AI Fears Rise Again on Wall Street

oil prices are higher gas prices are higher but keeping your home warm with natural gas is going to be cheaper this winter so you have a lot more supply and about the same demand as last year forecast which equals low prices plus there's a tech route on wall street while treasury yields post their biggest drop since 2023 and we'll get into how the world of student loans is changing as people turn to private lenders to fund their education it's really creating a lot of unpredictability for today's students it's thursday october 22nd i'm alex osola for the wall street journal this is the pm edition of what's news the top headlines and business stories that move the world today first up another journal exclusive on starlink the journal has learned that president trump called elon musk yesterday and asked him to lift the restrictions on the service in ukraine you officials said trump told musk that he was frustrated the system speeds were still capped at around 100 miles per hour like you heard on yesterday's show those limits made some of ukraine's drones powerless against russian attacks the connectivity issues have helped sync relations between the u.s and ukraine to their lowest level in months u.s and ukrainian officials said that today the system was working more normally though still not restored to full functionality the president and his top officials have spent a week facing questions about why starlink was throttled and whether they ordered it and trump has repeatedly denied both giving the order to throttle the service and knowing who did give the order musk spacex and ukraine's embassy in washington didn't immediately respond to requests for comment in another exclusive we're reporting that the justice department is reviewing allegations against cory lewandowski the former top advisor to christie noem when she was the head of homeland security both of them were ousted from the department in march but before then lewandowski allegedly profited off his position at dhs the journal has previously reported that he asked several countries in the middle east to hire him on the side to assist with visa issues and other matters it's the first publicly known instance in trump's second term that the justice department is scrutinizing someone close to the president lewandowski has previously denied seeking foreign contracts while in government and his representative said today that lewandowski hasn't been contacted by the justice department regarding any investigation oil prices today were sharply higher brent crude the international bench mark rose four percent to settle at more than 113 a barrel the highest close since may even though more oil is moving out of the persian gulf right now than even before the iran war journal markets reporter david uberti says this rise in the price is because of the market's future expectations for more disruption early on in the war the price of physical oil cargos what i might need in terms of oil today or two weeks from now really outpaced the prices in futures markets what's happening now is that dynamic is reversing so the price of physical oil with all of these tankers moving out of the middle east and beyond is actually coming down but at the same time what's happening in financial markets is related to this risk premium people are worried that renewed fighting after the u.s midterms will actually extend the conflict going forward and ultimately provide for future disruptions down the road that's why you have this uptick in crude prices when it comes to the futures market oil reserves all over the world are running low right now and david said that leaves countries with little room for error there is this increase in supplies coming from the persian gulf going to places like asia and europe if that doesn't continue in november december january and beyond the global economy does have less crude oil in supply so if there is a subsequent disruption that could really beget a big run-up in crude oil prices and ultimately affect what you or i pay for gasoline well filling up your gas tank definitely costs more your electric bill probably does too but at least there's one bill that could actually be cheaper this year you're heating this winter almost half of homes in the u.s use natural gas for heat and unlike oil that's actually cheap right now about 19 percent lower than it was a year ago for more on what's driving that i'm joined now by journal commodities reporter ryan december so ryan the price of natural gas tends to rise throughout the winter as people use more natural gas but some federal officials and trading experts are saying that the price of natural gas is going to be much lower than it used to be it's going to be much higher than it used to be in the past so i'm going to talk a little bit about the price of natural gas and why that is and what i'm going to do is i'm going to talk a little bit about the price of natural gas and why it's going to be lower than it used to be in the past and why it's going to be lower than it used to be in the past and west texas drillers have been producing a lot of oil and up with that oil comes a lot of natural gas so it's coming out of the ground regardless of today's low prices and gas stock piles were not drawn down despite some record heat this summer in which we would expect a lot of gas to be burned to generate electricity for air conditioning a lot of the solar development of recent years has come down to a lot of natural gas and i think that's going to be a big part of come online so there's ample supplies so that's on the supply side and then on the demand side federal officials and weather forecasters are counting on a pretty mild winter for most of the country so you have a lot more supply and about the same demand as last year forecast which equals low prices how much could this actually come to in savings for americans you know it'll depend greatly of course on the weather in the region and the size of homes but the eia the the energy information administration has said those using natural gas to heat their homes could expect to pay about nine percent less uh those using propane can also expect to pay a little less that's a lot of rural people up in new england and the upper peninsula of michigan that are off the gas grid similar dynamics at play for propane as natural gas and how about for people who use oil or other forms of heating