Buckle up for another wild week in markets.
Investors are still coming off a roller coaster ride that included a painful sell-off in the AI trade on Friday, but the volatility isn’t expected to die down soon, and a handful of potential catalysts is lies ahead for investors.
This week’s docket includes more Big Tech earnings, economic data updates, and the midterm elections, which have historically been a hurdle for markets to clear.
And then there’s the fragile state of the AI trade, which was rattled last week as concerns about capex and overall AI demand rocked the market. The Nasdaq 100, which logged its worst month in over a year, is now on the edge of entering an official correction, with the tech-heavy index down 9% from its high in early October.
Here’s what investors are facing next:
1. Apple Earnings
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Apple, the largest company in the world by market cap after Nvidia’s plunge last Friday, is on deck to report results for the third quarter after the bell on Monday, a marquee event that’s expected to shape sentiment in the tech trade after last week’s sell-off. Here’s what Wall Street is expecting from the iPhone maker:
Investors will be paying special attention to the firm’s comments on AI. Apple isn’t a capex story the same way companies like Meta and Microsoft are. Its spending is expected to come in at around $11 billion to $14 billion this year, compared to the $100+ billion from AI hyperscalers, but the market remains eager to see what the iPhone maker’s AI ambitions will look like in the post-Tim Cook era. The coming earnings call will be the first to be led by new CEO John Ternus, setting the tone for the tech giant’s new chapter.
The market has been mercurial on Big Tech earnings lately, with investors ready to punish big AI firms at any whiff of bad news. Meta and Tesla were negatively impacted after reporting third-quarter results that hinted at slight changes in spending outlooks, triggering fears that slowing investment could spark a wave of knock-on effects for other suppliers in the industry.
Amazon and Alphabet, on the other hand, spooked investors by suggesting capex would grow next year despite negative cash flow, leading the market to punish those tech giants for what it saw as excessive spending.
Palantir, another notable player in the AI universe, will also report earnings after the bell.
“We continue to evaluate the monetization versus spending conundrum for hyperscalers,” Eric Freedman, the CIO at Northern Trust, wrote in a note on Monday. “While results were very company-specific, the common threads markets focus on are capital expenditure plans, financing needs, existing business cannibalization and evidence of returns.”
2. Oil moves
Oil is an enduring story in markets in 2026, one that’s sparked major bouts of volatility in both stocks and bonds. On Monday, Brent and West Texas Intermediate crude eacg dropped 6% as investors took in the possibility that the US and Iran could revive attempts at a diplomatic resolution to the war.
State Secretary Marco Rubio said President Donald Trump preferred to wrap up the conflict with Iran “peacefully,” adding that the president hasn’t yet decided to attack Iran.
However, more volatility could be looming.
Oil prices spiked in recent weeks on a New York Times report that the US and Israel are drawing up plans to strike Iran after the midterm elections. Energy markets could see more volatility this week if the market sees fresh signs evidence that peace talks are progressing or the administration signals that strikes will resume.
3. Midterm elections
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After months of anticipation, the midterm elections are finally here.
Wall Street is eyeing the passing of the midterm elections as a potential catalyst for markets. Stocks have historically struggled into the midterms, but have seen strong gains in the months following, with the S&P 500 gaining an average of 14% in the six months after the midterms since 1970, according to an analysis from BlackRock.
JPMorgan Private Bank said it was eyeing “outsized” gains in the S&P 500, pointing to improved market breadth, or the measure of winning stocks to losing stocks, in the overall index lately. The bank also recently lifted its year-end price target for the S&P 500 to 8,000, implying 4% upside from the index’s current levels.
The bank’s market intelligence team flagged near-term volatility depending on the results of the election and outlined the possible reaction in stocks depending on each election outcome.
“SPX has been up a year after every midterm election since 1950 with an average gain of around 15%,” the bank’s Craig Cohen wrote in a client note. “I suspect that at least part of the reason for this tendency is that the midterms tend to see the incumbent party loses seats and gridlock in Washington tends to be good for Wall Street.”
“Volatility could stay up awaiting results. Typically, stocks rally after midterms, but one exception was 2018—also a rate hike year,” Joe Mazzola, a head trading and derivatives strategist at Charles Schwab, wrote in a note.
4. Jobs report
Finally, investors will get a major macroeconomic update in the October jobs report on Friday. It’s a data point that could shape the Fed’s projected path for interest rate hikes through the rest of this year and early next year.
Central bankers left rates unchanged at their last policy meeting, as expected, pointing to the need to assess the trajectory of inflation before moving rates further. Markets, though, are expecting a rate hike at the Fed’s next policy meeting, with the probability of a 25 basis-point rate increase rising to 78% on Monday, according to CME FedWatch.
A strong jobs report, while good news for the economy, risks creating a reason for investors to sell stocks. The logic is that a stronger job market reflects the economy’s capacity to absorb higher interest rates, a possible drag for risk assets.
Economists are expecting the US to have added 55,000 payrolls last month, up from the 29,000 jobs added in September.
