U.S. inflation data due at 21:30 Beijing time will give markets an unusually incomplete reading on price pressures after the 43-day federal government shutdown disrupted the Bureau of Labor Statistics' October data collection. The October Consumer Price Index report will include monthly changes but no official 12-month headline or core CPI figures, placing greater weight on the month-on-month core reading as traders assess the Federal Reserve's next move.
Economists expect headline CPI to rise 0.3% in October from September and core CPI, which excludes food and energy, to increase 0.2%, according to the consensus figures provided ahead of the release. Those estimates would mark a cooling from September, when headline CPI rose 0.6% month-on-month and core CPI climbed 0.3%.
The missing annual comparison removes one of the market's standard reference points. September's figures remain the latest official year-on-year readings, showing headline CPI up 3.7% and core CPI up 2.6%. Without an October annual figure, a 0.2% or 0.3% monthly change in core prices could carry more influence over interest-rate expectations than it normally would.
Core services prices will draw close scrutiny
Gasoline price declines are expected to restrain the headline CPI result, which could make the broader inflation number look softer even if underlying services costs remain firm. Markets will focus more closely on housing, transportation services and other categories that tend to move gradually and have been harder for policymakers to bring down.
A 0.2% monthly core increase would be consistent with moderating underlying inflation, although one month of data would offer limited clarity after the collection disruption. A stronger reading could revive concerns that service-sector prices are proving resistant to tighter financial conditions.
Labor data has already complicated the rate outlook. October nonfarm payrolls increased by 165,000, above market expectations cited in the supplied data. Stronger hiring gives the Federal Reserve more room to maintain restrictive policy if inflation does not cool as expected, since officials would be less concerned that higher borrowing costs are causing an abrupt deterioration in employment.
Bank of America and Morgan Stanley project one rate increase in December and another in March, leading to a terminal federal funds rate range of 4.25% to 4.5%. The October CPI release will test whether that path remains plausible, particularly because the absence of annual inflation data leaves markets with a narrower set of official signals.
Higher Treasury yields and expectations for restrictive rates tend to pressure speculative corners of financial markets, including technology shares and digital assets. The effect is indirect but familiar: higher yields increase the return available from government debt while raising the cost of financing for companies whose valuations depend heavily on future growth.
CoreWeave earnings will test the AI financing story
The inflation release will arrive as markets also assess a very different measure of financial strain: the cost of funding the rapid expansion of AI computing infrastructure. CoreWeave is scheduled to hold its third-quarter earnings call around 6:00 Beijing time, with attention likely to center on interest expense, capital spending and the pace at which new contracted capacity is becoming operational.
CoreWeave's third-quarter guidance called for revenue of $3.45 billion to $3.60 billion, interest expense of $860 million to $940 million, and adjusted operating profit of $200 million to $260 million. At the midpoint of those ranges, quarterly interest expense would reach about $900 million, nearly 3.9 times the projected $230 million in adjusted operating profit.
That relationship illustrates the financial demands behind the company's expansion. Revenue growth can support long-term infrastructure investment, but high interest costs leave little room for execution setbacks, customer delays or changes in financing conditions.
In the second quarter, CoreWeave reported revenue of $2.575 billion, up about 112.5% from a year earlier. The company recorded a GAAP operating loss of $49 million and $640 million in interest expense, while adjusted operating profit totaled $128 million. Its adjusted EBITDA reached $1.51 billion, a figure that measures earnings before interest, taxes, depreciation and amortization and therefore excludes a major cost facing a heavily indebted infrastructure operator.
Capital spending remains far above operating cash flow
CoreWeave reported $9.4 billion in second-quarter capital expenditures and approximately $14.1 billion for the first half of the year, based on its cash flow statement. Operating cash flow during the first half totaled about $3.66 billion.
The gap reflects the economics of building AI data centers: companies must secure land, power, networking equipment and large volumes of advanced computing hardware before much of the associated revenue can be recognized. CoreWeave said it had 1.5 gigawatts of active energized power capacity at the end of June and about 3.7 gigawatts of contracted power.
The company also reported a revenue backlog of roughly $104 billion at the end of June and said it added more than $25 billion in new customer commitments early in the third quarter. Those commitments offer visibility into potential demand, but the scale of the buildout means CoreWeave must continue converting contracted capacity into operating infrastructure while managing substantial borrowing costs.
Credit markets have shown more caution than equity markets. CoreWeave's 8.5% dollar bond due in 2032 recently traded near 71 cents on the dollar, according to the market figures provided, while unsecured yields rose from around 10% to about 15% and five-year credit-default-swap spreads moved above 1,100 basis points. A CDS is a derivative used to hedge against a borrower defaulting on its debt; wider spreads generally indicate higher perceived credit risk.
Goldman Sachs said in a recent credit-market note that chip-sector CDS spreads had exceeded those of large cloud operators for the first time in three months. The repricing suggests that concerns around AI spending are extending through the hardware and infrastructure supply chain, rather than concentrating only on companies that operate cloud platforms.
Microsoft has also been reassessing parts of its external AI capacity planning, CNBC reported on Nov. 6. The report said Microsoft had favored its own data-center resources, exited a U.K. Nscale site and did not renew a related Texas contract. CNBC did not identify which suppliers might be removed from Microsoft's partner list.
The coming session will therefore combine two forms of risk assessment: whether U.S. underlying inflation is easing and whether debt-funded AI infrastructure expansion can sustain its pace under elevated financing costs. A softer monthly core CPI result could ease pressure on rate expectations, while CoreWeave's updated interest expense and capacity figures will show how much financial flexibility remains behind one of the sector's fastest-growing buildouts.
For deeper context on shutdown fallout and inflation, explore this detailed macro-crypto impact breakdown today.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
