[11/9-11/13] Weekly Stock Market Report: Outlook for Next Week

A 3,800-yen sharp rebound from a historic crash, the shock of the NVIDIA CEO’s resignation, and the proven EPS growth power demonstrated by the completion of domestic earnings reports

1. Weekly Market Overview: A fierce rebound recovering from the 3rd largest crash in history, and the unprecedented management risk that struck over the weekend

The US and Japanese stock markets for the second week of November 2026 (November 9-13) began with a dramatic autonomous rebound from the historic panic selling recorded the previous weekend. However, toward the latter half of the week, the market was hit by concerns over resurging inflation in the US and the unprecedented shock of a scandal and the resignation of Jensen Huang, CEO of NVIDIA, the company that has been driving the global AI semiconductor market, making it a week of intense volatility in investor sentiment.

The Nikkei Stock Average on the previous weekend (November 6) recorded a decline of 3,643 yen from the previous day, the third-largest drop in history, due to excessive caution regarding AI investment regulations following the US midterm election results, and it briefly crashed to the 57,000-yen level. However, entering this week, views that it had been “oversold” led to a fierce wave of buying from the start of the week. The fact that the earnings of emerging AI cloud companies (Neo-Cloud) in the US were not as bad as feared, combined with a series of strong performances in the July-September earnings reports of domestic companies that reached their peak, acted as a tailwind. The Nikkei Stock Average surged by approximately 3,800 yen in just three days from Monday to Wednesday. It completely recovered the more than 3,600-yen drop lost in a single day the previous weekend, showing the strength to jump back to the 61,000-yen level in one go.

However, from Thursday (the 12th) onward, the market atmosphere changed completely again. In addition to the October Consumer Price Index (CPI) announced in the US exceeding market expectations, which raised concerns about significant additional interest rate hikes, shocking news spread around the world that NVIDIA founder and CEO Jensen Huang was forced to resign and was dismissed by the board of directors due to an affair scandal with a Chinese industrial spy. Due to the materialization of this “key person risk” (management risk) and concerns over new US-China tensions, selling spread again to semiconductor stocks, mainly those related to GPUs, and the Tokyo market at the end of the week saw a heavy trend due to profit-taking.

Nevertheless, with the July-September earnings of major domestic companies almost all released by November 13, it was confirmed that the earnings per share (EPS) of Japanese companies are rising strongly, so the market as a whole did not collapse, and the Nikkei Stock Average ended the trading session firmly maintaining the 60,000-yen level.

2. Movements in the US, Japanese, and Asian stock markets over the week

To accurately understand this week’s market development, it is necessary to unravel step-by-step the structure of the panic selling that engulfed all of Asia the previous weekend, the sharp recovery in the first half of the week, and the complex shock of macro (interest rates) and micro (NVIDIA issue) factors that occurred in the latter half of the week.

[Sharp rebound in the first half of the week] Reversal from the semiconductor panic selling across Asia and a 3,800-yen rise

On November 5, the previous weekend, the Philadelphia Semiconductor Index (SOX Index) crashed by 12% in a single day in the US market, and the Nikkei Stock Average plummeted by 3,643 yen on the 6th. Behind this sharp drop was the existence of large investors who took the extreme action of “removing all AI and semiconductor-related stocks from their portfolios (selling everything)” due to strong concerns about AI data center regulations, and other investors followed suit, leading to a situation where selling triggered more selling. As a result, the decline was not limited to Japanese stocks, but also caused sharp drops in East Asian markets with high weightings in the semiconductor industry, such as the KOSPI index in South Korea and the Weighted Index in Taiwan.

However, from the beginning of the week on the 9th (Monday) to the 11th (Wednesday), the market regained its composure. Based on fundamentals, the view that it was clearly “oversold” spread, and buying aimed at an autonomous rebound flooded in. In particular, in the US market, the earnings of Neo-Cloud-related companies, whose stock prices had been sluggish since the “CoreWeave shock” in mid-October, were announced, and the fact that the content was confirmed to be “not as bad as the market feared” served as a powerful tailwind. Re-evaluation buying entered AI-related stocks that had peaked and been sold off, and the Nikkei Stock Average recorded a total rise of approximately 3,800 yen over the three trading days of the 9th, 10th, and 11th, achieving a magnificent V-shaped recovery to the 61,000-yen level.

