Wall Street Braces for Midterms, Apple Earnings and Jobs Data After AI Selloff Sinks Nasdaq

Wall Street heads into one of the busiest weeks of the fall with the AI trade on its back foot. Tuesday’s U.S. midterm elections, results from Apple, AMD and Palantir, and Friday’s October jobs report will all land within five trading days, right after a selloff in tech names dragged the Nasdaq to a losing week and its worst month since March 2025.

Investors got a small dose of calm on Sunday evening. CNBC reported that S&P 500 futures rose 0.3% and Nasdaq-100 futures gained 0.4%, while Dow futures added 116 points. Whether that bounce holds depends on a calendar packed with potential market movers.

How the AI Trade Got Here

The pressure built over the last week of October. According to Reuters, disappointing quarterly results from Alphabet and Amazon, two of the biggest spenders on data centers, rattled the market, and Intel shares tumbled nearly 29% on Friday after its report. The S&P 500 fell 1.8% that day and the Nasdaq Composite dropped 2.9%.

CNBC noted that Alphabet suffered a 12% drop on Thursday, its worst one-day decline on record, and that Amazon became the third hyperscaler, after Alphabet and Meta Platforms, to report negative free cash flow. The iShares Semiconductor ETF fell 9.1% on Friday alone. That has sharpened a question investors had been happy to ignore: how long can the largest tech companies keep borrowing and spending to build AI capacity before the returns show up?

Not everyone is alarmed. Warren Pies of 3Fourteen Research told CNBC he does not “see anything broken with the AI trade fundamentally,” while adding that “technicals are another story.” BTIG’s Jonathan Krinsky, by contrast, warned that the S&P 500 could soon test its 200-day moving average near 7,306, more than 5% below Thursday’s close.

Tuesday’s Midterms and the Data-Center Question

Election Day is the first big event. Reuters reported that Democrats are widely expected to win the House of Representatives, while control of the Senate is more in doubt. For markets, the sharpest angle is data centers, which face growing public opposition over their effect on energy costs and the environment. Investors are also watching state and local races in places like Texas for clues about the pace of the buildout.

Rick Meckler of Cherry Lane Investments told Reuters that a significant “blue wave” would likely be read as negative for AI names, for tech more broadly, and possibly for the market as a whole. Defense, healthcare, banks and crypto firms could also feel the effects of a shift in Washington, from fiscal spending to regulatory scrutiny. Others are less worried: Siebert Financial’s Mark Malek told CNBC there are “so many other macro themes that are so much more important right now.”

History leans constructive. CNBC cited the Stock Trader’s Almanac showing the Dow has gained 2.8% on average in the eight trading days around midterm election days since 1934, and that November has been the best month for the Nasdaq in midterm years, with an average rise of 3.5%.

Apple, AMD and Palantir Face a High Bar

Earnings remain the backbone of this year’s rally. Reuters, citing LSEG data, said third-quarter S&P 500 earnings were on pace to rise 31.6% with more than half of the index reported. But the bar is high: FactSet’s John Butters told CNBC that companies are beating estimates by just 1.4% on average, far below the five- and 10-year averages of 7.5% and 8%, largely because of Meta’s and Alphabet’s misses. Caterpillar’s 9% slide on Thursday showed how quickly the market punishes anything short of a raise.

Apple reports Monday after the close. Its shares are up about 27% to 28% this year, making it the best performer among the “Magnificent Seven,” and it is closing in on Nvidia’s market value. The stakes are rising, though: Bank of America analyst Wamsi Mohan removed Apple from the bank’s US1 list of top ideas on Friday, citing a “more conservative outlook” on gross margins tied to a staggered iPhone launch. AMD reports Tuesday, Qualcomm on Wednesday, and Palantir early in the week, giving investors three more reads on AI demand. In total, CNBC counts 138 S&P 500 companies reporting, including McDonald’s, Amgen, ConocoPhillips and Costco.

Friday’s Jobs Report Is the Missing Piece

The week ends with the October nonfarm payrolls report. Economists expect about 55,000 new jobs, with unemployment holding at 4.2%, according to FactSet and a Dow Jones poll cited by CNBC. That would be an improvement on September’s 29,000. The economy itself looks solid: Reuters noted third-quarter GDP grew at its fastest pace in a year, and the Federal Reserve upgraded its view of the economy while holding rates steady. “The missing piece of this strong economic growth narrative is the lack of job growth,” Manulife John Hancock’s Matthew Miskin told Reuters.

Energy is another wild card. Oil slipped more than 1% on Sunday night, with West Texas Intermediate near $102 and Brent near $112 a barrel, according to CNBC, after a more than 10% rise in October.

Why It Matters for Investors and Business Owners

The bigger story is rotation, not collapse. While tech struggled, the Dow rose almost 2% in October as money moved into healthcare, utilities, energy and financials, and the S&P 500 is still up more than 10% for the year. “The market is much more broad than people generally want to give it credit for,” Franklin Templeton’s Chris Galipeau told Reuters. For investors who concentrated heavily in AI winners, this week is a stress test of that bet and a reminder that diversification across sectors is doing real work right now.

For business owners, the signals matter beyond the stock ticker. A weak jobs print would reinforce worries about consumer demand heading into the holidays, while the election outcome could reshape energy costs, regulation and the capital flowing into AI infrastructure that many companies now depend on. Higher oil prices and sticky rates continue to raise the cost of operating and borrowing.

The Bottom Line

This week compresses three months of uncertainty into five days. If Apple and AMD deliver clean outlooks, the election avoids a sharp policy turn against data centers, and payrolls come in near expectations, the AI selloff could look like a healthy reset. Miss on two of the three, and the test of the 200-day average that strategists are flagging may arrive sooner than expected. Either way, a broadening market gives patient investors more places to hide than the headlines suggest.

Edited by Coron @QUE.COM
Website: https://QUE.COM Intelligence
Sponsored by: https://MAJ.COM AI Autonomous