Patel on the Markets: 5 Things Moving Markets This Week (1 November 2026)

Global markets enter November with investors facing a demanding combination of weaker technology sentiment, uncertainty over interest rates, political change and fresh questions about the strength of the global economy. The AI-led rally that supported equity markets for much of the year is showing signs of strain, while central banks remain concerned about persistent inflation.

The past week brought a reminder that even the largest technology companies are not immune to changing investor expectations. Disappointing results and concerns about the cost of AI investment weighed on technology shares. The Federal Reserve held interest rates steady (opens in a new tab), but its cautious message did little to remove expectations of further tightening. This week, investors will turn to the US employment report, major technology earnings and the American midterm elections.

The key question is whether markets can find a new source of confidence, or whether higher financing costs, political uncertainty and demanding valuations will continue to weigh on risk appetite.

Want to talk through what this week means for your own portfolio or pension? Book a free call with Alpesh’s team (opens in a new tab). There is nothing to buy on the call.

1. The AI trade faces its toughest test: earnings must justify the spending

The biggest challenge facing equity markets is the growing scrutiny of the artificial intelligence investment boom. Recent results from Alphabet and Amazon have raised questions about the financial returns from the enormous sums being committed to data centres, cloud infrastructure and AI computing. Intel's shares also fell sharply following its latest results, adding to pressure across the technology sector. On Friday, the S&P 500 fell 1.8% and the Nasdaq dropped 2.9% (opens in a new tab), with technology and AI-related stocks leading the decline.

The concern is not that demand for AI has disappeared. Rather, investors are becoming more selective about which companies can turn that demand into sustainable revenue, profits and free cash flow. Building the infrastructure requires substantial capital expenditure, and the benefits may take longer to materialise than the market initially expected. If spending continues to rise faster than the revenue it generates, even companies with strong balance sheets could face pressure on valuations.

This week brings another important set of results. Apple, AMD, Palantir, Arm and Qualcomm are among the companies investors will be watching. Apple will provide insight into consumer technology demand and its evolving AI strategy, while AMD and Qualcomm will offer further evidence about semiconductor demand. Palantir's results will be closely examined for signs that enterprise AI adoption is translating into commercial growth.

The implications extend beyond technology stocks. AI-related companies have become significant constituents of major indices, meaning a sustained correction could affect passive funds, pension portfolios and diversified equity investments. Investors should also remember that the AI supply chain includes chipmakers, cloud providers, data-centre operators, utilities and infrastructure businesses, each with different economics and risks. I looked at how much of that spending is circular in The $1.4 Trillion Circle.

Takeaway: The AI opportunity remains significant, but investors should distinguish between companies benefiting from genuine demand and those whose valuations depend on future expectations. Focus on revenue growth, cash generation, capital expenditure and returns on invested capital. A compelling technology trend is not automatically a compelling investment at any price.

2. US jobs report: the next clue to the Federal Reserve's interest-rate path

The US labour market will be the central economic focus this week. Friday's October non-farm payrolls report arrives after September's employment figures showed an increase of just 29,000 jobs (opens in a new tab). Unemployment stood at 4.2%, suggesting that the labour market had weakened in some areas without showing a complete loss of resilience. Investors will want to know whether September was an isolated weak reading or evidence of a more sustained slowdown.

The employment report matters because it will influence expectations for the Federal Reserve's next move. At its October 28 meeting, the Fed kept its benchmark interest-rate range unchanged at 3.75%–4.00% (opens in a new tab), in a 10–2 vote (opens in a new tab). It upgraded its assessment of the economy but acknowledged that inflation remained elevated. Markets have increasingly considered the possibility of another rate increase in December, although the timing and scale of any further action will depend on incoming data.

There are two competing risks for investors. If employment remains strong and wage pressures persist, the Fed may have little reason to ease policy. That could keep borrowing costs elevated and put pressure on high-growth companies and other assets whose valuations depend on lower discount rates. If employment weakens considerably, concerns about consumer spending and corporate earnings could take over.

The payrolls figure will be considered alongside this week's JOLTS job openings data, ADP employment figures and ISM business surveys. Together, these indicators should help investors assess whether hiring demand, business activity and pricing pressures are moving in a direction that supports or complicates the Fed's policy outlook.

