Rogue AI, Jack Smith, and Hurricane Isaias
We finish the Senate hearing on the AI agents that went rogue, then go into Jack Smith's testimony. Plus Hurricane Isaias's landfall in Florida, the judge who blocked the deportation of the man ICE shot, the visa crackdown, and a job market where nobody feels good about their money.
Tonight's Rundown
- I.The Rogue AI Hearing (finishing it)
- II.Jack Smith Before the Senate Judiciary Committee
- III.Today's Stories
- IV.The Job Market
- V.The Elves
- VI.Stories About Stories
- VII.Tonight's Sponsors
The Rogue AI Hearing
"Rogue AI: Securing the Homeland Against AI Agent Attacks." Senate Homeland Security subcommittee, chaired by Sen. Josh Hawley, Sept 30, 2026. Witnesses from METR, Apollo Research, Dragos and the AI Futures Project testify on the OpenAI agents that hacked Hugging Face. OpenAI CEO Sam Altman declined to appear.
The full hearing
The most-watched moments
1. Sen. Hawley: "If you break it, you pay for it"
2. Sen. Gallego: AI agents developing their own language
3. Sen. Hawley reads the chat logs between OpenAI's agents during the Hugging Face hack
4. "These are our warning shots. Next time we may not be so lucky."
5. What happens if the government doesn't regulate AI
6. What actually happened in the OpenAI-Hugging Face hack
7. Sen. Moody: "It should be a bipartisan issue"
8. Sen. Rick Scott: "Is AI going to kill us?"
9. Sen. Hawley calls out Sam Altman for not showing up
The other side of the AI story: small businesses using AI are hiring more
A New York Fed survey out Oct 8: 46% of small employers already use AI tools. Those that use it expect to add workers on net (+33 points) more than twice as much as those that don't (+15). And 77% say AI hasn't changed their labor costs.
If you own a business: the data says AI is helping small companies grow, not replacing their people.
Jack Smith Before the Senate Judiciary Committee
Former special counsel Jack Smith testifies before the Senate Judiciary Committee on his investigations of President Trump, Sept 29, 2026. Republicans accuse him of "abuse of authority" and targeting Republicans. Smith: "I stand by my decisions as Special Counsel."
The full hearing
The most-watched moments
1. Sen. Booker questions Jack Smith
2. Jack Smith's full opening statement
3. Sen. Hawley accuses Jack Smith of lying under oath about phone-record subpoenas
4. Sen. Schiff questions Jack Smith
5. Sen. Klobuchar questions Jack Smith about January 6
6. Sen. Kennedy: "He's not Bambi's baby brother"
7. Sen. Schmitt questions Jack Smith
8. Klobuchar to Schmitt: "You are calling a witness a dirtbag!"
9. Sen. Hawley questions Jack Smith
10. Sen. Britt questions Jack Smith about Arctic Frost
11. Sen. Kennedy asks Jack Smith about his wife's support of Democrats
12. Sen. Kennedy: "What does the word self-righteous mean?"
13. Sen. Grassley asks Jack Smith if he spoke with John Brennan
Today's Stories
Where things stand: US-Iran war, day 225. The Fed's rate range is 3.75% to 4% after a September hike. Midterms are Nov 3, 24 days out. The government is funded through Dec 11.
1. Isaias makes landfall in Florida; at least one dead, nearly a million without power
- Came ashore about 9:30 p.m. ET Friday near Destin as a strong Category 2, with 105 mph winds and gusts up to 118 mph. The first US hurricane landfall since October 2024. It has since weakened to post-tropical and is moving through Alabama toward Tennessee.
- One person was killed in Pensacola when a large tree fell on a home, the Escambia County Sheriff's Office says. Rain topped 12 inches in parts of Florida and Alabama, and storm surge reached about 5.5 feet at Panama City Beach.
- Outages: estimates run from about 870,000 (NBC) to more than 1 million (Fox Weather) across Florida, Alabama and Georgia. The Pensacola Bay Bridge and the Pensacola and Destin-Fort Walton Beach airports are closed. A Pensacola inn lost its roof.
- President Trump approved emergency declarations for 27 Florida counties and 3 Alabama counties, which lets FEMA move in.
If you own a business in the storm zone: photograph the damage before you clean up, keep receipts for everything, and call your agent about business-interruption coverage today.
Sources: NBC News · ABC News · Fox Weather · WFTV
2. The visa crackdown widens: 8 companies suspended from the green-card program
- The Labor Department suspended Microsoft, Adobe, Cognizant, Infosys, TCS, Wipro, HCL and Capgemini from PERM, the program companies use to sponsor workers for green cards. Microsoft and Adobe were cited for "multiple active federal investigations."
- Labor Secretary Sonderling said these companies have requested "almost 3 million foreign workers" since 2009. Labor Department Inspector General Anthony D'Esposito also opened J-1 visa fraud probes at Harvard, Yale, Stanford, MIT and five other universities.
- Keith Sonderling was officially sworn in as Labor Secretary in the Oval Office on Friday.
- Microsoft says 80% of its recent H-1B filings were for people who already work there, and new hires on visas equal about 1% of its US workforce.
