[BRIEFING.COM] Thursday's session ended with steep losses across the stock market as a deepening selloff in AI-related stocks spread well beyond technology, wiping out Wednesday's post-election rally and sending the major averages to their worst finishes since April 2025. The S&P 500 (-4.4%), Nasdaq Composite (-5.5%), and DJIA (-3.4%) all finished near their session lows, with the Nasdaq entering correction territory, down more than 10% from its October 6 closing high. The DJIA also fell below its 50-day moving average, joining the other two major averages beneath that technical marker.

The reversal followed Wednesday's relief rally in response to the midterm elections, which gave Democrats control of both chambers of Congress. While most stocks participated in yesterday's advance, semiconductor and AI infrastructure names were notable exceptions as investors began weighing the prospect of tighter regulation slowing the development of data centers. Those concerns intensified Thursday, raising questions about whether the companies tied to the AI buildout can deliver the earnings growth needed to justify their elevated valuations.

The information technology sector (-7.3%) suffered the largest decline by a wide margin, dragged lower by a 12.3% plunge in the PHLX Semiconductor Index. NVIDIA (NVDA 181.60, -18.53, -9.26%) fell into bear market territory, while Advanced Micro Devices (AMD 404.40, -84.38, -17.26%) and Arm Holdings plc (ARM 166.72, -25.08, -13.08%) faced particularly heavy selling. Qualcomm (QCOM 156.75, -16.44, -9.49%) added to the weakness after its quarterly results and guidance highlighted continued handset weakness and margin pressure despite progress in its automotive and data center businesses.

The pressure extended to companies providing infrastructure for AI development. CoreWeave (CRWV 43.66, -4.76, -9.83%) fell to its lowest level since May 2025, while the Roundhill Neocloud ETF (NCLD) plunged 12.3% to a fresh record low. The industrials sector (-4.1%) also faced substantial losses as companies tied to data center construction and expansion were caught in the selling.

Unlike Wednesday, when mega-cap hyperscalers largely weathered the weakness in AI infrastructure stocks, Thursday's retreat engulfed much of the market's established leadership. The Vanguard Mega Cap Growth ETF fell 5.8%, contributing to losses in the consumer discretionary (-3.7%) and communication services (-1.9%) sectors. The S&P 500 Equal Weighted Index (-2.8%) substantially outperformed the market-cap-weighted benchmark, illustrating the outsized impact of the largest stocks on the major averages.

Tesla (TSLA 343.69, -41.50, -10.77%) was among the hardest-hit mega-cap names, extending its post-election decline amid concerns that Democratic victories could bring increased scrutiny of Elon Musk's businesses, particularly a potential combination with SpaceX (SPCX 123.62, -12.30, -9.05%). The broader retreat in AI-related valuations compounded those concerns, while Tesla's recent earnings report offered limited reassurance about the profitability of its existing operations.

Elsewhere in the consumer discretionary sector, DoorDash (DASH 179.92, -18.67, -9.40%) faced additional selling pressure following Amazon's (AMZN 260.21, -5.82, -2.19%) announcement of a partnership with Uber (UBER 68.81, -1.06, -1.52%) to integrate Uber Eats into its shopping platform for Prime members. Expedia Group (EXPE 272.48, -43.40, -13.74%) also struggled after its Q4 outlook pointed to slower growth and margin compression.

Software stocks were another source of weakness, with the iShares Expanded Tech-Software Sector ETF (IGV) falling 4.3%. Palantir Technologies (PLTR 154.99, -16.71, -9.73%) extended its recent slide despite reporting better-than-expected quarterly results earlier in the week, as concerns about slowing bookings growth and its premium valuation continued to weigh on sentiment. AppLovin (APP 356.10, +84.35, +31.04%), however, was a notable exception to the widespread technology weakness, rallying sharply after topping Q3 earnings and revenue expectations, issuing upbeat revenue guidance, and announcing a $3.2 billion share repurchase authorization.

All 11 S&P 500 sectors finished lower, with the materials (-2.7%), financials (-2.8%), and health care (-2.5%) sectors among those facing sizable declines. The consumer staples (-0.7%) and utilities (-0.7%) sectors held up relatively well, but even defensive areas were unable to escape the selling.

The energy sector (-2.8%) also finished lower despite WTI crude oil futures rebounding $2.32 (+2.6%) to $90.55 per barrel following Wednesday's steep decline. The selling was equally pronounced outside the large-cap space, with the Russell 2000 (-4.6%) and S&P Mid Cap 400 (-3.9%) suffering sharp losses.

The severity of the retreat also drove a sharp increase in demand for downside protection, sending the CBOE Volatility Index soaring 60.8% to 26.69.

The sharp reversal left the major averages firmly lower for the week and highlighted how quickly concerns surrounding the AI investment cycle have spread into the broader market. What began as weakness in a relatively narrow group of semiconductor and infrastructure stocks has become a widespread retreat, with the loss of mega-cap leadership amplifying the damage across the major averages.