Takeaway: Watch the quality of the labour-market data, not just the headline number. A resilient jobs market may support economic growth but also keep interest rates higher for longer. A sharp deterioration could create a different problem by weakening consumer demand and company earnings.

3. Central banks diverge: Australia, Britain and Europe in focus

The Federal Reserve may have held rates steady, but the global monetary-policy picture remains far from settled. This week brings decisions from the Reserve Bank of Australia, Sweden's Riksbank, the Bank of England and Norges Bank, among others. These decisions will matter not only for domestic borrowing costs but also for currencies, government bond yields and international capital flows.

The Reserve Bank of Australia meets on Tuesday (opens in a new tab) amid renewed inflation concerns. Australian inflation has risen to 4.3% (opens in a new tab), putting pressure on policymakers to demonstrate that they remain committed to bringing price growth under control. The decision will be closely watched by currency and bond investors, particularly because higher rates could support the Australian dollar while increasing financing costs for households and businesses.

The Bank of England's decision on Thursday is another important event. The UK continues to face the challenge of above-target inflation and persistent wage pressures, making the balance between price stability and economic growth difficult. Investors will pay close attention to the Bank's assessment of domestic inflation, employment and the outlook for borrowing costs. Norges Bank and Sweden's Riksbank will also provide important signals about how European policymakers are responding to inflation and economic conditions.

For international investors, diverging monetary policies can create significant currency movements. A stronger currency can reduce the value of overseas investments when translated back into an investor's home currency, while a weaker currency can increase imported inflation. Bond markets will also respond to any change in expectations about the timing and direction of interest-rate moves.

Takeaway: Do not assume that all central banks are moving in the same direction. Pay attention to the language and inflation forecasts accompanying each decision. Currency exposure and interest-rate sensitivity deserve as much attention as the headline policy rate.

4. US midterm elections: political risk returns to the market

The US midterm elections on Tuesday, November 3, could reshape the political environment for the remainder of President Donald Trump's term. Investors will be watching whether Democrats gain control of the House of Representatives and whether the balance of power in the Senate changes. The result could influence the administration's ability to advance its legislative agenda and shape expectations for fiscal policy, regulation and government spending.

For markets, the implications go beyond the immediate political reaction. A change in congressional control could increase scrutiny of technology companies, particularly around AI regulation and the expansion of data centres. Financial institutions and cryptocurrency businesses could also face greater regulatory attention. Defence and healthcare companies may be sensitive to changes in spending priorities, while fiscal negotiations could affect expectations for government borrowing and the bond market.

Investors should also consider the potential impact on trade policy. Tariffs and trade restrictions have already influenced business decisions and supply chains. Any shift in the political balance could change the prospects for future legislation, negotiations and regulatory action. However, the election outcome alone will not determine the direction of markets; the extent to which policy actually changes will matter more.

Political uncertainty can create short-term volatility, particularly in sectors that are directly exposed to government decisions. But investors should avoid making large portfolio changes based solely on election forecasts or early results. Markets often price in expectations before an election and can react differently once uncertainty is removed.

Takeaway: Treat the election as a potential source of sector-specific volatility rather than a simple prediction about whether markets will rise or fall. Watch the implications for regulation, fiscal spending, trade and government borrowing, and distinguish campaign promises from policies that can realistically be implemented.

5. Global growth and energy costs: a difficult balance for investors

The global economic outlook remains complicated by the combination of uneven growth and elevated energy costs. Oil prices have remained under pressure from geopolitical developments in the Middle East, with Brent crude settling at $115.32 a barrel on October 28 (opens in a new tab) after renewed concerns about disruption to supply following an attack on a Saudi refinery. Higher energy prices create risks for inflation, business margins and consumer spending.

For businesses, the consequences depend on their ability to absorb or pass on higher costs. Airlines, transport companies, manufacturers and energy-intensive industries can face margin pressure if fuel and operating expenses rise faster than selling prices. Households may also have less disposable income available for other goods and services when energy bills increase. Energy producers can benefit from higher prices, but that does not mean the broader economy benefits from an oil shock.

This week's economic calendar offers several indicators of global activity. The US ISM manufacturing and services surveys will provide insight into business conditions, while euro-area inflation and economic data will help investors assess the strength of the European recovery. The Chinese National People's Congress Standing Committee is also meeting from November 2 to 6. Investors will be watching for any developments on fiscal policy and measures that could support domestic demand and growth.

