The U.S. stock market experienced a stumble in late October, ending a five-month winning streak. Investor sentiment was dampened by election uncertainties and a mixed bag of tech earnings. A key indicator of market volatility, the CBOE Volatility Index (VIX), surged by 34% last month, marking the third-largest increase for an October in an election year.
While Alphabet Inc. (GOOGL) and Amazon.com Inc. (AMZN) delivered solid earnings, the rest of the “Magnificent Seven” tech giants fell short of expectations. This resulted in a nearly 2% drop for the Roundhill Magnificent Seven ETF (MAGS) for the week, marking its worst performance in two months.
Among the mega-cap companies, the top performers were Charter Communications Inc. (CHTR) and Booking Holdings Inc. (BKNG), both rising approximately 9%. Booking’s gains marked its strongest weekly performance since August 2022. On the other hand, Advanced Micro Devices Inc. (AMD) and Eli Lilly and Company (LLY) were the main laggards, dropping 9% and 8% respectively for the week.
Adding to the market’s unease, the U.S. economy saw a surprising slowdown in job growth in October. Nonfarm payrolls increased by a meager 12,000, marking a near four-year low and significantly lower than the expected 113,000. Factors like hurricanes and strikes likely contributed to the hiring slowdown. While unemployment held relatively steady, suggesting no major increase in layoffs, the labor market report has fueled expectations for Federal Reserve rate cuts. Markets are fully anticipating a 25-basis-point cut at Thursday’s meeting and assigning an 85% probability to a similar cut at the Fed’s final meeting of the year in December.
As the 2024 U.S. presidential election approaches, state-by-state betting odds reveal a tight race between Donald Trump and Kamala Harris. Key battleground states like Pennsylvania, Michigan, and Arizona are displaying narrow margins, highlighting their pivotal role in the final outcome.
Meanwhile, the SPDR Gold Trust (GLD) saw $1.8 billion in inflows during October, its highest in over two years. Rising investment demand continues to push gold towards record highs as investors seek safe-haven assets amid political upheaval and fiscal uncertainty.
In a move that reflects the changing dynamics of the electric vehicle market, Ford Motor Co. (F) announced it is pausing F-150 Lightning production from November 18 to January 6. This decision comes in response to Tesla Inc. (TSLA)’s Cybertruck sales surge and aims to recalibrate production with demand while enhancing profitability for the Michigan-based automaker.