U.S. Treasuries had a strong showing on Thursday, bolstered by another round of gut-wrenching volatility in AI-related stocks that saw some safe-haven buying. The 2-year note yield settled down ten basis points to 4.49%, and the 10-year note yield settled down six basis points to 4.84%. 

• Russell 2000: +9.9% YTD
• S&P Mid Cap 400: +8.3% YTD
• S&P 500: +7.4% YTD
• DJIA: +7.2% YTD
• Nasdaq Composite: +4.6% YTD

Reviewing today's data:

• Nonfarm business sector labor productivity increased 3.6% in the third quarter (Briefing.com consensus: 3.1%) following an upwardly revised 2.1% increase (from 1.4%) in the second quarter. Unit labor costs decreased 0.7% (Briefing.com consensus: 1.4%) following an upwardly revised 1.9% increase (from 1.2%) in the second quarter.
  
  • The key takeaway from the report is that there has been a pickup in productivity that has curtailed labor cost inflation. That is a good combination for corporate earnings prospects.
• Initial jobless claims for the week ending October 31 decreased by 6,000 to 189,000 (Briefing.com consensus: 197,000), which is the lowest level since July. Continuing jobless claims for the week ending October 24 increased by 23,000 to 1.718 million.
  
  • The key takeaway from the report is that there simply isn't much layoff activity. That consideration is an offshoot of a demand environment that is still looked at by employers as being quite solid overall.
• 10/31 EIA Natural Gas Inventories +77 bcf (Prior +80 bcf)

[BRIEFING.COM] The S&P 500 (-4.0%) and Nasdaq Composite (-5.0%) remain on track for their worst finishes since April 2025 as heavy selling in mega-cap technology stocks continues to weigh on the broader market. The S&P 500 Equal Weighted Index (-2.8%) is also firmly lower, although its relative outperformance underscores the disproportionate impact of losses among the market's largest companies.

Tesla (TSLA 342.36, -42.83, -11.12%) is among the hardest-hit mega-cap names, plunging more than 10% today and bringing its decline since Tuesday night's election to approximately 14%. Democratic victories in Congress and Texas have raised concerns about increased political scrutiny of Elon Musk's businesses, particularly the potential merger between Tesla and SpaceX (SPCX 125.63, -10.29, -7.57%). The prospect of greater regulatory hurdles is adding to pressure from the broader AI infrastructure selloff, as investors reassess the valuations and substantial investment requirements tied to Tesla's autonomous driving, robotics, and other emerging businesses. The company's recent earnings report has offered limited support, with essentially flat revenue and a 56% decline in operating income highlighting the challenges facing its core automotive business.

[BRIEFING.COM] The S&P 500 (-3.5%), Nasdaq Composite (-4.4%), and DJIA (-2.9%) are a touch above their session lows as the market enters the final hour of the session.

Crude oil futures settled today's session $2.32 higher (+2.6%) at $90.55 per barrel, though that had not helped the energy sector (-1.1%), which reversed lower just before midday.

All eleven S&P 500 sectors remain lower, with only the consumer staples (-0.3%) and utilities (-0.8%) sectors holding losses narrower than 1.0%.

[BRIEFING.COM] The S&P 500 (-4.1%) is fighting to stay above its session low, which was set about 40 points above the 200-day moving average (7323). That level has not been breached since mid-March, when the benchmark index was trading in the 6600 area.

Top-weighed technology (-6.6%) has been mostly responsible for today's weakness, as five other sectors showed gains in early action, but the heavy selling in technology has instilled some fear, which has resulted in derisking across the board. All eleven sectors trade in negative territory at this juncture with six down 2.0% or more while the consumer staples sector (-0.4%) shows the slimmest loss after setting a fresh record high earlier today.

The aggressive selling across the board has given a boost to Treasuries, resulting in fresh November lows in yields on the 10-yr note and shorter tenors. The 10-yr yield is down seven basis points at 4.83% today and down 54 basis points from its 2026 peak that was set on October 7.

Precious metals have also drawn some increased interest with gold futures up nearly 4.5% over the past two sessions. The yellow metal hovers near $4115/ozt, looking to sustain this week's bounce from a brief dip below $4000/ozt, which marked a 13-month low.

[BRIEFING.COM] Defensive behavior remains pronounced this afternoon. The CBOE Volatility Index (VIX) has spiked 58% to 26.39 as demand for downside protection remains elevated amid the fallout in the AI trade.

Treasuries are also reflecting the more cautious posture. The 10-year yield is down seven basis points to 4.83%, and the Treasury rally has been paced by shorter tenors. Fed funds futures now imply a 66% probability of a December rate hike, down from 83% yesterday.

The S&P 500 consumer staples sector, down 0.4%, is exhibiting relative strength, but there is little appetite for equities broadly. Decliners lead advancers by better than 6-to-1 at the NYSE and better than 3-to-1 at the Nasdaq, showing that the selling extends well beyond semiconductor stocks.

The S&P 500 information technology sector has plunged 6.7%, with semiconductor stocks doing most of the damage. The PHLX Semiconductor Index is down 10.5%.

