October 15, 2025
Markets bounced on Friday, September 26, with the S&P 500 up 0.6%, the Dow up 0.7%, and the Nasdaq up 0.4%, but all three indexes still finished the week lower. PCE inflation remained above the Fed's 2% target while matching expectations, and investors continued to price in two additional cuts. New tariffs added sector noise, including 50% duties on kitchen cabinets, 30% on upholstered furniture, 25% on heavy trucks, and 100% on branded or patented foreign drugs.
Credit markets were unusually strong on the surface. Investment-grade companies sold $210 billion of bonds in September, beating the prior $172 billion record, while IG spreads fell to 0.74 percentage points over Treasuries, the lowest level since 1998. Junk spreads were near 2.75 percentage points, close to the 2007 low. The caution sign was private credit defaults at 9.5%, above the pandemic level of 7.3%, with Tricolor's bankruptcy leaving some bonds near 20 cents on the dollar.
Electronic Arts was the main private equity story. Silver Lake, Saudi Arabia's PIF, and Affinity Partners agreed to take EA private at roughly $55 billion, making it the largest LBO ever. The consortium offered $210 per share, a 25% premium, with JPMorgan providing $20 billion of debt, $36 billion of equity, and PIF rolling its 9.9% stake. Goldman advised EA and JPMorgan advised the buyers. For recruiting, it is a clean case of durable IP, sponsor financing, and public-to-private timing.
OpenAI's AMD partnership added a different kind of capital structure angle. OpenAI can receive warrants for up to 10% of AMD, or 160 million shares, at $0.01 per share if deployment and share-price milestones are met. AMD rose 23.7% to $203.71 after the announcement. The deal matters because Nvidia still has more than 70% of the AI chip sector, while OpenAI is pushing AMD chips mainly for inference workloads.
AI infrastructure continued to pull in capital. CoreWeave signed a $14 billion cloud deal with Meta and expanded its OpenAI agreement by $6.5 billion to $22.4 billion total. Meta guided to $114 billion to $118 billion of expenses and expected AI to drive higher expense growth in 2026.
M&A was active outside tech. Fifth Third agreed to buy Comerica for $10.9 billion, creating the ninth-largest U.S. bank with $288 billion of assets. Qualtrics agreed to buy Press Ganey Forsta for $6.75 billion, pairing software with data from more than 41,000 healthcare organizations. The week was busy, but the recap is simple: financing was available for platforms, although credit risk was starting to look too cheap.