Emerging markets deserve particular attention. Higher US interest-rate expectations and a stronger dollar can put pressure on currencies and increase the cost of servicing dollar-denominated debt. Brazil and Indonesia are among the markets facing their own political, currency and economic challenges. Indonesia's forthcoming growth figures will offer another indication of how the economy is coping with domestic pressures and a weaker currency.

Takeaway: Investors should assess the interaction between energy prices, inflation and economic growth. Higher oil prices can benefit selected energy businesses while creating headwinds for the wider economy. In emerging markets, currency stability, external financing needs and policy credibility remain important measures of risk.

Key takeaways: what to watch

On your radar

• Monday, November 2: Global manufacturing PMI updates, US ISM Manufacturing PMI and earnings from Apple and Palantir.
• Tuesday, November 3: Reserve Bank of Australia interest-rate decision, US JOLTS job openings data, AMD earnings and US midterm elections.
• Wednesday, November 4: Global services PMI updates, euro-area inflation data, US ADP employment figures and ISM Services PMI. Arm and Qualcomm report earnings.
• Thursday, November 5: Bank of England and Norges Bank policy decisions, alongside other central-bank announcements and economic releases.
• Friday, November 6: US October non-farm payrolls and unemployment rate, Canadian employment data and University of Michigan consumer sentiment.

These events could influence interest-rate expectations, currency movements and equity-market sentiment.

Market pulse this week

• Equities: The S&P 500 finished the week down approximately 0.6% (opens in a new tab), while the Nasdaq fell around 2.0%. Technology and AI-related stocks were under pressure following disappointing earnings and concerns about investment returns.
• Bonds: The Federal Reserve held rates at 3.75%–4.00%, but its acknowledgement that inflation remains elevated has kept expectations of further tightening in focus.
• FX: The US dollar strengthened over the week as the Fed's cautious message and higher oil prices supported expectations of tighter monetary policy.
• Commodities: Brent crude settled at $115.32 a barrel on October 28, with Middle East supply concerns continuing to support prices.
• Sentiment: Cautious. Investors are reassessing AI valuations, weighing the possibility of further rate increases and preparing for a busy week of political and economic developments.

If you want the bigger picture on sentiment, my weekly update on whether the market is lying to you looks at the gap between how investors feel and what the data shows, and the Corrections and Bear Markets research paper sets out how often falls like this turn into something deeper.

Final word

November begins with markets facing a test of confidence. The AI investment story remains powerful, but investors are demanding stronger evidence that the money being committed will generate sustainable returns. At the same time, the Federal Reserve's cautious stance and the possibility of further rate increases mean that the cost of capital remains an important consideration.

This week's US jobs report could influence the direction of interest-rate expectations, while central-bank decisions elsewhere will remind investors that monetary policy is not moving uniformly across the world. The US midterm elections add another layer of uncertainty, particularly for sectors exposed to regulation, trade and government spending.

The important lesson is that market leadership can change quickly. Investors should not confuse a strong long-term theme with a guaranteed share-price return, or assume that a company is attractively valued simply because it operates in a fast-growing industry. Focus on the underlying business, its ability to generate cash, the price being paid and the risks that could undermine the investment case.

In markets, opportunity and risk often arrive together. The discipline is to know what you own, why you own it and what would make you change your mind.

Would you like a second pair of eyes on your portfolio before a busy week? Book your free call with Alpesh’s team (opens in a new tab).

Sources

• Federal Reserve, FOMC statement, 28 October 2026 (opens in a new tab)
• Reuters, FOMC holds rates steady in a 10–2 decision (opens in a new tab)
• US Bureau of Labor Statistics, The Employment Situation, September 2026 (opens in a new tab)
• Reserve Bank of Australia, calendar of Monetary Policy Board meetings (opens in a new tab)
• Australian Bureau of Statistics, Consumer Price Index, Australia (opens in a new tab)
• Reuters, Oil prices rise on Yemen fighting, Saudi refinery attack (opens in a new tab)
• Investopedia, Markets news, 30 October 2026 (opens in a new tab)

Risk disclaimer: The information provided herein is for educational and informational purposes only and should not be considered financial advice or an offer to buy or sell any financial instrument. Investing involves risks, including the possible loss of principal. Past performance is no guarantee of future results. You should consult with a financial advisor before making any investment decisions.