Midterm elections, earnings and jobs data loom for an AI-wary US stock market

what happened

According to Reuters, investors face several tests next week at once: the US midterm elections, a heavy wave of corporate earnings and the monthly jobs report. Worries about AI were stoked by disappointing quarterly results from Alphabet and Amazon, both spending huge sums on data centers, and by Intel shares sliding nearly 29% on Friday. That day the S&P 500 fell 1.8% and the Nasdaq Composite lost 2.9%.

On Tuesday the vote will decide whether Democrats can take control of Congress from Donald Trump's Republicans. Democrats are widely expected to win the House of Representatives, while the Senate remains in doubt. Analysts say tighter scrutiny of data centers and AI rules could hit tech stocks, and possibly Wall Street banks and crypto firms as well.

Earnings growth has still been strong: according to LSEG IBES data, with over half of S&P 500 companies reported, third-quarter profits were on pace to rise 31.6%. Yet Caterpillar shares dropped 9% after its report, even though demand for its power equipment from data centers was strong, showing how harshly markets punish any disappointment.

why it matters

The main risk for markets now is the high bar set for companies tied to AI. Reports from Apple, AMD, Qualcomm and Palantir next week will show how durable the financing and return story is. October's jobs data will be a check on an economy that grew at its fastest pace in a year in the third quarter.

market impact

US stocks and AI companies: pressure from doubts about AI returns and the risk of tougher regulation

• ▼US tech stocks and AI companies pressure down — doubts about AI investment returns and the risk of tougher regulation
• ↔S&P 500 mixed — strong corporate profits support the index while AI and election fears weigh on it

instruments