Week in Review: November 6, 2026

November 9, 2026

Summary

• S&P 500 suffers largest one-day decline since April 2025,
• NASDAQ enters correction territory.
• Democrats take control of Congress following mid-term elections.
• Nonfarm payrolls add 165K jobs in October; unemployment falls to 4.1%.

Overview 

Markets ended a turbulent week lower following a post-election selloff in which the S&P 500 fell 4.4%, it largest one-day decline since April 2025. October’s employment report, economic data from Institute of Supply Management (ISM), and corporate earnings reports, all of which would typically receive significant investor attentions, took a backseat to the election results as investors sought to determine their potential impact(s) on the artificial intelligence (AI) industry.

With any election that dramatically shifts the balance of power from one political party to the other, markets must determine which industries, or even individual companies, will benefit from, or be impacted by, the change. For AI stocks, the election results fueled concerns Democrats at both the federal and state level will pursue policies designed to slow the buildout of AI infrastructure, i.e. data centers. In addition, the general public seems to have developed an antipathy towards data centers reflected by the number of ballot measures aimed at limiting or restricting their development. According to CNBC, there were 41 such ballot measures across 10 states, of which 40 passed.

Though it remains to be seen exactly how those measures and future policies will ultimately impact AI-related stocks, in the immediate aftermath of the elections, investors seemed to take a sell first, analyze later, approach. That was evident by the selloff on Thursday, November 5, as the S&P 500 fell 4.4%, while the tech-heavy NASDAQ, fell 5.5%, leaving it in correction territory, defined as down 10% or more from its recent record high. On some level, the selloff was not surprising. For the past several months growing concerns about the massive financial outlays to fund the buildout of data centers had resulted in periodic bouts of market volatility. In addition, after their meteoric rise over the past several years, many AI stocks were “priced for perfection” leaving them susceptible to negative headlines or events. With investors already nervous about the near-term prospects for AI stocks, Tuesday’s elections results were enough to convince many investors to sell and lock in profits before determining their next course of action.

Economic data released during the week pointed to healthy conditions. After showing signs of slowing in early summer, labor market conditions continued to improve in October as employers added 165K new jobs. August and September figures were revised higher by a combined 84K jobs, bringing the three-month average to 137K, the fastest pace of growth since May and second best since April 2024. Unemployment fell to 4.1%, leaving the figure rangebound between 4.1% and 4.4% for 27 out of the past 29 months. The labor force participation rate increased 0.1% to 61.9%, a seven-month high, as 421K individuals entered the labor force in search of work. In another positive for labor markets, September job openings rose just over 400K to 7.52M, a four-month high, suggesting increased demand for labor on the part of employers.

Economic activity continued to expand in October according to industry group ISM. Manufacturing activity rose to a three-month high and its second fastest pace since May 2022. Service sector activity decelerated for a second consecutive month but remained positive. Both sectors reported positive, albeit modest, employment growth. Pricing pressures moderated slightly but remained at elevated levels.

Oil prices moderated during the week, falling nearly 13% on expectations that tensions between the US and Iran may ease following the midterm elections.

Through Friday, 88% of S&P 500 companies had reported third quarter earnings. According to industry group FactSet, thus far, 84% of companies have beaten their earnings estimate. Consolidated earnings growth for the quarter is expected to be 31%. For the first time since 4Q22, the earnings growth of non-Mag 7 stocks, i.e. the other 493 companies in the S&P 500, is expected to exceed Mag 7 earnings growth, pointing to solid corporate fundamentals and broad underlying economic growth, two reason for the market’s relative stability in 2026.

The Details 

Equities 

Equity markets turned sharply negative last week, due to the dramatic midterm election results. There were few shelters, with all major indices falling, led by the Nasdaq down 3.4%, the S&P 500 down 2.7%, the small cap Russell 2000 down 2.0% and the S&P 500 Equal Weight down the least, at -1.0%. The week’s declines brought the Nasdaq down 14% from its all-time high, while the S&P 500 is down only 6%. Both indices remain up high-single digits year-to-date and over the last 12 months. The less concentrated S&P 500 Equal Weight and Russell 2000 are outpacing both indices year-to-date, up 12.7% and 11.0%, respectively.

