Week Ahead: Midterm Elections, Apple and Palantir Earnings, ISM Data and Friday's October Jobs Report Follow a Third Straight Weekly Drop for the S&P 500 and Nasdaq

Three Weeks Down, and a Crowded Week to Come

On Friday, Oct. 30, the S&P 500 fell 1.82% to 7,580. The Nasdaq fell 2.86% to 25,437. That ended a third straight weekly loss for both indexes^[2].

For the full week, the S&P 500 lost 0.58% and the Nasdaq lost 2%. It was the longest losing streak for both since March^[2][3]. Intel fell nearly 29% on Friday after its earnings report. That came a day after Alphabet's results disappointed investors^[4][18].

Now comes a week packed with events. On Tuesday, Nov. 3, Americans vote in the midterm elections, which decide who controls Congress^[4]. Apple and Palantir report earnings after Monday's close, and AMD reports Tuesday. McDonald's, Arm, Qualcomm and Uber follow on Wednesday^[1][17]. The Institute for Supply Management (ISM) publishes its factory survey Monday and its services survey Tuesday^[6]. On Friday, Nov. 6, the Bureau of Labor Statistics releases the October jobs report at 8:30 a.m. ET^[1].

Two Pictures of the Same Market

The week's numbers don't line up neatly. Corporate profits are strong. With more than half of S&P 500 companies reporting, third-quarter earnings were on pace to rise 31.6%, according to LSEG data^[4].

Yet stocks have fallen three weeks running. Look closer and the drop is uneven. The Dow fell 0.85% last week but rose 1.7% for October. The Nasdaq lost 5.3% for the month^[2].

That gap suggests money is moving out of tech and into other parts of the market. It isn't leaving stocks altogether. Energy and financial stocks also posted solid October gains^[4].

The Argument Over AI Spending

The selling traces back to one question. Is the huge spending on artificial intelligence going to pay off? Disappointing results and heavy spending plans at Alphabet, Amazon and Intel drove much of last week's drop^[4][18].

The skeptics' case turns on capital spending, or "capex." That is money a company spends on long-lasting things like data centers and chips. The cash leaves now. The profits it's meant to produce come later, if they come at all. So heavy capex shrinks free cash flow today, which is the cash left after a company pays its bills and investments^[4][18].

Skeptics, including some quoted by Reuters and CNBC, say Wall Street is pricing in profits nobody has yet proven. One strategist quoted by Reuters said the earnings bar is very high and a miss means trouble^[4]. Their incentive is plain: they want to protect investors' money from a repeat of past bubbles, and to buy at lower prices.

Optimists would answer differently. Heavy AI spending resembles the buildout of railroads or the internet. It was costly up front and paid off for years. On that view, the 31.6% profit growth shows corporate America is healthy, and a three-week dip is a pause. That is an inference from the data, not a quote from a named source.

Apple shows how high the stakes are. Analysts expect revenue up 10.7% to $113.4 billion and earnings of $1.99 a share. It's the first report under CEO John Ternus^[5]. CNBC's Jim Cramer noted that Apple trades at almost 40 times its earnings^[17]. That means investors pay about $40 for each $1 of yearly profit, so even a small miss can hit hard. Palantir is expected to earn $0.41 a share on about $2.18 billion in revenue^[20].

A Jobs Report That Arrives Too Late to Vote On

The jobs report lands three days after Election Day^[1][4]. Voters will cast ballots without seeing it. Markets, though, will react to the election and the data separately.

September's report was weak. The economy added 29,000 jobs, and unemployment rose to 4.2%^[10]. Forecasts for October run from about 45,000 to 65,000 jobs. A figure of 55,000 appears in several previews, and most forecasters expect unemployment to hold at 4.2%^[1][6][7][8]. Even the top of that range would be modest.

The Federal Reserve says its decisions depend on incoming data, so the jobs and ISM reports feed straight into its next move. The ISM surveys ask purchasing managers whether business is growing or shrinking. They come out before the government's figures, so markets treat them as an early signal^[6]. Cramer argued that a strong report with low wage growth could ease inflation worries^[17]. A weak one would strengthen the case that the economy is slowing.

Even the earnings count varies by source. CNBC counts 138 S&P 500 companies reporting this week. Another calendar lists 117^[1][19].

What Each Side Reads in the Numbers

Republicans can point to strong profits and the Dow's October gain as signs of a solid economy^[2][4]. They can also cite history. Morgan Stanley research finds the S&P 500 has gained about 23% on average in the year after a midterm that split control of Congress under a Republican president^[13][14]. CNBC notes the Nasdaq has historically gained about 3.5% in November of midterm years^[1]. Their incentive is to keep Congress and present the economy as strong going into Tuesday.

Democrats and economic critics say voters care about jobs and prices, not stock indexes. A widely shared, Trump-critical report points to 3% wage growth, described as the slowest in five years, and 3.6% inflation^[10][23]. When wages rise more slowly than prices, paychecks buy less each month. The same report cites an AP-NORC poll finding 61% of Americans say the economy is worse than when Trump took office in January 2025. It also says Trump has called the affordability issue a "hoax" made up by Democrats^[23].

Both cases rest on accurate figures. The election itself is also a market question. Polls and bank research favor Democrats to win the House, and Morgan Stanley treats the Senate as a toss-up^[13]. Reuters reports that investors are weighing whether a Democratic Congress would bring more scrutiny of data centers and AI, citing energy costs and the environment^[4]. Schwab adds that a Democratic House could bring more standoffs over government funding and the debt limit^[15]. Morgan Stanley and Schwab analysts also point to history showing that split government has often coincided with stock gains^[13][15].

How the Coverage Split

Business outlets framed the week as a test of the AI trade. CNBC's headline said investors "dump tech," a dramatic verb for a week in which the S&P 500 fell 0.58%. Its related piece said Wall Street "braces" for Democratic gains, which casts a Democratic win as something to prepare for^[1][16]. Reuters flagged data-center scrutiny under a Democratic Congress as a market risk. In the portion reviewed, it didn't lay out a matching risk under Republican control^[4].

Political and center-left outlets read the same data as a verdict on the party in power. Yahoo Finance called the weak September jobs report "yet another headwind for Trump and Republicans"^[11]. NPR said a mixed forecast "weighs heavy" ahead of the midterms^[12]. Al Jazeera, which is funded by the Qatari state, headlined September's report "US adds just 29,000 jobs as unemployment rises before midterm elections." The figures were accurate, but the headline tied them to the election^[10].

Right-leaning coverage of this story was thin. The one item found was a headline on the conservative aggregator Lucianne.com promising "spooky" Halloween news for Democrats. It treats the election as a partisan scoreboard, and only the headline was reviewed^[21]. India's state broadcaster ran a plain market-close report with no political framing^[22].

What's unresolved is which story wins the week. Apple, Palantir and AMD must show that AI spending can sit alongside growth. Tuesday's vote will settle control of Congress. Friday's jobs number will show whether hiring is still slowing, and each side will read it its own way.