[Change in the latter half of the week ①] Upward surprise in US October CPI and the emergence of “0.5% significant interest rate hike” expectations

The first brake on the market, which had been strengthening its recovery trend, was the October Consumer Price Index (CPI) announced in the US on the 11th. Because the announced CPI was a strong figure exceeding market expectations, concerns about additional interest rate hikes by the US Federal Reserve (FRB) intensified all at once.

In particular, what the market was wary of regarding this CPI upward surprise was the fact that the speed of price increases (momentum) was faster than expected. As a result, a hawkish view emerged in parts of the bond and interest rate markets that “rather than staying at the usual pace of 0.25% per hike that the market had priced in so far, they might expand the hike width to 0.5% in meetings from the next one onward to suppress inflation all at once.” If the policy interest rate hike width expands rapidly, the “expected PER (price-to-earnings ratio)”, which is the valuation of stocks, will be strongly suppressed through a sharp rise in long-term interest rates, which became a factor that made the upside of the stock market heavy in the latter half of the week.

[Change in the latter half of the week ②] NVIDIA CEO Huang’s “Chinese industrial spy scandal and resignation”

The decisive cold water poured on the market, which had been moving firmly despite interest rate concerns due to the CPI upward surprise, was the shocking scandal surrounding NVIDIA CEO Jensen Huang that surfaced from after-hours trading in the US on the 11th to the 12th.

The suspicion that “CEO Huang may have been in an affair with a Chinese industrial spy,” which had been rumored by some for some time, was reported as a major scandal, and it was conveyed that NVIDIA’s board of directors, taking the situation seriously, had begun considering the dismissal and resignation of CEO Huang. Furthermore, it subsequently developed into a situation where CEO Huang himself admitted the facts and resigned as CEO.

NVIDIA is a company at the center of the global AI revolution, and Jensen Huang is an absolute charismatic leader who has led the company since its founding. The fact that its top leader was forced to step down not just due to private life issues but in a case involving a “Chinese industrial spy” was strongly feared not only as anxiety about the company’s management structure but also as “concerns about the leakage of advanced AI semiconductor technology” and “a serious seed of new US-China conflict.” Following this report, NVIDIA stock was subjected to intense selling from after-hours trading on the 11th to the US market on the 12th, sinking to its lowest level in about 1 year and 4 months, and panic selling spread in the Tokyo market to groups of stocks directly linked to NVIDIA’s GPU supply chain.

In the Japanese stock market on Friday the 13th, although the panic selling of AI semiconductor stocks calmed down for a while, the reaction to the 3,800-yen surge from the beginning of the week and position adjustments and profit-taking ahead of the weekend were likely to occur, so the Nikkei Stock Average ended the trading session with limited gains. Even so, the reason it was able to maintain the high price range without falling back to the low price range of the 57,000-yen level was because the strong earnings content of Japanese companies, which had been almost entirely released by that day, functioned as a powerful breakwater.

3. Major Factors Moving the Market and Notable Sectors/Individual Stocks

In this week’s Tokyo stock market, a clear “selection (polarization)” occurred within AI and semiconductor stocks due to the Nvidia issue. Additionally, materials and tech stocks that announced structural reforms and upward revisions, bank stocks benefiting from interest rate hike expectations, and strong-performing domestic demand and value stocks drove the market.

① Semiconductor materials and parts stocks that surged on structural reforms and upward revisions: Resonac HD, Toray

While the overall market was shaken by Nvidia reports, major stocks in the materials and chemicals sector rose significantly by demonstrating their solid earnings power and management reforms.

• Resonac Holdings: The company significantly raised its core operating profit forecast for the current fiscal year (ending December 2026), which indicates profit from its core business, to “250 billion yen,” 2.4 times higher than the previous fiscal year. Its semiconductor materials business, including materials for semiconductor back-end processes, is performing extremely well, marking the second upward revision to its earnings this fiscal year. Furthermore, what the market highly evaluated was the “sale of the graphite electrode business” announced at the same time. The clear strategic shift of “selection and concentration (structural reform)”—divesting a traditional business susceptible to market fluctuations and concentrating management resources on the high-growth semiconductor materials business—strongly pushed up the stock price. Also, other materials stocks such as semiconductor silicon wafer giant SUMCO saw renewed buying.