[BRIEFING.COM] The major averages continue to make new lows for the day, with the DJIA (-3.1%) entering negative week-to-date territory (-0.1%). The 30-stock average holds a modest week-to date loss when compared to the S&P 500 (-2.6% week-to-date) and Nasdaq Composite (-4.1% week-to-date).

Even with the information technology sector's sharp loss today (-6.6%; -7.4% week-to-date), the energy sector (-0.6%; -9.9% week-to-date) remains this week's worst performer. While crude oil is up nearly 3% today, it is still down 13% for the week.

[BRIEFING.COM] The stock market is facing a severe and increasingly broad selloff at midday, with the S&P 500 (-3.9%), Nasdaq Composite (-5.1%), and DJIA (-3.0%) all sharply lower as yesterday's post-election relief rally gives way to renewed concerns surrounding the AI trade. The Nasdaq Composite has fallen into correction territory, down more than 10% from its October 6 closing high, while the DJIA has slipped below its 50-day moving average, joining the other two major averages beneath that technical marker.

The retreat has been driven by a dramatic loss of leadership in semiconductor and AI infrastructure stocks, which were already notable pockets of weakness during yesterday's otherwise broad rally. The midterm election results, which gave Democrats control of both chambers of Congress, have fueled concerns that a more restrictive regulatory environment could slow AI data center development and jeopardize the elevated earnings growth expectations embedded in valuations across the industry.

The information technology sector (-6.5%) is bearing the brunt of the selling, with the PHLX Semiconductor Index plunging 10.8%. NVIDIA (NVDA 182.08, -18.05, -9.02%) has fallen into bear market territory, while Advanced Micro Devices (AMD 410.56, -78.22, -16.00%) and Arm Holdings plc (ARM 167.88, -23.92, -12.47%) are among the chipmakers facing particularly sharp losses. Qualcomm (QCOM 153.67, -19.52, -11.27%) is also under heavy pressure after its Q4 earnings report, as continued handset weakness and margin concerns overshadowed progress in its automotive and data center businesses.

Elsewhere, CoreWeave (CRWV 42.24, -6.18, -12.76%) has fallen to its lowest level since May 2025, and the Roundhill Neocloud ETF (NCLD 12.00, -1.99, -14.22%) has reached a fresh record low.

Unlike yesterday, when most mega-cap hyperscalers held up relatively well despite weakness elsewhere in the AI infrastructure trade, today's selling has spread to nearly every major technology leader. The Vanguard Mega Cap Growth ETF is down 5.4%, contributing to pronounced weakness in the consumer discretionary (-4.2%) and communication services (-1.9%) sectors. Tesla (TSLA 338.46, -46.73, -12.13%) is among the weakest mega-cap names, while DoorDash (DASH 169.80, -28.79, -14.50%) is facing additional pressure following Amazon's (AMZN 259.60, -6.43, -2.42%) new Uber Eats partnership. Expedia Group (EXPE 272.02, -43.86, -13.89%)is also sharply lower after its Q4 outlook pointed to slowing growth and margin pressure.

The AI-related selling has extended beyond technology stocks, weighing on companies tied to the construction and expansion of data centers and contributing to the industrials sector's 3.9% decline. The materials (-3.2%) and financials (-2.6%) sectors are also facing substantial losses, leaving all 11 S&P 500 sectors in negative territory. The defensive consumer staples sector (-0.3%) is showing relative resilience, while the energy sector (-0.6%) is limiting its decline as WTI crude oil futures rebound $2.20 (+2.5%) to $90.32 per barrel following yesterday's steep retreat. The recovery in oil prices, however, offers little relief to the broader market.

The magnitude and breadth of today's selling have contributed to a pronounced deterioration in investor sentiment, with the CBOE Volatility Index surging 53.6% to 25.51. The sharp increase in expected market volatility reflects heightened demand for downside protection and growing uncertainty surrounding the outlook for equities. Meanwhile, Treasuries have attracted safe-haven buying, with the 10-year yield falling seven basis points to 4.82% as investors reassess the outlook following the abrupt reversal in market leadership.

The weakness is not confined to the major averages, as the Russell 2000 (-4.3%) and S&P Mid Cap 400 (-3.7%) are also facing substantial losses. Declining issues have significantly outnumbered advancing issues on both the NYSE and Nasdaq, underscoring the widespread nature of the retreat. What began as concentrated selling in the AI infrastructure trade has evolved into a broad market rout that has more than erased yesterday's election-driven gains.

Reviewing today's data:

• Nonfarm business sector labor productivity increased 3.6% in the third quarter (Briefing.com consensus: 3.1%) following an upwardly revised 2.1% increase (from 1.4%) in the second quarter. Unit labor costs decreased 0.7% (Briefing.com consensus: 1.4%) following an upwardly revised 1.9% increase (from 1.2%) in the second quarter.
  
  • The key takeaway from the report is that there has been a pickup in productivity that has curtailed labor cost inflation. That is a good combination for corporate earnings prospects.
• Initial jobless claims for the week ending October 31 decreased by 6,000 to 189,000 (Briefing.com consensus: 197,000), which is the lowest level since July. Continuing jobless claims for the week ending October 24 increased by 23,000 to 1.718 million.
  
