Market Recap - Week of October 26 - 30, 2026

Nov 2

3 min read

The S&P 500 index edged 0.6% lower this week after quarterly results from hyperscalers disappointed investors, undermining the boost to risk sentiment from Anthropic's initial public offering announcement and a pause in monetary policy.

The market benchmark ended the week at 7,580.07. The index is now down 0.9% for the quarter but up 11% this year.

Anthropic filed with the US Securities and Exchange Commission on Monday for an initial public offering of Class A common stock on the Nasdaq Global Select Market under the ticker symbol "ANT." Note that there is only one share of voting stock, which will be owned by the 7 founders, so shareholders will never have any say in how the company is run or future dilution of shares.

The Federal Open Market Committee kept interest rates steady and said it needs more information before considering a policy change.

Alphabet's (GOOG, GOOGL) Q3 earnings unexpectedly declined as sales lagged because AI-led summaries in search undermined Google's revenue. Class A shares fell almost 13%, and class C shares declined 12%. AI is more expensive for them AND leads to fewer ad clicks.

Last Week's Economic Reports

GDP grew at a 3.4% annual rate last quarter
U.S. Personal Consumption Expenditures (PCE) Price Index rose 0.5% month‑over‑month (the highest since March 2026, when oil spiked at the start of the current war).

Up NEXT

ISM manufacturing and services purchasing managers' indexes
job openings and labor turnover survey
nonfarm payrolls
Michigan consumer sentiment and inflation expectations.

S&P 500 Stylebox and Sector Returns

Once again, I'll note that so far this year, value has outperformed growth across the board, and it's not even close for large or midsize companies.

How to read the stylebox: The horizontal axis represents investment style, which can be value, blend, or growth for stocks and mutual funds. The vertical axis represents stock market capitalization, categorized by company size as large, medium, and small. The number in each box represents the category's percentage growth at the intersection of the column and row. For example, large-cap value is in the top-left corner box of the 9 boxes, so the large-cap value category is up (or down) by the percentage shown in that box. The stylebox is NOT the S&P 500; it's the whole US stock market.

Thought of the Week

Last week’s 3Q26 GDP print and earnings reports from three major hyperscalers gave investors an updated temperature check on the AI trade. The U.S. economy grew at a 3.4% annualized pace, powered by 9.4% growth in business fixed investment, the strongest quarterly growth figures since 4Q20, and resilient consumer spending. The vast sums spent on materials, equipment, and data center construction are showing up across economic data, cementing this capex supercycle as the major driver of economic activity. This week’s chart shows nonresidential business fixed investment as a share of nominal GDP, highlighting how few parallels there are for the AI buildout’s contribution to economic growth. Its share of nominal GDP has already surpassed the telecom buildout of the 1990s and is exceeded only by the high-inflation period of the late 1970s and early 1980s, which may have reflected more a government and consumer spending slump than a capex boom.

For now, economic growth continues to center on the AI buildout. But while the AI buildout’s impact on economic growth is evident, the payoff for the hyperscalers making the investments is less clear. The three major hyperscalers that reported earnings last week each described strong AI demand and growth in their cloud businesses, but much of that growth may already be priced in. Investors are focused not only on whether these companies can beat earnings expectations, but also on how quickly they can monetize their investments and generate positive cash flow. Their ability to do so will shape how the market views them.

With both the economy and markets riding on the same AI theme, it’s increasingly important for investors to reduce concentration in their portfolios and diversify into less AI-exposed areas, such as Europe or real assets.

Source: JP Morgan (edited)

Thank you to all who attended this month's Market Update webinar!

You can watch the replay here:

Treasury Yields Hit 5.3% & Largest Buyback In History – Monthly Market Update Webinar – October 2026

The episode is also available wherever you listen to podcasts!