• Toray: The company revised upward its consolidated net profit forecast for the current fiscal year (ending March 2027) to “110 billion yen,” a 38% increase from the previous fiscal year. Driven by the global expansion of AI investment, products such as release films for multi-layer ceramic capacitors (MLCC), which are essential for data centers and electronic devices, are performing well. Furthermore, the simultaneous announcement of a “share buyback of up to 70 billion yen”, which accounts for a significant portion of outstanding shares, came as a positive surprise and attracted strong buying.

② Semiconductor stocks: The contrast between those hit by the Nvidia CEO’s resignation and those bought back

Following reports of CEO Jensen Huang’s resignation, the fortunes of stocks within the semiconductor sector diverged sharply based on their “dependence on Nvidia (GPU).”

• Stocks that fell due to association (Ibiden, Advantest, TSMC): In the Tokyo market on Thursday, Ibiden, which supplies advanced IC package substrates for Nvidia’s AI semiconductors (GPUs), and Advantest, which has a deep business relationship in high-performance testing equipment (testers) for GPUs, as well as some capacitor-related stocks, fell sharply due to association-based selling. Also, in overseas markets, Taiwan’s TSMC, which handles the entire manufacturing of GPUs for Nvidia, suffered a severe decline toward the end of the week (with a slight rebound on Friday). For TSMC, which has built a solid partnership over many years, including a personal relationship of trust with CEO Huang, the uncertainty regarding how the relationship with Nvidia and ordering policies might change after Mr. Huang’s departure was viewed negatively.

• Semiconductor stocks that were bought steadily (Socionext, Renesas Electronics, etc.): On the other hand, among AI and semiconductor-related stocks, Socionext, which handles custom semiconductors (ASIC) without excessive dependence on Nvidia’s GPUs, Renesas Electronics, a major microcontroller manufacturer, and some semiconductor manufacturing equipment makers saw solid buying on the back of strong earnings and a sense of undervaluation, with notable movements in stock price recovery.

③ The “banking sector” bolstered by rising interest rates and expectations of a 0.5% rate hike

Following the strong results of the US October employment report released at the end of the previous week, and in response to the higher-than-expected US October CPI and hawkish remarks by Fed officials, the rise in Japanese and US interest rates, including “expectations for an expansion of the rate hike width to 0.5% at once” in the US, was strongly recognized. While the sharp rise in interest rates is a headwind that suppresses the expected PER of growth stocks, for the banking sector, it is a direct profit-boosting factor: “rising policy and market interest rates = higher lending rates and expansion of interest margins (spreads).” Therefore, straightforward buying from institutional investors flowed into bank stocks, including megabanks and regional banks, serving as a support for the market.

④ Dining and value stocks shining with good earnings: Zensho HD, trading companies, and construction sector

Even among domestic demand and value stocks, active funds flowed into groups of stocks where upward earnings revisions were confirmed through interim financial results.

• Zensho Holdings: The company revised upward its consolidated net profit forecast for the current fiscal year (ending March 2027) to a 26% increase from the previous fiscal year. Its main beef bowl chain “Sukiya” and conveyor belt sushi chain “Hama-sushi” are performing extremely well, maintaining high customer attraction and average spending per customer even under inflation, and strong stock price increases were notable in parts of the dining sector, including this company, this week.

• Trading companies and construction sector: As the earnings announcement season passed, it was confirmed that the earnings of value stocks such as general trading companies and major construction companies (general contractors) were “revising upward in a better direction” than the market had anticipated. The construction sector, in particular, continued to see steady inflows of investment funds because there was a phase where domestic interest rates temporarily fell and improvements in profitability at the time of order receipt appeared as actual financial figures.

4. Important events and notable indicators for next week (3rd week of November)

Next week (November 16-20) will be an extremely important week as the confirmation of macroeconomic indicators after the domestic earnings announcement season overlaps with the “Nvidia earnings announcement,” which holds the fate of the global stock market.

[Main schedule for next week]

• November 16 (Mon): Japan’s preliminary Q3 real GDP (Gross Domestic Product) announcement, and major statistical announcements such as China’s October retail sales and industrial production.

• November 17 (Tue): US October Retail Sales announcement.

• November 18 (Wed): US FOMC Minutes (from the Oct 27-28 meeting) release, US NVIDIA earnings announcement.

• November 19 (Thu): Japan September Machinery Orders release.

• November 20 (Fri): Japan October National Consumer Price Index (CPI) release.