Elections were the biggest story for equity markets. Democrats were expected to gain seats in the midterm elections and assume congressional control, but the degree of success was far more than investors expected. A near historic number of Senate, House, and Governor seats across the country were flipped to Democrat control. Lopsided election outcomes have consequences and investors did not have to look far to spot a big one. Many winning campaigns and ballot measures featured prohibitions on data center development or additional scrutiny and requirements, making clear voters are not happy with AI. Investors noticed and expressed concerns for a slower rate of AI infrastructure build by sending technology shares down 6.9% for the week, led by semiconductors down 10.4%.

While voters overwhelmingly approved ballot measures to slow or restrict the development of data centers, it does not mean they will stop being built. Those already permitted and under construction will likely continue. But new projects will undergo greater scrutiny, bringing slower timelines and higher costs. With demand remaining high and developers and owners penciling attractive returns, many projects could look to accommodate new regulations. Thus, a possible outcome is a development schedule with lower growth in the near term, potentially creating the conditions for a healthier, more sustainable economic cycle with reduced risk of an overbuild and the value destructive consequences of a big bust. Slower growth could also reduce the inflationary impacts of rapid construction while lessening the capital needs from the equity and debt markets.

Third quarter earnings continued to roll-in, showing corporate America is thriving currently. Forward expectations have once again been revised higher during earnings season, and strong results are expected yet again in the fourth quarter and into the first part of next year.

Apple (ticker: AAPL) was the most notable company to report during the week. Its results were strong, with revenue up 12% and earnings up 14%. Apple shares are the best performing of the Magnificent 7 year-to-date, up 26%. Its leadership is a function of its modest commitment to AI spending, resulting in still strong free cash flow and relatively capital-light business. While its perceived tardiness to the AI game was previously viewed as an Achilles Heel, it is now seen as a virtue by investors, as its stranglehold on consumer devices mean it will have a chance to participate in AI monetization while not having to commit inordinate amounts of capital in the early years. It is, of course, too soon to know how Apple’s fortunes will change as the operating landscape rapidly evolves, but it is a reminder of how quickly and completely investor views can shift. For some, the past week marked the death knell of the AI investment boom; time will tell if that view is prescient or an overreaction.

Fixed Income 

Fixed income investors, like all market participants, were focused on the election results. Monday and Tuesday brought a continuation of the prior week’s decline in rates. A heavier new issue calendar in the investment-grade and municipal bond markets marked the start of the week as participants looked to put money to work before election results took shape.

Those results had the potential to reshape the interest rate environment and add volatility; issuing bonds on Monday and Tuesday helped mitigate that risk. For the remainder of the week, fixed income markets grappled with what the election would mean for long-term inflation, Fed policy, and AI regulation, with rates continuing to show a flight-to-quality move.

Treasury markets began the week down, tied in part to declining oil prices. The 10-year opened at 4.91% and the 30-year at 5.29%, with both yields reaching their weekly highs Tuesday. Treasuries then rallied sharply on election news as markets recognized a more constrained fiscal path under divided government. Thursday’s equity selloff and election results reinforced the flight to quality, pushing the 10-year yield to 4.83%. Friday’s jobs report strengthened expectations for a December rate hike, with the probability ending the week at 77.5% after fluctuating throughout the week.

The investment-grade market had one of its busiest weeks in an already busy year, with issuance exceeding $74B, the fourth-largest week in 2026. Oracle, Meta, and Apple accounted for almost 50% of that total. Issuance was front-loaded, with no new bonds issued Friday after Thursday’s market turbulence. Yet even with heavy supply and the equity market selloff, investment-grade spreads finished roughly flat from the prior week despite intra-week volatility and pricing concessions. That continues to look a lot like resilience- a continuation of the prior week, rather than a break from it. High-yield spreads were more sensitive to equity market moves and AI/tech concerns, ranging from +324bps to +340bps, before closing modestly tighter on the week.

The municipal bond market outperformed Treasuries on the week, with 10-year yields falling almost 19bps. The election was largely viewed as constructive, with ballot measures approving $67B of state and local bond authorization out of $84B proposed. That signals both future issuance and broader public appetite for government projects. In an election-driven week, Treasuries benefited from a flight to quality, while strong technicals helped municipals outperform.

 

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