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

What happened

US midterm elections, a heavy slate of corporate earnings and the monthly jobs report will further test stock investors next week. The S&P 500 sank 1.8% on Friday and the Nasdaq Composite fell 2.9%, dragged down by tech and AI-related stocks.

Confirmed

Global impact / market context

Disappointing results from Alphabet and Amazon, which spend heavily on data centers, raised doubts about the financing and financial returns needed to support the AI investment theme. Apple, AMD and Palantir report next week, so further weak results could push investors to sell AI-linked shares.

Analyst inference

Investors are questioning whether the large capital spending, meaning money spent on long-term assets like data centers, behind the AI trade will produce enough profit. The midterm elections could also reshape the outlook for AI regulation, adding policy uncertainty for technology companies.

Analyst inference

What to watch

1. Tuesday's midterm elections will determine whether Democrats can take control of Congress from President Donald Trump, which could affect the outlook for AI regulation. Confirmed
2. Apple, AMD and Palantir are among the major tech and AI players due to report quarterly results next week, following this week's setbacks. Confirmed
3. Watch whether upcoming AI-related earnings revive or deepen concerns about financing and returns, since those worries drove Friday's 1.8% S&P 500 decline and 2.9% Nasdaq drop. Analyst inference

Evidence

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