Focus Point 1: NVIDIA’s Earnings Announcement and the Future of the ‘Post-Jensen Huang Regime’

Next week, what investors around the world will be watching with bated breath is the earnings announcement of US semiconductor giant NVIDIA scheduled for Wednesday the 18th.

The biggest focus of this NVIDIA earnings report is ‘how the company’s management structure (governance) will change going forward, more so than the actual current performance figures themselves.’ Regarding performance, there are no concerns about the explosive growth in demand for AI semiconductors (GPUs) for data centers, and the business environment itself, where the entire semiconductor market is expected to grow by about 70% next year, is extremely robust.

However, with Jensen Huang, the CEO who has been the flag-bearer for that bullish outlook and has reigned at the top since NVIDIA’s founding, leading everything from technology development to sales strategy, suddenly resigning due to this scandal, a serious ‘management risk’ has emerged. At present, there is no concrete blueprint for whether a successor CEO will be recruited from outside or promoted from within, nor how the future R&D structure or relationships with major customers and suppliers (such as TSMC) will be maintained. While it is a reality that it takes a considerable amount of time to rebuild an organization and management governance structure from the ground up, the biggest litmus test for the revival of the AI semiconductor market will be whether the management team can present clear decisions and messages that convince investors regarding future structure building and business direction at this earnings announcement.

Focus Point 2: US October Retail Sales (Announced Nov 17) and the Resilience of Consumption

The most important macroeconomic indicator next week, which will influence the pace of additional US interest rate hikes, is the ‘US October Retail Sales’ to be announced on Tuesday the 17th.

Currently, the market consensus expects October retail sales (headline) to be ‘almost flat’ month-on-month. At first glance, it may appear that consumption is stagnating, but this is due to the impact of rising interest rates increasing the burden of auto loan interest, leading to a decline in auto sales. What should be noted is ‘Retail Sales Excluding Autos’, which is expected to maintain solid positive growth. If it is confirmed that personal consumption, excluding autos, is growing steadily despite an environment of rising prices and policy interest rates, it will lead to the assessment that ‘interest rates are not yet in the territory of being high enough to destroy consumption, and the US real economy is healthy.’ If the results are as resilient as market expectations, it will be a positive factor to dispel investors’ anxiety that ‘the US economy might stall due to excessive interest rate hikes by the Fed.’

Focus Point 3: US Manufacturing Business Sentiment (Correlation between NY Fed/Philadelphia Fed Indices and ISM)

Another important indicator for measuring the US real economy is the ‘Fed Manufacturing Business Indices (New York Fed and Philadelphia Fed)’ which will be released sequentially from next week. Looking at the indices for these two regions, which have a high concentration of manufacturing in the US, the New York Fed index has remained above the ‘zero’ line—the dividing line between good and bad business conditions—for seven consecutive months, and the Philadelphia Fed index for five consecutive months, confirming that the US manufacturing sector is driving corporate performance and the overall economy extremely strongly. Reflecting the strength of these two Fed indices, the nationwide ‘ISM Manufacturing Index’ announced at the beginning of each month has also been drawing a strong upward trend this year.

Since the Democratic victory in the US midterm elections, there have been concerns in the market about ‘stricter regulations on the construction of AI data centers,’ but if these Fed indices and the ISM Manufacturing Index maintain strong levels similar to the previous month, it will prove that ‘even if there are political concerns, the actual business sentiment on the ground for manufacturing and capital investment has not deteriorated at all.’ With the strength of the real economy confirmed, a pattern of pushing stock prices up again is expected.

5. Medium- to Long-Term Market Outlook and Investment Strategy

We will summarize the overall picture of the July-September (first half) earnings of Japanese companies, which have mostly been released as of today (November 13), and present data analysis on the ‘true downside support’ of Japanese stocks during a period of rising interest rates.

The Truth Revealed by Completing Earnings: ‘Market-Specific Estimated EPS’ and the Strong Rise in Profit Growth Rates

As of today, November 13, the first-half earnings announcements by Japanese companies with March fiscal year-ends have been almost entirely completed. Normally, when looking at the performance trends of the entire market, the Nikkei Stock Average or TOPIX expected EPS (earnings per share) are used, but these are easily influenced by the replacement of adopted stocks or some stocks with high contribution, and there are aspects where they do not necessarily accurately reflect the state of the entire market.

