US Stock Market Weekly Summary: Week of 2026/11/02

AI market shaken again. Midterm elections and employment data rock the market.

This week’s US market was a week where “caution toward AI-related stocks intensified further, and the market was swayed by politics and economic indicators.”

In the US midterm elections, the Democratic Party regained the majority in both the House and the Senate.

The market rose initially, but then plummeted due to concerns over stricter regulations on AI data center construction.

Meanwhile, Friday’s employment report was stronger than expected, and semiconductor stocks also rebounded.

However, the Nasdaq has fallen for four consecutive weeks.

■ Weekly Market Summary

• NY Dow: 51,285.73 / -0.9%

• S&P 500: 7,376.86 / -2.7%

• Nasdaq: 24,579.42 / -3.4%

• Russell 2000: 2,754.11 / -2.1%

On Friday, the Nasdaq rebounded by +1.1%, but all four major indices fell for the week.

■ Key Themes

1. What changed with the US midterm elections?

In the US midterm elections on November 3rd, the Democratic Party regained the majority in both the House and the Senate.

Politically, there is a possibility that the Trump administration will need the cooperation of Congress more often.

What is important for the market is regulations on AI data center construction and power supply issues.

Going forward, attention will be focused on how state and local government permits, power grid development, and construction costs will impact data center projects.

However, construction plans will not necessarily stop just because of the election results. It is necessary to check individual regulations and policy changes.

2. AI stocks plummet. Now both regulation and profitability are issues

In the US market on November 5th,

• S&P 500: -4.36%

• Nasdaq: -5.52%

• NY Dow: -3.44%

saw a significant decline.

According to Reuters, the Nasdaq saw its largest drop since April 2025.

What is important here is the change from last week.

Last week: Will massive investment in AI generate profits?
↓
This week: Will those investment plans themselves be delayed due to regulations and power issues?

This concern has been added.

Even if demand is strong, if data centers cannot be operational as scheduled, the return on investment will be delayed.

On Friday, AMD rose about 11% and NVIDIA rose about 2.8%, but this alone cannot be judged as resolving the caution.

3. Employment statistics are stronger than expected

The October US employment statistics released on November 6th were:

.

The number of employed persons significantly exceeded market expectations, easing concerns that the labor market is rapidly collapsing.

However, it is not all good news for the stock market.

Strong employment → Easier for the Fed to raise interest rates further
→ Headwinds for stock valuations

This is also a factor.

We must consider the resilience of the US economy and the caution regarding monetary tightening simultaneously.

4. What we learned from earnings: Not all AI companies are the same

This week’s corporate earnings revealed not only the growth potential of AI-related companies but also the differences between their businesses.

AMD

• Revenue: $13.377 billion / +45% YoY

• GAAP Diluted EPS: $1.46

• Non-GAAP Diluted EPS: $2.09

• Data Center segment revenue: +97% YoY

It was confirmed that demand for AI semiconductors and server CPUs remains strong.

Apple

With strong performance in iPhone and services, Apple set a new quarterly revenue record.

Palantir

The strength of AI software demand has been confirmed. On the other hand, there is also caution regarding contract trends and high market expectations.

Qualcomm

Semiconductor sales for smartphones were $5.14 billion, a 26% decrease compared to the same period last year.

While they are expanding their AI-related business, the existing smartphone business is in a difficult situation.

Judging from these earnings, AI demand itself has not disappeared.

However, even within the AI sector, market evaluation is divided based on growth rates, profit margins, funding, and business structure.

5. Crude oil prices fell significantly. However, Middle East risks remain.

The crude oil settlement prices on November 6 were:

• WTI: $90.83

• Brent: $98.32

Brent fell by approximately 17% for the week, and WTI also fell by approximately 13%.

Expectations that tensions between the US and Iran would ease after the midterm elections led to selling in crude oil.

However, attacks on tankers near the Strait of Hormuz have been reported, so supply risks have not been resolved.

Lower crude oil prices may reduce cost burdens for companies, but continued caution regarding sudden price changes is necessary.

6. Significant impact on the Japanese market

The Nikkei Stock Average on November 6 was 57,434.77 yen

This is a weekly decline of approximately -9.3% from 63,290.11 yen on October 30.

Since the market was closed on November 3 for Culture Day, there were only 4 trading days this week. The sell-off in US AI-related stocks has spread to Japanese semiconductor-related stocks.

However, in the case of the Japanese market, not only US stocks but also the yen exchange rate and domestic interest rates are important.

In particular, going forward, I would like to confirm how delays in data center construction plans will affect demand for semiconductor manufacturing equipment and power facilities.

Personal Summary

Last week, I raised the question of whether the massive investments in AI would truly yield corresponding profits. This week, new uncertainties regarding politics, regulation, and energy issues have been added to that.

Judging by earnings reports like AMD’s, AI demand remains strong.

However, strong demand alone does not necessarily mean stock prices will rise.

Going forward, I will focus particularly on the following points:

• Whether data center construction proceeds as scheduled

• Whether profits and free cash flow commensurate with capital expenditures are generated

• Whether earnings forecasts for AI-related companies begin to be revised downward

This is exactly the part I have been concerned about for some time.

However, just because stock prices have fallen significantly does not mean I intend to rush into buying.

Just as a boxer who has been knocked down remains damaged even if they get up immediately, I believe the stock market also tends to have unstable price movements immediately after a sharp drop.

I will simply continue my core-satellite strategy.

Do not buy unnecessarily. Basically, do not sell.

My investment policy remains unchanged.

■ Points to watch for next week / Critical hurdles

Next week is November 9th to 13th.

• November 10 (Tue): US October CPI

• November 11 (Wed): Veterans Day in the US. US stock market is open for regular trading, US bond market is closed

• November 13 (Fri): US October PPI

• Funding and regulatory trends for AI data center-related companies

• Speculation regarding an additional Fed rate hike in December

• Crude oil prices and the US-Iran situation

• The Nikkei 225 and the stabilization of semiconductor-related stocks

CPI and PPI are important for considering the future interest rate outlook.

What I am particularly cautious about is the possibility that even if AI stocks rebound, earnings forecasts and investment plans may continue to deteriorate.

■ Summary

To summarize this week in one phrase,

“AI demand is strong. However, the environment to realize that growth has become tougher” was the theme of the week.

Semiconductor company earnings are strong.

However, data center construction requires power, capital, and permits.

Moving forward, we need to look not only at the sales growth of AI-related companies but also at whether capital investment is translating into profits and cash flow.

And just because a stock has plummeted does not mean it is cheap.

Has the reason for the stock price decline been resolved?

I want to keep checking that while I continue to observe the market calmly next week.

This blog is intended for general information purposes regarding investment and does not recommend any specific products or transactions. Additionally, generative AI is used in some parts of the articles to assist with organizing information and drafting text. While I verify the content as much as possible, I do not guarantee the accuracy or completeness of the information. Please make final investment decisions based on your own situation and risk tolerance, and at your own responsibility.

I write a note for investors. Except for some analytical articles and earnings-related content, it is published almost entirely for free.