- Correction to last night's show: Microsoft's suspension is from the green-card program, not the H-1B work-visa program.
If you own a business: if you sponsor anyone on a visa, keep your wage and recruiting records ready for an audit.
3. Houthi missile strike on Riyadh's airport kills 3
- A Saudia pilot was among the dead and a Saudia plane was hit. At least 124 flights were canceled by Friday afternoon. Pakistan is sending forces under a defense pact.
- The response: the Saudi-led coalition says it struck 82 Houthi military targets Friday and destroyed 3 missile launchers. The Houthi leader warned Saudi Arabia to prepare for a "long conflict."
- Iran: the New York Times and Axios report the military is still preparing strike options, despite Trump's "no strikes before the midterms" post.
If you own a business: Middle East supply risk is still what's driving your fuel costs.
Sources: Al Jazeera · Fortune · Washington Post · Just Security · CNBC
4. Maduro and his wife charged with conspiracy to commit torture
- The new charge was unsealed Oct 8 in federal court in Manhattan and carries up to 20 years. It's on top of the existing narco-terrorism, drug and weapons charges. Prosecutors allege US citizens were tortured with electric shock, simulated drowning and beatings.
Source: Department of Justice
5. ICE shoots an illegal immigrant with a criminal record who DHS says rammed their vehicles; Mayor Mamdani demands ICE leave NYC
- Who he is, per DHS: Oscar Bergal, 28 (city records spell it Belgal), a "criminal illegal alien" from the Dominican Republic. Convicted of grand larceny last year and sentenced to five years' probation. DHS says he's associated with a robbery crew that used mopeds and weapons, is under Homeland Security Investigations investigation with gang ties, and has "direct or indirect knowledge" related to an earlier shooting of a Customs and Border Protection officer.
- Why they were there: a targeted arrest. DHS says he had already evaded ICE officers in September, so agents expected him to run.
- Why the officer fired, per DHS: he ignored orders to get out of his car, accelerated and smashed into two ICE vehicles, then "weaponized his vehicle" and drove toward other officers. DHS official Marcos Charles: the officers believed "their life and the life of the partners and the general public were in danger."
- The result: one ICE officer fired seven rounds. Bergal was hit in the neck and is in stable condition. His 5-year-old son was in the car and was not hurt. DHS Secretary Mullin says agents did not know the child was inside, and that body cameras were on.
- What the NYPD's street camera shows: a plainclothes officer approaching with his gun drawn, then the car moving forward and leaving the frame before the shots. It does not show the moment of the shooting. ICE body-camera video has not been released.
- Since then: on Friday, federal Judge Paul Oetken barred his deportation while his legal challenge is pending. The Bronx District Attorney opened an investigation into the agents' actions. No charges have been filed against him or the agent.
- The reaction: more than 1,000 people rallied at Foley Square Friday. Mayor Mamdani called it "an outrage," said "we want them out," and says a two-hour call with Trump and Mullin did not get the man released.
Sources: NY1 · amNY · Gothamist · ABC7 · Time · Fox News · NBC News
6. Chief Justice Roberts pauses the fight over political TV ad rates
- He froze a lower-court order that would have forced the FCC to decide within 48 hours whether parties and joint fundraising committees get the lowest ad rates. Challengers must respond by 5 p.m. Saturday. It affects how far midterm ad money goes.
Sources: The Hill · Inside Radio
7. Witkoff and Kushner pitch a partial Ukraine ceasefire in Miami
- The proposal would halt attacks on energy infrastructure and grain shipments (Axios). Zelenskyy accused the US of being unwilling to help after Russian strikes killed more than 30 people (Reuters).
- Update: the talks ended a day early, Friday, with no ceasefire deal reported. Witkoff said they covered energy, winter, grain exports, security guarantees, reconstruction and EU membership.
Source: Just Security roundup
8. Navi Pillay wins the 2026 Nobel Peace Prize
- The South African human rights lawyer is a former judge at the International Criminal Court and the Rwanda tribunal, and chaired a UN inquiry on the Palestinian territories. She defended Nelson Mandela.
- Trump's reaction: at a rally in Syracuse Friday night, he said the Nobel Peace Prize is "forever discredited."
Sources: Just Security roundup · NBC News
9. Trump names Katie Zacharia White House press secretary
- She replaces Karoline Leavitt. Trump announced it on Truth Social. Zacharia is a conservative commentator, currently a senior communications adviser at Trump Media & Technology Group, and a former Homeland Security spokesperson.
Sources: Fox News · NBC News · ABC News
10. Trump: Russia will supply millions of tons of diesel
- Trump says a deal with Putin means more than 300,000 tons right away, 500,000 tons in November, 1 million after that, and another 3 million depending on the state of Russia's refineries.
If you own a business: diesel runs every truck, van and generator you own. Watch whether this actually moves the price at the pump.
Source: CNBC
11. Hasan execution: Vance says he won't watch
- The vice president said he won't watch the firing-squad execution of the Fort Hood shooter if it's livestreamed, and cast doubt on whether it will be.
