Pomegra
Wall Street faces midterm elections, Apple and Palantir earnings and a 55K jobs forecast after Nasdaq's worst month since March 2025, with Democrats favored.
- Democrats are priced at about 92% to win the House and 65% to win the Senate ahead of Tuesday's midterm vote.
- Apple and Palantir report Monday after the close, following a Friday sell-off that cut the S&P 500 by 1.82%.
- October payrolls are forecast to rise by about 55,000, with unemployment steady at 4.2%, while Fed rate hike odds stay in play.
Lead
The stock market today enters the most crowded week of the fourth quarter. US midterm elections on Tuesday, November 3, Apple (AAPL) and Palantir Technologies (PLTR) earnings on Monday, and Friday's October employment report all land inside five sessions. Investors arrive after a bruising close to October. The S&P 500 fell 1.82% on Friday to 7,580.07, its steepest one-day decline since June 5. The Nasdaq Composite dropped 2.86% to 25,437.00, and the Dow Jones Industrial Average lost 1.09% to 51,770.31.
How Did October Leave the Market Heading Into This Week?
October left the market split between an index holding gains and a technology sector under pressure. The Dow industrials average gained 1.5% for the month, while the S&P 500 fell 1.2% and the Nasdaq slid 5.2%, its worst month since March 2025.
Doubts about whether heavy artificial intelligence spending will earn adequate returns drove the weakness. Alphabet (GOOG) fell 12% on Thursday after its results and slipped a further 1.7% on Friday. Amazon (AMZN) and Intel (INTC) also disappointed, with Intel suffering one of its worst sessions in decades.
The earnings season is strong in aggregate but thin on upside surprises. S&P 500 third-quarter profit growth is projected near 30%, yet companies are beating estimates by only 1.4%, against a historical average of 7.5% to 8%. Another 138 S&P 500 constituents report this week.
The 10-year Treasury yield closed Friday near 4.93%. That level raises the discount applied to long-duration growth stocks and sharpens the focus on every earnings guide.
What Does the Midterm Outcome Mean for Markets?
A Democratic sweep is the most likely outcome, and most investors expect little lasting market impact from the vote itself. Prediction markets price Democrats at about 92% to win the House and 65% to win the Senate, where Republicans hold a 53-47 majority and Democrats need a net gain of four seats. A sweep of both chambers is priced near 71%, with a Republican Senate and Democratic House the next most likely result at about 24%.
Divided government would reduce the odds of major new legislation, but it would also bring more congressional oversight. The sectors most exposed to a shift in power include:
- Defense: a possible unwind of recent spending increases.
- Pharmaceuticals: renewed pressure on drug pricing.
- Technology: closer scrutiny of data center build-outs and their energy demands.
Seasonality offers some support. November has averaged a 3.5% gain for the Nasdaq in midterm election years. Even so, macro forces such as interest rates, inflation and the AI spending debate are widely seen as bigger drivers than the vote.
Why Are Apple and Palantir Earnings in Focus?
Apple and Palantir matter because they test the two sides of the AI trade: consumer hardware resilience and enterprise software monetization. Both report Monday after the closing bell.
Apple's fiscal fourth-quarter report is the first under CEO John Ternus. Consensus calls for revenue of about $113.4 billion, up roughly 10.6%, and earnings of about $1.99 per share. The stock is up about 28% this year, making it the best performer among the Magnificent Seven. Attention will center on Apple Intelligence adoption, memory cost inflation, supply constraints, and whether a staggered iPhone launch weighs on gross margin.
Palantir is expected to post earnings of $0.41 per share on revenue near $2.18 billion. Last quarter revenue rose 93% and the shares jumped 29.5% after the company lifted its full-year revenue outlook by about $500 million. With the stock trading above 100 times forward earnings, another meaningful guidance increase is the threshold the market has set.
AMD (AMD) reports Tuesday, followed on Wednesday by McDonald's, Arm, Qualcomm and Uber. After a week in which chipmakers were among the weakest performers, AMD's data center commentary carries added weight.What Will the October Jobs Report Show?
The October report, due Friday, is forecast to show payrolls rising by about 55,000, with the unemployment rate holding at 4.2%. That would follow a September gain of just 29,000, and it sits well below the 10-year average monthly pace.
Hiring at that speed points to a labor market that is cooling without breaking. A figure far above forecast would reinforce the case for tighter policy. A negative print would raise concern about growth at a time when equity valuations are already under strain.
Midweek data will frame the release. September job openings and factory orders arrive Tuesday, the ADP private payrolls survey follows Wednesday, and weekly jobless claims land Thursday. The ISM manufacturing and services gauges for October are also due.
How Does the Fed Rate Outlook Shape the Week?
The Fed rate path is the main macro overlay, because markets are pricing further tightening rather than cuts. The federal reserve held its target range at 3.75% to 4% on October 28 in a 10-2 vote, with two dissenters favoring a hike, and the accompanying statement carried a hawkish tone. Futures pricing points to at least one more quarter-point increase before year-end, with the December 9 meeting the focal date.
That backdrop explains why a soft jobs report would not automatically lift stocks. Weak hiring paired with persistent inflation pressure would complicate the picture, while a firm report would extend the debate over how many more increases markets must absorb.
Key Levels to Watch
After Friday's decline, the S&P 500 sits about 3% above its 200-day moving average at 7,306. A break of that level would extend the technology correction. Nasdaq futures and the earnings reaction from Apple and Palantir on Tuesday morning will set the first tone for the week.
Outlook
The week combines three catalysts with different time horizons. The election resolves quickly and is expected to matter less for prices than for sector-level policy risk. Earnings from Apple and Palantir will decide whether the AI-led sell-off deepens or stabilizes. Friday's payroll figure and the repricing of Fed rate hike odds will determine the direction of Treasury yields and, with them, equity valuations into the December policy meeting.
