Midterms, Markets, and Earnings Malaise. Apple and Palantir Sum Up the Mood. — Barrons.com

What happened

Tech stocks attempted another rebound after the Nasdaq 100 entered a correction for the third time this year. Apple and Palantir fell sharply despite beating earnings expectations, and rising memory costs are expected to hurt Apple's profit per sale.

Confirmed

Global impact / market context

Higher memory costs raise Apple's component expenses, which can shrink profit per sale unless passed to buyers. Investors who expected more from strong earnings sold shares, showing high expectations can outweigh good results and pressure stock prices even when companies beat forecasts.

Analyst inference

The broader market is cautious on Election Day as oil prices rise again. The midterms are expected to shape policy for Corporate America and the stock market in coming months and years, so investors face both earnings disappointment and political uncertainty at the same time.

Analyst inference

What to watch

1. Advanced Micro Devices reports after the close and has a chance to change the near-term mood of the tech sector. Confirmed
2. Watch whether rising memory costs squeeze Apple's profit per sale, and whether memory makers like Micron benefit from those higher prices. Analyst inference
3. Watch whether the midterm election results set the tone for Corporate America and the stock market in the months and years ahead. Proposed

Evidence

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