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Generac, the company behind the standby generators on the side of suburban homes, closed up 18% on Thursday after Amazon agreed to buy about $2.4 billion of its data center generators and took a warrant on the stock. A 90-cent media company closed at $3.34 on a $1 billion platform deal. And Fluence Energy lost 15% after cutting its revenue outlook by $600 million, blaming delays at its Houston factory.

The S&P 500 rose 1.1% to 7,638 a day after the Fed's first rate hike since 2023, while the Russell 2000 managed 0.55%, to 2,874. The 10-year yield eased to 4.93% after closing above 5% on Wednesday for the first time since 2007, and WTI settled at $101.91.

Here's what's inside today:

🏦 What a Fed hike does to small caps
🔌 The home-generator maker with a $2.4 billion Amazon order
😨 A fear gauge built from hiring, web traffic and Reddit
📈 Top gainers (and biggest losers) from Thursday's session

This is not financial advice. Always do your own research. Past performance doesn't guarantee future results.

The Fed raised rates a quarter point on Wednesday to a range of 3.75% to 4.00%, its first hike since 2023, and projected one more this year. On Thursday the S&P 500 bounced 1.1% and the Russell 2000 rose about half that, and the gap has a mechanical explanation.

Small companies borrow differently. Large companies issue long-dated, fixed-rate bonds. Smaller ones lean on bank credit lines and term loans, which usually float. Goldman Sachs estimates roughly 32% of Russell 2000 companies carry floating-rate debt, against about 6% of the S&P 500, so a hike reaches their interest expense within a quarter.

Unprofitable companies feel it twice. A company burning cash has to keep raising money, and higher rates make both debt and equity more expensive to raise. Reuters reported that some investors expect rate-sensitive assets such as small caps to look less attractive while the Fed's path stays unclear.

Four things worth checking on any small cap:

A higher-rate market tends to separate the borrowers from the companies that are already funded, so it helps to know which group each holding falls into before the next hike arrives.

Generac built its name on the standby generators that kick on when a neighborhood loses power. On Thursday the stock repriced around a very different customer.

The news: In a filing late Wednesday, Generac said it signed a long-term agreement to supply backup generators for Amazon's data centers, with initial deliveries expected to total about $2.4 billion across 2027 and 2028. Amazon also received a warrant for up to 1.69 million Generac shares at $200.93. About 308,000 of those vested at signing, and the rest vest as Amazon's payments climb toward $8 billion.

Shares opened at $229.50, up 31%, and closed at $207.23, up 18.3%, on more than six times their average volume.

Why it matters:

A warrant that vests with purchases gives the customer a reason to keep ordering, since Amazon only earns the full stake by spending the full amount.

The risk: The $8 billion in the headlines is the payment level at which the warrant fully vests. The expected order is $2.4 billion, deliveries are slated for 2027 and 2028, and Generac's own filings list cancellation rights in data center contracts as a risk factor. Last quarter's margins included about $71 million of tariff refunds. The company carries roughly $1.4 billion of debt against $271 million of cash in a week when rates went up, and it's spending to add large-generator capacity. At about 20 times forward earnings and 30% below its 52-week high of $296.44, the stock closed just above Amazon's $200.93 strike. Position small, and look to the late-October earnings call for how much of the order lands in 2027.

Most fear and greed indexes are built from market data like volatility, put/call ratios and bond spreads. Our partners at AltIndex publish a Stock Market Fear & Greed Index that adds what those leave out. It blends 12 signals, including webpage traffic, Reddit mentions, job postings, headcount and employee business outlook, into a daily score from 0 to 100.

Thursday's reading was 44, which AltIndex labels Fear. Prices and hiring pushed toward greed, while trading volume, Reddit chatter and revenue growth pulled the other way.

The idea is that these behaviors often shift before prices do. Employees see demand soften before management says so on an earnings call. The page breaks out each signal, so it's easy to see what's driving the score in a week like this one.

See today's reading →

Here's where Thursday's biggest moves landed. Deals drove the gainers side, and a failed trial and two outlook warnings filled the losers list.

Aethlon Medical, a $5 million device company, closed up 374% after agreeing to merge with privately held North Immunology alongside a $180 million private placement. Paradium.AI, the former Arena Group and owner of TheStreet and Parade, went from 90 cents to $3.34 after Roundtable agreed to a 10-year, $1 billion platform deal that hinges on an $89 million investment for about 49% of the company. Schrödinger added 26% without company news, extending a rally that began after it spun two drug programs into a new company on September 9, and Absci rose 15% as AI drug discovery names moved together.

On the loser side, Longeveron lost 59% after its stem cell therapy missed the main goal of a mid-stage trial in a rare infant heart condition, and the company said it is exploring strategic options. Fluence cut fiscal 2026 revenue guidance to about $2.4 billion from roughly $3.0 billion and widened its expected adjusted EBITDA loss to about $200 million. AutoNation fell to a 52-week low after flagging softer service growth and affordability pressure, and auto retail is one of the first places higher rates show up. Viant and Dentsply Sirona fell without a company announcement we could find.

Generac and Fluence both sell power equipment into the data center boom. One spent Thursday adding a customer and the other explaining why its factory is behind, which is why backlog only counts once it ships.

(Data: Yahoo Finance.)

Thursday brought a home-generator maker with a $2.4 billion Amazon order and an Amazon warrant on its stock, a 90-cent media company that closed at $3.34, and a battery-storage maker that lost 15% on a $600 million guidance cut. Small caps rose half as much as the S&P 500 a day after the Fed's first hike since 2023, and the companies carrying floating-rate debt are the ones to watch from here. We'll keep showing you both sides.

We'll be back soon. Watching a name we should cover? Hit reply and tell us.

Cheers,
— Brandon & Blake of Invested Inc.