Source: CNN
12. Also today: a 7.7 earthquake in Panama, and Mike Ditka dies at 86
- A magnitude 7.7 earthquake struck Panama Friday, per the U.S. Geological Survey. Panama's emergency chief reports no deaths so far, at least 27 injured, and 147 aftershocks by Friday evening.
- Mike Ditka, the Hall of Famer who coached the Chicago Bears to their only Super Bowl win, died at 86, his family announced.
Sources: ABC News · CNN · NBC News
13. Judge rules the Justice Department's voter-roll checks unlawful
- US District Judge Sparkle Sooknanan ruled Friday for Common Cause, writing that the policy "represents the federal government's attempt to decide who gets to vote." Eighteen states had handed over voter rolls; DOJ had sued 30 states and DC that refused. DOJ says it is reviewing the ruling.
Sources: CBS News · Al Jazeera
The Job Market
1. Consumer sentiment falls to 46.3, a 5-month low
- University of Michigan, preliminary October reading: 46.3, down from 48.1 in September. People expect 4.7% inflation over the next year, up from 4.6%, and 3.5% over the long run.
- Survey director Joanne Hsu says frustration with the cost of living "continues to mount" across party lines.
If you own a business: your customers are watching every dollar. Lead with value, not the premium upsell.
Sources: University of Michigan Surveys of Consumers · Bloomberg
2. Netflix reportedly preparing to cut about 5% of its staff
- About 800 to 850 jobs, possibly starting next week, first reported by Puck and then Variety. Netflix declined to comment.
3. Two Fed officials: the job market is fine, rates may go higher
- Gov. Waller (Oct 8): the labor market is "solid and stable," job gains are near the break-even pace, and he expects more rate hikes to get inflation back to 2%.
- St. Louis Fed's Musalem (Oct 8): lowering inflation will take more rate hikes over the next 6 to 9 months. The next Fed meeting is Oct 27 to 28.
If you own a business: borrowing is more likely to get more expensive than cheaper. If you need financing, lock it in sooner.
Sources: Federal Reserve (Waller) · Reuters via Investing.com (Musalem)
4. Small businesses: doing fine, but money is tight
- A Small Business & Entrepreneurship Council survey (an advocacy group) of 516 owners: 81% are meeting or beating expectations, but 54% say capital is tight, up from 43% in February. 30% plan to hire and 4% plan cuts.
- Their top worries: inflation (39%), gas and energy (29%), tariffs (19%).
Source: SBE Council
5. UPS cuts holiday hiring to 100,000
- Down from 110,000 last year and 125,000 in 2024. Fewer seasonal jobs going into the holidays.
Source: Yahoo Finance / Quartz
6. Gas: $4.36, still a record for this time of year
- AAA's national average on Oct 8 was $4.36, down 5 cents on the week.
Source: AAA
7. The Fed: families are falling behind on their debts
- The Fed's Survey of Consumer Finances, out Friday: Americans' ability to stay current on their debt payments got worse over the past three years, to levels not seen since the aftermath of the 2008 financial crisis.
If you own a business: expect more slow payers. Tighten your terms and get deposits up front.
Source: CNBC
8. Food banks: everyday Americans are now the safety net
- NBC News reports food banks are getting less from federal programs after cuts, while food-stamp restrictions in the "big, beautiful bill" and higher gas prices are driving up demand.
Source: NBC News
9. More than half of workers skip lunch to save money
- ezCater's survey of 1,000 full-time workers: 54% skipped a work lunch at least once a week this year, and researchers say it's a response to food prices.
Source: CNBC
10. Stocks finished the week up
- Friday's close: Dow +0.83% to 51,654.95, S&P 500 +0.59% to 7,811.54, Nasdaq +0.64% to 27,366.17. For the week the S&P gained about 1.2%.
Source: Yahoo Finance
Coming up: Census new business applications for September (Wednesday, Oct 14) and the NFIB small business report (Tuesday, Oct 13).
The Elves: This Week's Calls
Every Friday we lock in calls for the week ahead. Next Friday we grade them on the show, right or wrong, and the record stays on this page. Nobody gets to quietly drop a bad call.
Locked in: Friday, Oct 9, 2026, at the close (the last trading day before tonight's show). S&P 500: 7,811.54. VIX: 15.41.
Graded: Friday, Oct 16, 2026, at the close.
Graded: Friday, Oct 16, 2026, at the close.
The House Model
- Master score: 64.9, neutral. Above 70 is bullish, below 55 is bearish. Conviction is low because the categories disagree.
- Strongest: the tape, meaning price trend (100), volatility (82.8) and the economy (71.2).
- Weakest: valuation (21.7). Stocks are expensive.
- Market regime: calm, low volatility.
NeutralCall for the week: the S&P 500 finishes between 7,709 and 7,913, the range the options market is pricing for next Friday.
The AI Elves
GPT
"Market uncertainty from economic data and geopolitical tensions is balanced by strong technical indicators." GPT
How we grade it
- Range call is right if the S&P 500 closes Oct 16 between 7,709 and 7,913.
- A flat call is right if it closes within 0.5% of 7,811.54: between 7,772 and 7,851.
Stories About Stories
Real things that happened today running my businesses.
Tonight's Sponsors
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