what can they expect for this winter there's a slim portion that uses heating oil they're going to get hammered heating oil is essentially the same thing as diesel and we've all become familiar with the problems with diesel relative to the strait of hormuz and the russia ukraine war you're looking at probably 20 or more on your bill mostly in the northeast uh maybe some in new york city a lot new england and then the rest of the folks use a lot of electricity it probably won't be that much more for your space heating needs a lot of them tend to be in the south and warmer climate so it's not as big of a burden as it can be in the northern part of the country that was wsj reporter ryan december thanks ryan thank you in other markets today there was a dramatic sell-off in tech stocks after signals from meta that it could soon go on a cash raising spree its hunt for capital to fund an expensive ai buildout struck a nerve on wall street and investors dumped stocks connected to the ai boom and piled into almost everything else from u.s treasuries to the beaten down shares of home builders and software companies meta spacex nvidia intel and data center provider coreweave all sold off the nasdaq overall stock price was at 2.6 percent its deepest decline since june the s&p 500 closed down more than one percent while the dow was nearly unchanged meanwhile treasury yields fell sharply as investors sought safety with the 10-year yield dropping below five percent for the first time in almost a month today's drop was the sharpest in more than three years and that flight to safety is giving a bit of a breather to the housing market as mortgage rates fell for the first time in nine weeks the 30-year average just over 7.3 percent of the stock price fell for the first time this week coming up moderna shares plunge after details of its breakthrough cancer vaccine are shared on social media more after the break there's been another year of higher health care costs and more employers are passing them on to workers a new survey from the non-profit kff shows that the average cost of a family health plan has risen by five percent since last year running more than twenty eight thousand dollars and the share coming out of employees paychecks shot up even faster to more than seven thousand dollars an increase of nine percent there's not much relief in sight as experts predict that next year's increases are likely to be even greater in other health care news moderna shares lost about eighteen percent of their value today after details from the pharmaceutical company's closely guarded cancer vaccine study emerged on social media they were supposed to be able to get the vaccine released at an oncology conference this weekend in august moderna and its partner merck said the vaccine had prevented melanoma from returning or spreading it was hailed as a remarkable finding analysts say the more detailed results shared today were pretty strong but still fell short of the market's heightened expectations merck and moderna declined to comment this year the trump administration has tightened restriction on federal student loans reigning in how much students can take out that's pushing a growing number of students to pursue private loans to pay for college and grad school personal finance reporter oyan adedoyan is here now to discuss oyan let's start with the changes to the federal loan structure what is changing and why so the education department is basically retreating from its role in student lending and they're doing this by capping how much students can borrow in the attempt to get colleges to either lower their costs of education you know what they're asking students and their families to pay or get students to kind of get more creative about how they're paying maybe even question you know do i want to go to a certain school if it's going to cost me much more than i can afford so for students who are looking at taking out a federal versus a private loan functionally what is the difference for them federal loans generally don't require a credit check they're known for being pretty easy to access and they come with fixed interest rates regardless of a student's credit history in contrast private lenders may assess credit history and income to determine a borrower's eligibility for a loan in general, as well as their interest rates. And so in this situation, it could help a student to have a parent as a cosigner to help them get a better rate and better chances of approval for a loan. Repayment options also differ. When it comes to private loans, you generally aren't able to qualify for any kind of student loan forgiveness, and they may not be as flexible when it comes to income and lowering payments throughout the duration of the loan. In the past, it was a relatively small number of students who pursued private loans. How much has that changed recently? So we're not sure exactly because, you know, we're still in the beginning of the school year. As of March, federal loans still make up a majority of the total outstanding student loan debt. They make up more than 90 percent, according to estimates by Interval Analytics. But I've already talked to some private lenders who are seeing some growth. South Carolina Student Loan, for instance, said that their graduate loans grew between 300 percent and 400 percent from last year, and they're anticipating more growth. Now we're seeing graduate students increasingly tap into private loans. I spoke to a student, Victoria Chason, who was accepted into medical school earlier this year. She was able to qualify for a private loan, but, you know, she's worried because you have to apply for a new loan every single year. And she was saying, you know, who knows what the rates are going to look like. So I think it's really creating a lot of unpredictability for today's students. That was WSJ personal finance reporter Oyin Adedoyin. Thanks, Oyin. Thank you. And heads up before we go, we've corrected an error in yesterday's show. The Honda CR-V has become America's best-selling vehicle that isn't a pickup truck and the country's most popular SUV this year. An earlier version of yesterday's podcast incorrectly said that the Toyota RAV4 still holds that status. And that's what's news for this Thursday afternoon. Today's show is produced by Anthony Bansi with supervising producer Tali Arbel. I'm Alex. Thanks, Osela, for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.