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Berkshire’s $9.7B Bet: Buffett Doubles Down on Old-School America

What Does He Know That We Don’t? October 02, 2025

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The Fed's latest move is front-page news with market ripples in tow.

Warren Buffett stands firm as Berkshire bets big on American industry with $9.7B OxyChem deal.

Good Morning,

Markets are grinding higher, but the real headline is Warren Buffett’s bold $9.7B move into basic chemicals. We unpack what Berkshire’s OxyChem deal says about old-school investing, why it bucks the tech trend, and how it could shape the next wave of M&A. If you’re watching value stocks or looking for signals beyond AI hype, this one’s for you.

Investor anxiety grows as gold prices surge to record highs amid the U.S. shutdown, AI chipmakers Samsung and SK Hynix rally on OpenAI’s Stargate deal, and Congress inches toward a funding compromise while healthcare disputes stall progress.

Don't forget our trivia question at the bottom of the Newsletter.

Here are your Morning Bullets.

– Truly yours, Fred Frost

📈 Yesterday's Market Recap

Markets closed with record highs yesterday as the S&P 500 topped 6,700, buoyed by optimism over potential rate cuts. The Dow lagged slightly, but tech-heavy Nasdaq pushed forward with gains in premarket trading today. Key sectors like Health Care and Utilities led the charge, despite headwinds in Materials.

S&P 500 Hits Record Close: The index surged past 6,700, reflecting broad market confidence amid Fed rate cut expectations. → Benzinga

Health Sector Strength: Gains in Health Care stocks underpinned yesterday’s rally, shrugging off broader volatility. → Stocktwits

QuantumScape Dips Despite Deal: Stock fell 1.79% pre-market to $12.11 after a Corning partnership announcement. → Benzinga

📈 Daily Performance Snapshot

Index/Asset	Closing Value	Change
S&P 500	6,711.20	+0.34%
Nasdaq	22,755.16	+0.42%
Dow Jones	46,441.10	+0.09%
Gold	$3911.20	+0.35%
Crude Oil	$61.54	-0.39%
Bitcoin	$118,902	+1.88%
10-yr Treasury Yield	4.106%	-1.01%

🔭 What to Watch Today

Today’s calendar offers a mix of economic signals and political drama that could sway markets. Keep an eye on these developments for potential ripples in your portfolio.

Fed Rate Cut Odds (Ongoing): CME FedWatch shows a 94.6% chance of a cut in October, potentially boosting equities if confirmed. → Daily Signal

Tech Earnings Previews: Bentley Systems’ pre-market surge hints at broader tech momentum ahead of its November report. → MarketBeat

💡 Opportunity Watch

Amid today’s headlines, a few sectors and stocks stand out as potential plays for savvy investors. Here’s where I’m looking.

SK Hynix (NASDAQ: HXSCL): Surging 10% on OpenAI’s Stargate partnership, this chipmaker is at the heart of AI infrastructure growth. → CNBC
Gold ETFs (e.g., GLD): With prices up 45% yearly and projected to hit $4,000, gold remains a hedge against uncertainty. → Investing.com
Lyft Inc. (NASDAQ: LYFT): Up 59.85% YTD, its customer-first strategy under CEO Risher could challenge rideshare rivals. → Benzinga

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🔥 The Big Bullet

Buffett’s Berkshire Buys OxyChem for $9.7B

What happened: Warren Buffett’s company, Berkshire Hathaway is buying OxyChem, the chemical unit of Occidental Petroleum, for $9.7 billion. This is Buffett’s biggest deal in three years. OxyChem makes basic materials like chlorine and caustic soda, which are used in construction, cleaning, and plastics. The purchase gives Berkshire more exposure to industrial businesses that tend to do well during steady economic growth. Buffett has been a long-time investor in Occidental, so this deal expands that bet.

Why it matters: This move signals Buffett’s continued belief in American manufacturing and infrastructure. Buying a company that makes basic chemicals shows confidence in steady demand for everyday goods. It also diversifies Berkshire’s portfolio beyond insurance, railroads, and energy. At a time when some investors are worried about tech bubbles or market volatility, this kind of old-school investment could be seen as a safe, long-term bet. It may also spark more dealmaking in the industrial space if other firms follow suit.

What’s next: Investors will watch how this deal plays out financially for Berkshire and how Occidental uses the cash from the sale. There could be market opportunities for similar companies if the deal raises valuations in the chemical sector. It’s also worth watching how regulators respond, though there’s no sign of antitrust trouble. Lastly, this may not be Buffett’s final big move, even as he prepares to hand off the CEO role at year’s end.

🧭 Policy & Market Ripples

Gold Price Frenzy: Up 45% in a year to $3,870, gold signals investor fears amid shutdown risks; projected to hit $4,000 by mid-2026. → Fortune
AI Chip Surge: Samsung and SK Hynix soar on OpenAI’s Stargate deal, boosting memory chip supply for AI models. → Reuters
Government Shutdown Stalemate: Senate talks hint at bipartisan funding progress, but Democrats push healthcare demands amid job cut fears. → AP