  • The key takeaway from the report is that there simply isn't much layoff activity. That consideration is an offshoot of a demand environment that is still looked at by employers as being quite solid overall.
• 10/31 EIA Natural Gas Inventories +77 bcf (Prior +80 bcf)

[BRIEFING.COM] The major averages remain near their session lows as selling pressure continues to weigh on nearly every corner of the market. Weakness is widespread even among blue-chip stocks, with Chevron (CVX 218.46, +1.50, +0.69%) and Coca-Cola (KO 95.88, +0.08, +0.08%) the only DJIA components clinging to modest gains.

Software stocks remain under pressure, with the iShares Expanded Tech-Software Sector ETF (IGV) down 4.1%. Palantir Technologies (PLTR 155.28, -16.42, -9.56%) is extending its post-earnings slide, bringing its decline over the past week to roughly 20% despite reporting better-than-expected Q3 results and raising its outlook. Slowing bookings growth and concerns surrounding its elevated valuation have weighed on shares amid the broader reassessment of AI-related stocks.

AppLovin (APP 347.78, +76.03, +27.98%) is a notable exception, rallying past its 50-day moving average (291.71) to its highest level since early August after topping Q3 earnings and revenue expectations. The company also issued stronger-than-expected revenue guidance for next quarter, helping shares buck the broader weakness in software stocks.

[BRIEFING.COM] The major averages continue to carve out fresh session lows, with the S&P 500 (-3.4%), Nasdaq Composite (-4.5%), and DJIA (-2.5%) extending their declines. All 11 S&P 500 sectors are now in negative territory, with the information technology sector (-5.7%) remaining the weakest by a wide margin as the PHLX Semiconductor Index plunges 9.7%.

Arm Holdings plc (ARM 167.89, -23.91, -12.47%) is among the semiconductor names facing heavy selling pressure despite reporting 27% year-over-year revenue growth and a doubling of data center royalties. The company's results highlighted continued momentum in AI-related demand, but smartphone weakness, higher expected operating expenses, and relatively modest overall royalty growth have tempered enthusiasm.

Meanwhile, the CBOE Volatility Index (VIX) has surged 42.8% to 23.72, reflecting a sharp increase in expected near-term market volatility. Often referred to as Wall Street's fear gauge, the VIX measures the market's expectation for S&P 500 volatility over the next 30 days based on options pricing. Its jump above 20 signals heightened investor uncertainty and increased demand for protection against further market swings, underscoring the deterioration in sentiment accompanying today's broad selloff.

[BRIEFING.COM] The stock market is facing a broad retreat today, with the S&P 500 (-2.9%), Nasdaq Composite (-4.1%), and DJIA (-2.2%) all posting sizable losses. The Nasdaq has fallen into correction territory, down more than 10% from its October 6 closing high, as selling pressure intensifies across the AI trade. The PHLX Semiconductor Index (-8.8%) is leading the weakness, weighing heavily on the information technology sector (-5.3%).

Unlike yesterday's session, when semiconductor and AI infrastructure stocks were notable pockets of weakness amid a broader rally, today's selling has spread across most mega-cap stocks and hyperscalers. The Vanguard Mega Cap Growth ETF is down 4.2%, reflecting the broader retreat in market leadership. Nine of the 11 S&P 500 sectors are trading lower, with the defensive consumer staples sector (+0.3%) holding a slim gain while the energy sector (+0.9%) outperforms as crude oil recovers a portion of yesterday's sharp decline and reclaims the $90 per barrel mark, adding another headwind for the broader market.

Weakness extends beyond the major averages, with the Russell 2000 (-3.3%) and S&P Mid Cap 400 (-2.7%) also firmly lower. Market breadth underscores the widespread selling pressure, as declining issues outpace advancing issues by nearly a 4-to-1 margin on both the NYSE and Nasdaq.

[BRIEFING.COM] The Nasdaq Composite (-5.1%) has entered correction territory with today's losses, falling more than 10% from its October 6 closing high. Tesla (TSLA 343.12, -42.07, -10.92%) and SpaceX (SPCX 121.16, -14.76, -10.86%) are once again among the weakest mega-cap stocks, with Tesla adding to pressure on the consumer discretionary sector (-4.4%).

Elsewhere in the sector, DoorDash (DASH 167.55, -31.04, -15.63%) is sliding after Amazon (AMZN 254.62, -11.41, -4.29%) announced a partnership with Uber (UBER 67.96, -1.91, -2.73%) that will integrate Uber Eats into its shopping platform for Prime members, raising concerns about increased competition in food delivery.

Expedia Group (EXPE 278.77, -37.11, -11.75%) is also under heavy pressure after its Q4 outlook pointed to slowing growth and margin compression, reversing yesterday's rally that followed strong results from Booking Holdings (BKNG 165.86, -5.11, -2.99%).

Homebuilders, however, are showing relative resilience, with the iShares U.S. Home Construction ETF down just 1.0% after surging nearly 8.0% yesterday.

