Good morning,

Jamie Dimon sees cockroaches, but investors aren’t scattering yet.

After last week’s selloff, regional banks clawed back losses Friday despite the JPMorgan chief’s warning that “when you see one cockroach, there are probably more.”

The KBW Regional Banking Index rebounded 1.7% as analysts called the panic “overdone” and the Fed worked to soothe investors. Futures are also well in the green this morning.

Meanwhile, Wall Street is eyeing the next CPI print later this week, but coffee prices are already up 21% year-over-year thanks to tariffs hitting Brazil, Vietnam, and Colombia.

On the corporate front, BlackRock’s diving deeper into digital assets with a new stablecoin liquidity fund, while Nvidia’s exit from China is reshaping the AI calculus.

American chipmakers are losing market share as Beijing’s homegrown players like Huawei and Cambricon close the gap fast.

And in crypto land, Bitcoin’s bull run has hit a wall. 

The world’s largest cryptocurrency is testing $100K support after a wave of institutional selling wiped out $1.2 billion in positions in a single day.

It’s a big week ahead for earnings, with Netflix, Coca-Cola, Texas Instruments, and GM all set to report. Let’s dig in!

Quote of the day 

Five things to know before opening bell

🪳 Regional banks rebound after Dimon’s “cockroach” warning

The KBW Regional Banking Index jumped 1.7% after plunging 6% earlier in response to lawsuits filed by two institutions over allegedly fraudulent borrowers. Once the dust settled, analysts said the selloff looked “overdone.” Jefferies called the panic "excessive", and the Fed assured invesors the financial system can handle some defaults. Jamie Dimon begged to disagree, warning, “When you see one cockroach, there are probably more.”

🦃 Could the shutdown stretch to Thanksgiving?

DC is bracing for what could be a record government shutdown, with analysts now expecting it to drag well past Halloween and possibly into Thanksgiving. The funding lapse that began earlier this month is already among the longest in U.S. history. If it extends beyond November 4, it’ll surpass the 2018–19 record. The economic toll is adding up fast (up to $15 billion a day by government estimates) and the longer it lasts, the greater the risk of holiday travel chaos.

💰 BlackRock bets big on stablecoins

BlackRock is doubling down on digital assets with a new money market fund designed for stablecoin reserves. The Select Treasury Based Liquidity Fund will comply with the new Genius Act. The move follows reports that BlackRock recently bought $1 billion in Bitcoin, underscoring how seriously Wall Street’s banks are taking crypto.

☕ Coffee prices surge on tariffs

Retail coffee prices are up 21% year over year, driven by new tariffs on top suppliers... 50% on Brazil, 20% on Vietnam, and 10% on Colombia. Since the U.S. imports 99% of its coffee, the hit has been widespread, especially for small roasters who can’t absorb higher costs.The next CPI report lands Friday, but for now, your morning cup is already a little pricier.

📊 Earnings take center stage again

The Conference Board Leading Economic Index is due today after a drop last month, and a packed Tuesday lineup will put Wall Street's optimism to the test. Reports from Netflix, Coca-Cola, Philip Morris, Texas Instruments, Capital One, 3M, and General Motors will offer a fresh read on how both consumers and corporations are holding up in this economy.

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🪖 AI Cold War

The world’s two biggest AI powerhouses are running into a wall: geopolitics. And Nvidia is bearing the brunt of the collateral damage...  

🚫 Nvidia gets cut off
Beijing is tightening the screws on US chip imports, forcing Nvidia to pull out of China entirely. 

CEO Jensen Huang said the company’s market share there has fallen “from 95% to zero,” calling the trade fallout bad for both sides.

“I can’t imagine any policymaker thinking that’s a good idea,” he added. Nvidia now assumes “zero for China” in its financial outlook, treating any future recovery as a bonus.

But it’s not just Nvidia.

China reportedly told its top tech firms, including ByteDance and Alibaba, to stop buying Nvidia chips, even modified ones. 

Instead, companies are turning to domestic players like Huawei and Cambricon, which are closing in on Nvidia-level performance.

Micron Technology is following suit, pulling entirely out of China’s data-center market. 

📊 The road ahead

Analysts warn that losing the Chinese market could eat into US leadership in AI hardware. But China is executing a methodical plan to become self-sufficient:

• Core AI industry could hit $140B by 2030

• Including related sectors, potential 10x growth

• Profitable AI trade could emerge by 2028

• Returns exceeding 50% by 2030

• 47% of top AI researchers now in China

Shawn Kim, Morgan Stanley’s head of tech research in Asia, said China is “methodically executing a long-term strategy to establish its domestic AI capabilities.”

A trade war may slow progress, but it’s unlikely to derail China’s AI ambitions entirely.

⚠️ AI: Excuse or executioner?

Unemployment is creeping up, hiring is slowing, and layoffs are back in the headlines. And increasingly, companies are pointing the finger at AI. 

But is it really the culprit, or just a convenient scapegoat?

🧐 Experts aren’t buying it

Pick any industry and “AI restructuring” has become shorthand for cutting jobs while dodging blame. 

A few recent examples:

• Accenture told staff they must reskill on AI to keep their jobs

• Lufthansa plans to cut 4,000 roles citing AI automation

• Salesforce’s new AI agent handles roughly half of its customer support

• Duolingo is leaning into AI as it phases out contractors.
  Even Klarna CEO Sebastian Siemiatkowski partially blamed AI for the company’s 40% payroll cut

But many researchers think the AI angle is overblown. 

“Companies can use AI to make good excuses to appear innovative while hiding other reasons, like over-hiring during the pandemic," said Fabian Stephany of the Oxford Internet Institute

Meanwhile, strategist Jasmine Escalara warns this scapegoating “feeds the fear of AI,” which is only making things worse.

📊 The data tells a different story

Hard numbers show AI-driven layoffs are still rare. 

A Yale Budget Lab report found “little disruption” in US employment since ChatGPT launched. And a New York Fed survey shows the share of firms citing AI as the reason for cuts fell from 10% last year to just 1% this year.

Even if AI isn’t the main factor, uncertainty itself is dangerous. Without clarity on why the labor market is cooling, policymakers can’t act, and workers stay anxious. 

“Employees are scared because companies aren’t transparent,” Escalara said. “Now firms openly saying ‘AI caused it’ just adds fuel to the frenzy.”

The shutdown and delayed federal data doesn't help either.