Market Beats | Credit-Card Data Suggest US Retail Spending Cooled in September; Pentagon Cancels Cobalt Tender; EA’s “Battlefield 6” Sells Over 7 Million Copies in Three Days; Harvard Posts $113 Million Deficit; Oracle Shares Jump as Company Reveals 35% Margin on $60 Billion AI Infrastructure Deal; US Regional Bank Stocks Plunge as Fraud Exposures Emerge

—— Credit-Card Data Suggest US Retail Spending Cooled in September; Pentagon Cancels Cobalt Tender; EA’s “Battlefield 6” Sells Over 7 Million Copies in Three Days; Harvard Posts $113 Million Deficit; Oracle Shares Jump as Company Reveals 35% Margin on $60 Billion AI Infrastructure Deal; US Regional Bank Stocks Plunge as Fraud Exposures Emerge

1. Credit-Card Data Suggest US Retail Spending Cooled in September

Private-sector indicators, including credit-card transactions and same-store sales, point to a moderation in US consumer spending last month following a vigorous stretch of summer activity.

Economists surveyed by Bloomberg had expected September’s delayed retail sales report — originally due Thursday but postponed due to the government shutdown — to show a smaller monthly gain after back-to-back 0.6% increases in July and August.

High-frequency data from banks and retailers indicate a slowdown from the 4.1% annualized pace of retail growth recorded over the prior three months. “There is a sequential slowdown from the months of June to August,” said Shruti Mishra, an economist at Bank of America Corp. “Broadly, consumers can keep spending at this business-as-usual pace into November and December.”

Bloomberg Second Measure’s analysis of card transactions found weaker demand for discretionary goods such as furniture, electronics, and appliances, while Bank of America’s credit-card data also showed softer spending.

Still, economists caution that private data often diverge from official retail figures, which are adjusted for seasonality and based on surveys of roughly 4,800 establishments.

The Federal Reserve’s latest Beige Book noted that retail spending “inched down in recent weeks,” with lower- and middle-income households increasingly seeking discounts amid elevated prices and uncertainty.

Even so, corporate leaders remain largely optimistic. “The performance of the consumer is just very, very consistent,” Wells Fargo & Co. Chief Executive Officer Charles Scharf said on Tuesday’s earnings call. “Consumer spend, week after week, is up about the same amount as we’ve seen in past months.”

Consumers and retailers alike will now be tested during the crucial holiday-shopping season, with headwinds from a cooling labor market and persistent inflation.

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2. Pentagon Cancels Cobalt Tender

The US Department of Defense has canceled a tender to purchase cobalt, marking another setback in Western efforts to strengthen domestic supplies of the vital battery metal.

The Defense Logistics Agency (DLA) had sought bids for up to 7,500 tons of cobalt over five years in a contract worth as much as $500 million — the government’s first such attempt since 1990.

After multiple extensions of the bid deadline from Aug. 29 to Oct. 15, the agency announced the tender was withdrawn. “There are outstanding issues with the Statement of Work that need resolution before offers may be solicited,” a notice posted Wednesday said. “Upon resolution, solicitation will be re-issued with a new opening and closing date.”

The cancellation highlights the ongoing difficulty for the US and its allies in reducing reliance on China, which dominates global cobalt refining and holds substantial state reserves.

Cobalt is essential for rechargeable batteries used in electric vehicles, as well as in magnets, munitions, and jet engine alloys. The US procurement plan emerged as cobalt prices rebounded sharply following export restrictions in the Democratic Republic of Congo, which produces about three-quarters of the world’s supply.

The central African nation this week replaced its full export ban with a quota system. Benchmark cobalt prices have doubled since February when the suspension began, after previously falling below $10 a pound — the lowest in more than two decades, according to Fastmarkets data.

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3. EA’s “Battlefield 6” Sells Over 7 Million Copies in Three Days

Electronic Arts Inc. sold more than seven million copies of its new Battlefield 6 title within the first three days of release — setting a new record for the long-running first-person shooter franchise.

Released on October 10 to largely positive reviews, Battlefield 6 marks a major comeback for a series that has struggled in recent years. Its predecessors, Battlefield V (2018) and Battlefield 2042 (2021), were commercial disappointments that prompted public apologies from EA Chief Executive Officer Andrew Wilson.

To revive the franchise, EA tapped Vince Zampella — one of the original creators of rival series Call of Duty — to oversee the project, uniting four studios under his leadership. Zampella’s own studio, Respawn Entertainment, is best known for developing EA’s hit shooter Apex Legends.

The blockbuster launch comes just weeks after EA announced plans to go private in a record-breaking $55 billion leveraged buyout led by Saudi Arabia’s Public Investment Fund, Silver Lake, and Jared Kushner’s Affinity Partners.

The deal, expected to close next year, would be the largest LBO in history.

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4. Ryanair Cuts 800,000 Winter Seats to Germany

Ryanair Holdings Plc is slashing its winter capacity to Germany by 800,000 seats as the budget airline escalates a dispute over what it calls excessive aviation taxes and access costs.

The Irish carrier said Wednesday it’s canceling 24 routes to nine German airports, including Hamburg, while flights to Dortmund, Dresden and Leipzig will remain suspended. The airline argued that high operating expenses make Germany “grossly uncompetitive” compared with European peers such as Sweden and Hungary, where governments have scrapped aviation levies.