[BRIEFING.COM] The stock market is off to a weak start, with the S&P 500 (-2.1%) surrendering its entire gain from Wednesday as heavy selling in the information technology sector (-4.9%) weighs on the broader market. Semiconductor stocks are facing particularly sharp losses, sending the PHLX Semiconductor Index down 7.9% to its lowest level since early April, while NVIDIA (NVDA 187.07, -13.06, -6.53%) has fallen into bear market territory. Weakness in AI infrastructure names is also continuing, with CoreWeave (CRWV 42.53, -5.89, -12.16%) dropping to its lowest level since May 2025 and the Roundhill Neocloud ETF (NCLD 12.03, -1.96, -14.01%) sinking to a fresh record low. Software stocks are struggling as well, with the iShares Expanded Tech-Software Sector ETF (IGV) down 3.0%.

Qualcomm (QCOM 155.80, -17.40, -10.04%) is adding to the pressure on chipmakers following its Q4 earnings report. Despite narrowly topping earnings and revenue expectations, the company issued mixed Q1 guidance as continued handset weakness and higher input costs weigh on profitability. Its automotive and emerging data center businesses remain bright spots, but investors are focusing on near-term margin pressure and the company's declining Apple-related revenue. Meanwhile, AppLovin (APP 361.17, +89.42, +32.91%) is a notable exception to the technology weakness, surging more than 30% after topping quarterly expectations, issuing strong revenue guidance, and announcing a $3.2 billion share repurchase authorization.

[BRIEFING.COM] The S&P 500 (-1.8%), Nasdaq Composite (-3.2%), and DJIA (-0.8%) are lower this morning as semiconductor stocks face another round of intense selling, while much of the broader market gives up a chunk of yesterday's broad gains.

The information technology sector (-4.3%) is sharply lower as the PHLX Semiconductor Index (-7.3%) gaps lower again today. Advanced Micro Devices (AMD 424.81, -63.97, -13.09%) is one of the worst-performing S&P 500 names after weathering yesterday's chip selloff following a solid earnings report, while other AI infrastructure names such as Bloom Energy (BE 168.90, -31.50, -15.72%) weigh on the industrials sector (-1.4%) as well.

Notably, today's tech weakness includes most mega-cap hyperscalers, which largely rallied yesterday as their head start in the AI infrastructure buildout cycle was touted as a potential advantage if a shifting political landscape slows the buildout. The Vanguard Mega Cap Growth ETF is down 3.1%, with the consumer discretionary (-2.6%) and communication services (-0.6%) sectors also moving lower.

Meanwhile, the defensive consumer staples (+1.0%), health care (+1.1%), and utilities (+0.8%) sectors see some rotational gains amid the weakness in tech and more growth-oriented stocks.

The energy sector (+1.5%) is also a standout as crude oil rebounds to just under $90 per barrel.

Stocks remain on track for a mixed open folowing this morning's batch of economic data. 

Initial jobless claims for the week ending October 31 decreased by 6,000 to 189,000 (Briefing.com consensus: 197,000), which is the lowest level since July. Continuing jobless claims for the week ending October 24 increased by 23,000 to 1.718 million.

The key takeaway from the report is that there simply isn't much layoff activity. That consideration is an offshoot of a demand environment that is still looked at by employers as being quite solid overall.

Nonfarm business sector labor productivity increased 3.6% in the third quarter (Briefing.com consensus: 3.1%) following an upwardly revised 2.1% increase (from 1.4%) in the second quarter. Unit labor costs decreased 0.7% (Briefing.com consensus: 1.4%) following an upwardly revised 1.9% increase (from 1.2%) in the second quarter.

The key takeaway from the report is that there has been a pickup in productivity that has curtailed labor cost inflation. That is a good combination for corporate earnings prospects.

U.S. equity futures point to a mixed open, with the S&P 500 futures currently trading eight points above fair value. 

Asian markets finished sharply mixed on Thursday, with semiconductor-heavy markets in Japan and South Korea suffering steep losses amid concerns about potential U.S. restrictions on AI data centers, while Chinese equities benefited from Beijing's continued market support and easing Middle East tensions. Japan's Nikkei fell 1.8% for its fourth consecutive decline as Ibiden (-16%), Advantest (-15%), and Kioxia Holdings (-13%) plunged, overwhelming gains in Toyota Motor (+17%) following an improved earnings outlook, Nintendo (+6%), and Fast Retailing (+5%). China's Shanghai Composite edged up 0.1% and the Shenzhen Component gained 1.2%, with CATL (+4%), NAURA Technology (+5%), and BYD (+1%) advancing as expanded equity-market financing helped offset weakness in energy shares, including PetroChina (-8%) and CNOOC (-7%). Hong Kong's Hang Seng surged 3.7% to a five-week high, led by Tencent (+5%), Xiaomi (+4%), Meituan (+6%), and Alibaba (+3%), with reports of approximately $11.5 bln in state-backed ETF purchases and more than CNY200 bln in share-buyback loan applications reinforcing confidence in Beijing's support measures. South Korea's KOSPI plunged 5.3%, with SK Hynix (-10%), Samsung Electronics (-8%), Hanwha Aerospace (-8%), and Doosan Enerbility (-7%) retreating amid renewed uncertainty surrounding AI infrastructure spending and U.S. technology policy. The nearly nine-percentage-point performance gap between Hong Kong and South Korea underscores the increasingly divergent market response to policy developments, with Chinese liquidity support contrasting sharply with the valuation and regulatory pressures facing semiconductor shares. India's Sensex rallied 2.6%, while Singapore's Straits Times Index gained 0.5%, extending the broader divergence between technology-heavy markets and other regional benchmarks.

