Week ahead: US midterms, Apple, AMD and Palantir earnings and the October jobs report test markets

Wall Street starts November with three big tests in a single week, Reuters reports: the US midterm elections, a heavy slate of quarterly results and the monthly jobs report.

Why it matters

The AI trade that has led the market suffered a series of setbacks in late October. Alphabet fell more than 12% on Thursday after reporting cash burn and disappointing revenue, and on Friday the Nasdaq had its biggest drop since June, with Intel and Reddit down about 29%. According to Capital Economics, the four “hyperscalers” — Microsoft, Meta, Amazon and Alphabet — accounted for more than a third of all capital spending by S&P 500 companies over the past 12 months.

The calendar

• Monday: Apple reports; its shares are up 28% this year.
• Tuesday: midterm elections decide control of Congress. Reuters notes that Democrats are widely predicted to win the House, while the Senate is less certain. Investors are watching how the result could affect AI and data-centre regulation, defence, healthcare, banks and crypto.
• During the week: AMD, Qualcomm, Palantir, McDonald’s, Amgen and ConocoPhillips are among more than 100 S&P 500 companies reporting.
• Friday: the October employment report.

Background

With about half of the S&P 500 reported, third-quarter earnings were on pace to rise 31%, according to LSEG IBES data. Third-quarter GDP grew at its fastest pace in a year, and the Federal Reserve held rates steady. “The earnings bar is very high,” said Chris Galipeau of the Franklin Templeton Institute. Energy, financials, utilities and healthcare were set for solid October gains even as tech struggled.