Ten companies, led by Nvidia, the AI-chip designer, and Micron, a memory-chip maker, supplied roughly two-thirds of US corporate profit growth, according to the WSJ. Their profit is someone else’s capital spending. So the market’s earnings now hang on a few budget decisions at cloud-computing giants such as Microsoft and Amazon.

Those buyers have little reason to stop. A cloud company that cuts first risks losing customers to a rival that kept building, and its shareholders punish the retreat before any savings show. But the bill comes later. Buyers spread each purchase over several years of expenses, so today’s supplier profit becomes a drag on buyers’ earnings. Spending that is rational for each buyer can still be too much for all of them together.

The Nasdaq Composite peaked on 10 March 2000, with telecom-equipment sellers like Cisco riding the carriers’ fibre-optic build-out. By October 2002 it had lost 78%, according to Nasdaq’s index data.

The Gist AI Editor

Ten companies produce two-thirds of US profit growth

Earnings concentration is now the main risk in the US market. According to the WSJ, ten companies, including Nvidia and Micron, account for roughly two-thirds of corporate profit growth. Index funds hold these firms in proportion to their size, so most investors’ returns now depend on how much AI hardware buyers keep spending. If that spending slows, profit growth for the whole market falls with it.

Trump pitches tariffs with a $4.2 billion Audi plant

At a campaign rally in Georgia, Trump said tariffs have made the US richer. He announced that Volkswagen agreed to build a $4.2 billion Audi plant in the state, according to Bloomberg. A German carmaker pays the import tax if it ships cars in, and it avoids that tax if it builds locally. Georgia gains the jobs. Volkswagen gets certainty on costs in its largest export market. Trump gets a political result to show voters.

Trade Desk’s CEO overrides investors on stock options

According to the WSJ, CEO Jeff Green used his supervoting shares to approve repricing executives’ stock options after the share price fell. Outside investors opposed the move. Repricing lowers the price at which executives can buy shares, so the options keep their value even after a fall. Supervoting shares let a founder win votes that other shareholders reject.

Saudi airline launches amid attacks on civilian aviation

The WSJ reports that violence aimed at civilian aviation has hit a new Saudi airline. The kingdom hoped the airline would support its long-term economic plans. Those plans depend on tourism, business travel and cargo hubs, all of which need safe air routes. Higher insurance costs and rerouted flights make it harder for the airline to compete.

Singapore bets on energy security

Prime Minister Lawrence Wong pledged more help for workers and households. He also said the government would step up efforts to secure energy supplies and attract investment, according to Bloomberg. Singapore imports most of its energy, so supply deals are its main economic safeguard.

Stay tuned for the next Gist—your edge in a shifting world. The Gist remains independent and reader-supported. If you value news free from corporate or state interests, consider supporting our mission with a donation.

The Saudi Airline That Launched Right in the Middle of a War
— Wall Street Journal

How Trade Desk Rescued Executives’ Stock Options From a Dive in the Share Price
— Wall Street Journal

How central bankers spend their time
— Marginalrevolution

Acrobatie du Starship, séisme à Clermond-Ferrand et des étoiles vertes inattendues
— Numerama

بلاستيك يتحول إلى ألماس.. كيف فعلها العلماء؟
— البيان

Singapore’s Wong Vows More Support for Workers, Energy Security
— Bloomberg

Serbia votes on whether students can end Vucic’s long rule

Serbia holds an early parliamentary election on 25 October after two years of student-led, anti-corruption protests, according to Deutsche Welle. Polls point to a tight race between Aleksandar Vucic’s Serbian Progressive Party and the student movement. The vote matters beyond Serbia. Belgrade balances ties with Brussels, Moscow and Beijing, and a change of government would alter who holds its energy, infrastructure and arms contracts.

Germany and partners rehearse a Ukraine ceasefire force

The “Coalition of the Willing” will run its first military exercise in November. It will take place in Poland, in the airspace over Romania and in the western Black Sea (ZDF). Germany will send about 10 staff officers, plus tanker aircraft and logistics. France and Britain lead the force, which is being built to secure a possible ceasefire with Russia. The exercise tests whether the force can operate before any truce exists. Defence contractors, especially in air refuelling and logistics, are the likely beneficiaries.

Poland and Ukraine try to defuse a dispute over the Volhynia massacre

A renewed argument over how to commemorate the Volhynia massacre has strained relations between Warsaw and Kyiv. Both governments are working to calm it, according to ZDF. Poland is a main supply route for Ukraine, so even a symbolic dispute carries logistical weight.

Energy costs are now reaching shelf prices

The ifo price expectations index, which tracks firms’ planned price rises, rose to 22.7 in September from 21.4 in August (ifo). Natural gas and power prices hit their highest since late 2022 in mid-September, and crude rose again after the Bab al-Mandab strait was blocked. Ifo expects German inflation to exceed 3% in coming months. Utilities are expected to raise household tariffs this winter.

Non-obvious angle: shale has changed who wins from oil shocks

CEPR research finds that oil supply disruptions are now much less contractionary for the US, which has shifted from net importer to net exporter. The Federal Reserve therefore faces a milder trade-off between growth and inflation. Europe, still an importer, has no such cushion.

Catch the next Gist for the continent’s moving pieces.

Serbia election: Student movement seeks to end Aleksandar Vucic’s rule
— Deutsche Welle

Höhere Energiepreise werden zunehmend weitergegeben
— IFO

Oil shocks no longer hit the US economy as they used to
— CEPR

« Le désir de dissimuler la science “indésirable” en dit long sur la pente trumpiste que dévale la vie politique française »
— Le monde

The BoM’s temperature record keeping is under attack – again. What’s going on? | Temperature Check
— The Guardian

Aktuelles zum Krieg in der Ukraine
— ZDF