• In economic data:
  • South Korea's September current account surplus totaled $61.46 bln (prior $46.11 bln).
  • Australia's September trade surplus widened to AUD2.826 bln (expected AUD0.940 bln; prior AUD0.184 bln), with exports up 2.3% m/m (prior +3.7%) and imports down 3.3% m/m (prior +6.2%).
  • Japan's October S&P Global Services PMI rose to 51.7 (expected 52.0; prior 51.3), while the Composite PMI slipped to 52.1 (expected 52.3; prior 52.3).
  • Singapore's September retail sales increased 1.7% yr/yr (prior +0.8%) and decreased 1.0% m/m (prior -0.9%).

European markets extend their post-election rally, with easing oil prices and bond yields supporting a rotation into consumer, financial, and industrial shares even as technology and defense stocks lag. Germany's DAX gains 0.8% and reaches record territory, with Zalando (+5%), Heidelberg Materials (+4%), MTU Aero Engines (+4%), and Daimler Truck (+4%) advancing, while Rheinmetall (-16%) plunges after lowering its earnings outlook despite strong quarterly results. France's CAC 40 rises 0.7%, led by luxury shares LVMH (+3%), Hermes (+3%), and Kering (+1%), despite September industrial production unexpectedly declining 0.5% m/m, while TotalEnergies (-3%) and STMicroelectronics (-2%) underperform. London's FTSE 100 climbs 0.6% after the Bank of England raises its benchmark interest rate by 25 basis points to 4.00%, with an 8-1 vote and a forecast for inflation to reach approximately 5% by mid-2027, while Next (+3%), Diageo (+3%), and Standard Chartered (+3%) benefit from favorable corporate developments and financial-sector strength. The broader economic backdrop remains uneven, with German factory orders rebounding 4.4% in September but Eurozone producer prices accelerating 11.1% yr/yr and construction activity remaining in contraction across several major economies. The STOXX Europe 600 advances 0.5%, while Italy's FTSE MIB gains 0.3% and Spain's IBEX 35 outperforms with a 1.4% increase, extending the region's gains despite persistent inflation and sector-specific earnings pressures.

• In economic data:
  • The Bank of England raised its benchmark rate by 25 basis points to 4.00%, as expected, in an 8-1 vote and projected CPI inflation near 5% by mid-2027.
  • Eurozone September PPI increased 2.5% m/m (expected +2.5%; prior +2.0%) and 11.1% yr/yr (expected +10.9%; prior +8.3%).
  • The Eurozone's October HCOB Construction PMI fell to 42.5 (prior 43.4).
  • Germany's September factory orders increased 4.4% m/m (expected +4.6%; prior -10.1%).
  • Germany's October Construction PMI fell to 41.6 (prior 43.5).
  • France's September industrial production decreased 0.5% m/m (expected +0.3%; prior -0.4%).
  • France's October Construction PMI fell to 38.8 (prior 39.8).
  • Italy's September retail sales increased 0.1% m/m (expected 0.0%; prior +0.3%) and 1.6% yr/yr (prior +0.5%).
  • Italy's October Construction PMI rose to 47.3 (prior 46.5).
  • The U.K.'s October S&P Global Construction PMI fell to 43.6 (expected 46.4; prior 46.1).
  • Switzerland's seasonally adjusted October unemployment rate was unchanged at 3.1% (expected 3.1%; prior 3.1%).

The S&P 500 futures currently trade 11 points above fair value.

Just released, the preliminary Q3 productivity reading increased 3.6% (Briefing.com consensus: 3.1%), following an upwardly revised 2.1% increase (from 1.4%) in Q2.

Unit labor costs decreased 0.7% (Briefing.com consensus: 1.4%), following an upwardly revised 1.9% increase (from 1.2%) in Q2.

Initial jobless claims for the week ending October 31 decreased by 6,000 to 189,000 (Briefing.com consensus: 197,000). The prior week's reading was revised to 195,000 from 194,000.

Continuing jobless claims for the week ending October 24 increased by 23,000 to 1.718 million. The prior week's reading was revised to 1.695 million from 1.701 million.

Equity futures point to a mixed opening this morning, with Dow futures once again leading the way following Wednesday's broad post-election rally. All three major averages posted sizable gains yesterday, but the DJIA stood out with a surge of more than 1,500 points, marking its best session since April 2025.

The rally followed Democratic victories in both chambers of Congress, with optimism surrounding potential bipartisan efforts to address affordability and a sharp decline in crude oil prices providing additional support.