Therefore, we focus on the trends of ‘Estimated EPS and profit growth rates for each of the Prime, Standard, and Growth markets’ calculated from data such as market-specific market capitalization and expected PER published daily in the Nihon Keizai Shimbun. Examining the movement of estimated EPS throughout this earnings announcement season reveals a surprisingly strong reality.

• TSE Prime Market and Standard Market: As daily earnings announcements progressed, the estimated EPS continued to rise steadily. At the same time, the ‘expected profit growth rate’ for the current fiscal year has also been rising higher with each earnings report, clearly proving that the profitability of Japanese large-cap and mid-cap stocks is expanding beyond the market’s prior assumptions.

• TSE Growth Market: While the growth rate has slightly declined only in the Growth Market, this is merely a minor adjustment from an extremely high expected growth of “60% profit increase” to a “55% profit increase” due to downward performance revisions by some companies, and it continues to maintain an extremely high profit growth rate.

The power of “EPS growth” to counteract the “PER compression pressure” caused by high interest rates

Currently, with the rise in consumer prices (CPI) being a global concern starting with the United States, the environment is prone to strengthening expectations of interest rate hikes by central banks. Theoretically, as interest rates rise, the discount rate for stocks increases, making the stock valuation metric “expected PER” inevitably prone to decline (contraction). This week, we saw instances where PER was suppressed following the upside surprise in US CPI.

However, stock prices are determined by the multiplication of “EPS (Earnings Per Share) × PER (Price-to-Earnings Ratio)”. Even if the upside of PER is suppressed by rising interest rates, as proven by the July-September earnings results, if the reality of Japanese companies, “Earnings Per Share (EPS)”, continues to grow strongly, it acts as a powerful engine to push up the entire stock price. The greatest driving force that allowed the Nikkei Stock Average to recover from the plunge to the 57,000 yen level last week—where people feared “what will happen from here”—to the 61,000 yen level this week is this “unwavering expansion of EPS for Japanese companies.”

Future practical investment strategies

Based on these analyses, the strategies that investors should keep in mind for the market from next week onwards are as follows.

1. Calm assessment of the Nvidia issue and selection of semiconductor stocks: The resignation of Nvidia CEO Huang is shocking news, but the actual demand for AI semiconductors has not disappeared. While calmly assessing the direction of the new management structure to be presented at the Nvidia earnings announcement on the 18th, it is effective for the time being to avoid excessive concentration on the single theme of GPUs and to adopt a stance of selecting “semiconductor material and electronic component stocks that are reliably profiting from the widening base of AI investment, accompanied by structural reforms and share buybacks,” such as Resonac Holdings and Toray, or stocks with unique domains like Socionext and Renesas Electronics.

2. Utilizing “banks, value stocks, and high-performing domestic demand stocks” that benefit from rising interest rates and strong earnings: In phases where high interest rates are a concern, such as expectations for a wider range of US interest rate hikes, bank stocks, where the expansion of lending margins is directly linked, serve as a powerful hedge and source of return for a portfolio. In addition, by combining general trading companies, construction, and high-performing domestic demand stocks with strong price-pass-through and customer-attraction capabilities, represented by Zensho Holdings, whose earnings upside has been confirmed through financial results, it is possible to manage investments robustly against noise from the external environment.

6. Summary

The stock market in the second week of November 2026 faced a trial again after a sharp rebound of 3,800 yen that completely made up for the historic crash of the previous weekend in just three days, as it was confronted with an unprecedented scandal involving the upside surprise of the US CPI and the resignation of Nvidia CEO Jensen Huang.

However, what was quietly and decisively progressing behind the intense news flow was the “overwhelming earning power of Japanese companies (expansion of EPS)” proven by the completion of the July-September earnings season. Even under the headwinds of rising interest rates pushing down PER, the fact that companies in the Prime and Standard markets are steadily accumulating profits is the true protagonist that pulled the Nikkei Stock Average back from the brink of the 57,000 yen level to the 60,000 yen level.

Next week, we have the confirmation of governance under the “post-Huang regime” at Nvidia’s earnings announcement, which is attracting global attention, as well as important indicators such as US October retail sales and Japan’s July-September GDP preliminary figures. While keeping a close eye on the aftermath of the sudden management risk, believing in the essential bullish factors of the resilience of the real economy and the strong EPS growth of Japanese companies, and steadily allocating funds to excellent stocks that promote structural reform and shareholder returns will be the royal road investment strategy for the year-end market.