edged up to 1.72M, slightly above the 1.71M consensus.

Additionally, the Atlanta Fed's GDPNow model trimmed its third-quarter real GDP growth estimate to 3.6% from 3.7% after this morning's wholesale trade report lowered the expected contribution from inventory investment.