However, semiconductor stocks, neocloud companies, and other names tied to AI infrastructure spending were notable pockets of weakness amid concerns that the election results could slow the pace of data center development. That weakness is carrying over into this morning's premarket trading and weighing on Nasdaq futures, with the VanEck Semiconductor ETF (SMH) down 3.4% ahead of the open.

Today's remaining economic calendar:

• 8:30 AM ET: Q3 Productivity-Prel; Briefing.com consensus 3.1%; prior 1.4%
• 8:30 AM ET: Q3 Unit Labor Costs-Prel; Briefing.com consensus 1.4%; prior 1.2%
• 8:30 AM ET: 10/31 Initial Claims; Briefing.com consensus 197K; prior 194K
• 8:30 AM ET: 10/24 Continuing Claims; prior 1701K
• 10:30 AM ET: 10/31 EIA Natural Gas Inventories; prior +80 bcf

In corporate news:

• AppLovin (APP 325.50, +53.75, +19.78%) is sharply higher following its earnings and guidance update.
• Toyota Motor (TM 217.00, +17.54, +8.79%) raised its fiscal-year operating profit forecast by 500 billion despite lowering its revenue outlook after first-half net income increased 26.1%.
• Qualcomm (QCOM 156.30, -16.89, -9.75%) is sharply lower in premarket trading despite narrowly topping Q4 earnings and revenue expectations and issuing in-line Q1 guidance.

Reviewing overnight developments:

According to Nikkei, regional trading was sharply mixed as weakness in semiconductor-heavy markets contrasted with strength in Chinese shares supported by policy measures.

In news:

• Nikkei reported that concerns about potential U.S. restrictions on AI data centers weighed on semiconductor shares in Japan and South Korea.
• Nikkei reported that roughly $11.5 billion in state-backed ETF purchases and more than CNY200 billion in share-buyback loan applications reinforced confidence in Beijing's market support.

In economic data:

• South Korea's September Current Account surplus $61.46 bln (prior $46.11 bln)
• Australia's September Trade Balance AUD2.826 bln (expected AUD0.940 bln; prior AUD0.184 bln), with Exports +2.3% m/m (prior +3.7%) and Imports -3.3% m/m (prior +6.2%)
• Japan's October S&P Global Services PMI 51.7 (expected 52.0; prior 51.3); Composite PMI 52.1 (expected 52.3; prior 52.3)
• Singapore's September Retail Sales +1.7% yr/yr (prior +0.8%) and -1.0% m/m (prior -0.9%)

Equity Markets:

• Japan's Nikkei : -1.8%
• Hong Kong's Hang Seng : +3.7%
• China's Shanghai Composite : +0.1%
• India's Sensex : +2.6%
• South Korea's Kospi : -5.3%
• Australia's All Ordinaries: +2.8%

The session features support from lower oil prices and bond yields alongside continued weakness in technology and defense shares.

In news:

• The Bank of England raised its benchmark rate by 25 basis points to 4.00% in an 8-1 vote and projected inflation near 5% by mid-2027.
• A lowered earnings outlook from a major German defense company added pressure to the sector despite strong quarterly results.

In economic data:

• Bank of England raised its benchmark interest rate 25 basis points to 4.00%, as expected, by an 8-1 vote; projects CPI inflation near 5% by mid-2027 Eurozone September PPI +2.5% m/m (expected +2.5%; prior +2.0%) and +11.1% yr/yr (expected +10.9%; prior +8.3%) Eurozone October HCOB Construction PMI 42.5 (prior 43.4)
• Germany's September Factory Orders +4.4% m/m (expected +4.6%; prior -10.1%); October Construction PMI 41.6 (prior 43.5)
• France's September Industrial Production -0.5% m/m (expected +0.3%; prior -0.4%); October Construction PMI 38.8 (prior 39.8)
• Italy's September Retail Sales +0.1% m/m (expected 0.0%; prior +0.3%) and +1.6% yr/yr (prior +0.5%); October Construction PMI 47.3 (prior 46.5) U.K. October S&P Global Construction PMI 43.6 (expected 46.4; prior 46.1)
• Switzerland's October Unemployment Rate 3.1% (expected 3.1%; prior 3.1%), seasonally adjusted

Equity Markets:

• STOXX Europe 600 : +0.5%
• Germany's DAX : +0.8%
• U.K.'s FTSE 100 : +0.6%
• France's CAC 40 : +0.7%
• Italy's FTSE MIB : +0.3%
• Spain's IBEX 35 : +1.4%

[BRIEFING.COM] The stock market staged a broad rally on Wednesday following Tuesday's midterm elections, with a sharp decline in crude oil prices and optimism surrounding potential bipartisan efforts to address affordability providing additional support. The S&P 500 (+1.6%), Nasdaq Composite (+1.4%), and DJIA (+3.0%) finished with sizable gains, although the S&P 500 fell just shy of closing above its 50-day moving average (7693). The advance was accompanied by a sharp decline in volatility, with the CBOE Volatility Index falling 19.4% to 16.78.

Equity futures reversed sharply higher overnight after President Trump acknowledged Democratic victories in both chambers of Congress, easing political uncertainty that had contributed to recent market volatility. The results also fueled speculation that lawmakers from both parties could find common ground on measures to reduce living costs, including potential tariff relief and lower energy prices. Democrats campaigned heavily on affordability issues, while Republicans could face additional pressure to address consumer concerns ahead of the 2028 elections.