Ryanair urged the German government to cut air traffic control charges, airport costs and security fees. “It is very disappointing that the newly elected German Government has already failed to deliver on their commitment to reduce the regressive aviation tax and sky-high access costs which are crippling Germany’s aviation sector,” Chief Marketing Officer Dara Brady said in a statement.

The reduction means Ryanair’s capacity to Germany this winter will fall below last year’s levels. The company has also scaled back routes to France and other countries that continue to impose aviation taxes.

Last year, it cut 1.8 million seats to three major German cities and reduced capacity at Berlin Brandenburg Airport by 20%.

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5. Harvard Posts $113 Million Deficit

KPMG LLP has laid off 195 employees from its US audit division — just over 2% of that workforce — as part of a broader effort to adapt to low attrition and evolving audit practices.

Staff were informed of the reductions earlier this week, according to a person familiar with the matter. “We are changing what we do and how we work,” the firm said in a statement. “Our multi-year audit transformation is driving changes in how we conduct our audit and assurance services. We are also balancing the need for new skills to meet changing market demands against persistently low attrition.”

It marks KPMG’s fourth round of cuts in three years, following two reductions in 2023 and another last year. The move also coincides with new leadership: veteran auditor Tim Walsh took over as US CEO on July 1, while Christian Peo became vice chair of the audit practice.

Walsh’s tenure begins at a pivotal time for the Big Four accounting firms, which are navigating both the rise of artificial intelligence and increased scrutiny of consulting work under the Trump administration. AI presents efficiency opportunities but also challenges the traditional partner-led pyramid model that underpins the firms’ operations.

“The Big Four are eagerly applying AI to themselves to gain efficiencies and increase margins,” said Tom Rodenhauser of Kennedy Intelligence. “But their DNA is built on the partner-led pyramid model, which is incredibly difficult to deconstruct at the pace necessitated by AI advances.”

Although KPMG’s core audit and tax practices have remained solid, the firm has lagged rivals in consulting and advisory growth, according to Hrish Desai, associate professor of accounting at Arkansas State University. He added that KPMG has become stingier with incentive pay, and laid-off professionals now face a difficult white-collar job market.

PwC said in May it would cut about 1,500 jobs in its tax and assurance divisions, while Deloitte has signaled potential staffing actions as it responds to a Trump administration probe into federal consulting expenditures.

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6. Oracle Shares Jump as Company Reveals 35% Margin on $60 Billion AI Infrastructure Deal

Oracle Corp. surged about 5% after revealing margin expectations for its artificial intelligence infrastructure projects, easing Wall Street’s concerns about the profitability of the company’s fast-growing business line.

In a presentation at its annual investor conference in Las Vegas, Oracle said a six-year AI infrastructure project generating $60 billion in total revenue would deliver a gross margin of roughly 35%. The metric — representing the percentage of revenue left after production costs — reassured investors worried about thin margins in AI-related cloud deals.

Shares of fellow AI infrastructure provider CoreWeave Inc. also spiked on the news. Oracle has signed multibillion-dollar contracts with OpenAI, Meta Platforms Inc., and Elon Musk’s xAI to build data centers optimized for AI workloads. While these projects have lifted Oracle’s valuation, they’ve also raised questions about returns given the high capital intensity.

“This disclosure can help quell concerns about lower profitability,” wrote Bloomberg Intelligence analyst Anurag Rana, noting that some Oracle AI cloud contracts reportedly had margins near 14% last year.

“Given that this business is still in its infancy, it’s highly likely that profit will improve over the next few years,” he added.

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7. US Regional Bank Stocks Plunge as Fraud Exposures Emerge

Shares of US regional banks tumbled Thursday after two lenders revealed exposure to alleged borrower fraud, deepening worries about credit quality across the sector.

Western Alliance Bank and Zions Bank made the disclosures following recent bankruptcies of car parts maker First Brands and auto lender Tricolor, both under investigation by the US Department of Justice.

The KBW Regional Banking Index, which tracks 50 banks, dropped more than 4% to its lowest since August. Zions plunged 9%, while Western Alliance slid nearly 8%. The broader KBW Bank Index, comprising 24 large lenders, fell 2.3%. “When credit risk is rising, you just sell off the entire group and get answers later,” said Timur Braziler, a mid-cap bank analyst at Wells Fargo.

The selloff weighed on the broader US market, with financials dragging the S&P 500 lower. Heightened trade tensions between the US and China also contributed to a flight to safety, sending the two-year Treasury yield down as much as 9 basis points to 3.41% — the lowest since September 2022. “There was no single catalyst,” said Jonathan Hill, head of US inflation market strategy at Barclays. “It’s a combination of regional bank weakness, trade tensions, and funding market stress.”

Zions, with $89 billion in assets, said it would take a $60 million provision after identifying “apparent misrepresentations and contractual default” tied to two related commercial loans, and has filed suit in California. Western Alliance, with $87 billion in assets, said it had sued a borrower for alleged fraud in failing to provide first-position collateral and is seeking to recover about $100 million, according to Citigroup analysts.

Western Alliance said existing collateral covers the exposure and noted guarantees from two ultra-high-net-worth individuals under certain conditions. The bank added that its “total criticized assets” remain below June levels and reaffirmed its full-year guidance.

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