MORNING BID EUROPE-Everyone loves CoreWeave

A look at the day ahead in European and global markets from Stella Qiu Just as investors ​were hoping falling oil prices had cooled inflation fears, a ​stubbornly hot US CPI report and a chorus ‌of hawkish ​Fed speak reminded everyone that the question isn't whether rates rise again, it is by how much.

Overnight core inflation landed smack on 0.3%, exactly the number Fed Governor Waller had flagged would get ‌him mulling a jumbo 50-basis-point hike in December. Two-year Treasury yields surged 18 basis points overnight, with the selling spreading to bond markets across Asia. A quarter-point rate hike in December is now fully priced in, with a 10% risk that the Fed could even hike by 50 bps. Goldman Sachs ‌was quick to call another one in March. Markets went even further to price in a third rate rise by the middle ‌of next year.

The dollar surged and the whipping boy was the Aussie, which slid nearly 1% overnight to hit seven-month lows as traders bet its central bank is done tightening after five rate hikes this year and cuts could even arrive next year. Stocks were bracing for a shaky open in Asia but proved resilient, with bubble fears flaring ⁠and fading ​almost by the hour.

CoreWeave, the firm at ⁠the centre of AI bubble fears, showed the boom isn’t short of customers. Revenue jumped 168%, sending its shares up 8% in extended trading after a 40% slide ⁠over the past month. The AI cloud company even forecast a path to profitability in the first half of 2028. Nvidia’s selloff also steadied after two days of ​steep losses wiped a stunning $430 billion off its market value, as speculation swirled over whether CEO Jensen Huang would stay on following his ⁠affair with a suspected Chinese spy.

Throw in Anthropic pressing ahead with its $1.4 trillion IPO, and risk appetite found its footing again: Nasdaq futures rallied 1.3%, lifting Taiwanese and South ⁠Korean ​shares up by 2.7% and 2.1%. SoftBank shares also trimmed early losses to be down just 1% after reporting a $7 billion second-quarter loss tied to the hefty costs of building out US data centres.

So Europe wakes up to a market that wants to have it both ways: pricing ⁠in a more hawkish Fed path while still buying the dip in AI-adjacent names on every scrap of good news. Its pan-region stock ⁠futures are up 0.6%. For now, the ⁠bulls have won the day. Whether they can hang on once the Fed meets in December and interest rates rise is the trillion-dollar question.

Key developments that could influence markets on Wednesday: (Editing by Sonali Paul)