The prospect of easing geopolitical tensions provided another significant catalyst. Crude oil futures settled $7.93 lower (-8.3%) at $88.23 per barrel, extending their week-to-date decline to more than 15%. Prices initially retreated after President Trump indicated that he had no immediate plans to launch military strikes against Iran, according to the Financial Times. Selling intensified following comments from presumptive incoming Senate Majority Leader Chuck Schumer, who expressed confidence that some Republicans would support a resolution to end the Iran war. The energy sector (-4.7%) finished as the day's worst performer by a wide margin.

Consumer-facing stocks were among the primary beneficiaries of the changing political and energy backdrop. The consumer discretionary sector (+4.3%) led the advance, with homebuilders showing particularly impressive strength as the iShares U.S. Home Construction ETF jumped 7.6%. Discount retailers also rallied on expectations that lower gasoline prices could improve household purchasing power, while declining diesel costs could provide some relief from freight expenses. Dollar Tree (DLTR 147.00, +12.93, +9.64%) and Dollar General (DG 141.64, +11.12, +8.52%) were among the notable outperformers. McDonald's (MCD 280.22, +17.18, +6.53%) also rallied following its mixed Q3 earnings report, which showed improving U.S. comparable sales trends toward the end of the quarter.

The advance was well distributed across the broader market, with the financials (+3.5%), real estate (+3.2%), materials (+3.1%), health care (+3.0%), communication services (+3.0%), and consumer staples (+3.0%) sectors all posting sizable gains. Notably, the financials, health care, and consumer staples sectors reached fresh all-time highs. CVS Health (CVS 79.96, -11.45, -12.53%) was an exception to the strength in health care, declining sharply after announcing plans to separate into two publicly traded companies by the first half of 2028.

Mega-cap growth stocks also participated in the rally, with the Vanguard Mega Cap Growth ETF gaining 1.5%, supported by strength in Microsoft (MSFT 555.80, +34.81, +6.68%) and Amazon (AMZN 266.03, +15.34, +6.12%). According to a thesis advanced by Needham, tighter restrictions on data center development after the Democratic victories in key states could benefit established hyperscalers that are further along in their infrastructure expansion, potentially reducing future capital spending requirements while improving returns on invested capital.

That prospect weighed heavily on companies more directly dependent on continued AI infrastructure investment. The information technology sector (+0.6%) significantly underperformed the broader market as the PHLX Semiconductor Index fell 3.1%. Concerns that Democratic control of Congress could slow the pace of data center construction overshadowed a strong quarterly update from Advanced Micro Devices (AMD 488.78, +4.88, +1.01%), which topped Q3 expectations and raised its 2027 growth outlook. The weakness extended to neocloud companies, with the Roundhill Neocloud ETF (NCLD 13.99, -1.40, -9.10%) falling to a fresh record low amid concerns that tighter restrictions on data center construction could undermine future growth prospects for companies heavily dependent on AI infrastructure spending.

The weakness also extended to AI infrastructure companies such as GE Vernova (GEV 832.85, -85.35, -9.30%) and Comfort Systems (FIX 1089.89, -195.24, -15.19%), which suffered sharp declines. As a result, the industrials sector (-1.1%) was the only other sector to finish lower, although 3M (MMM 193.95, +16.90, +9.55%) stood out after announcing a broad resolution of PFAS-related personal injury claims tied to firefighting foam litigation and authorizing a new $6 billion share repurchase program.

Wednesday's rally reflected a pronounced shift in market leadership, with consumer-oriented stocks and several previously overlooked areas benefiting from expectations for lower energy costs and potential policy changes following the elections. The breadth of the advance was encouraging, although persistent weakness in semiconductors and AI infrastructure stocks raised questions about the rally's durability, particularly with the S&P 500 unable to reclaim its 50-day moving average by the close. 

U.S. Treasuries rallied on Wednesday, sending yields on the 10-year note and shorter tenors to their lowest closing levels since early September. The 2-year note yield settled down three basis points to 4.59%, and the 10-year note yield settled down six basis points to 4.89%. 

• Russell 2000: +15.1% YTD
• S&P Mid Cap 400: +12.7% YTD
• S&P 500: +12.3% YTD
• DJIA: +11.0% YTD
• Nasdaq Composite: +10.7% YTD

Reviewing today's data:

• 10/31 MBA Mortgage Applications Index -1.2% (Prior 3.4%)
• Oct ADP Employment Change 86K (Briefing.com consensus 75K; Prior 86K revised from 90K)
• Sep Trade Balance -$105.0B (Briefing.com consensus -$108.4B; Prior -$105.7B revised from -$105.6B)
• Oct S&P Global U.S. Services PMI - Final 56.1 (Prior 57.9)
• Oct ISM Non-Manufacturing Index 54.5 (Briefing.com consensus 54.8; Prior 54.9)
• 10/31 EIA Crude Oil Inventories -0.865M (Prior -1.892M)