Intel Breaks, the Fed Holds and Oil Keeps Climbing

The S&P 500 closed at 7,580.07, down 0.57% on the week and 3.05% below its October 6 record close. The Nasdaq Composite fell 2.00% to 25,437.00, the Dow lost 0.85% to 51,770.31, and the Russell 2000 gained 1.29% to 2,811.84. The S&P 500 and Nasdaq each logged a third straight weekly loss, and the S&P is up about 10.7% year to date. We could not verify the NYSE Composite close at press time and have left it blank rather than guess.

Intel Takes the Chip Complex Down with It

Friday was the week's rough session. Intel fell 28.58%, its worst day since 1974, after fourth-quarter revenue guidance of $15.0 billion to $16.0 billion came in about 9% below consensus and the company flagged weak PC demand into mid-2027. The Philadelphia Semiconductor Index dropped 7.2%, technology lost 4.89% as a sector, and the Nasdaq fell 2.86% on the day, its worst since June. Amazon slipped 1.41% after earnings of $1.89 missed the $1.96 estimate and trailing free cash flow turned to a $42.4 billion outflow tied to AI investment. Alphabet and Meta also posted negative free cash flow in the quarter. Energy (+1.91%) and consumer staples (+1.41%) led the few sectors that gained, and Okta was named to join the S&P 500 on November 4.

The Fed Holds, With Two Votes for a Hike

The FOMC held at 3.75-4.00% on Wednesday in a 10-2 vote, the first meeting under Chair Warsh. Governor Cook and Cleveland Fed President Hammack preferred a quarter-point hike, and the statement said more information would help the committee set its stance. Several regional presidents then argued publicly for further firming. Markets priced a December hike at roughly 72% to 80% by Friday, depending on the source. Reasonable observers differ on whether tighter policy is needed to cool inflation or risks overshooting a labor market that added only 29,000 jobs in September.

Growth Strong, Inflation Mixed

Q3 GDP grew 3.4% annualized (advance estimate) versus 2.2% in Q2 and about 3.1% expected. Quarterly PCE inflation cooled to 2.1% from 5.0%, with core at 2.5% from 3.3%. The monthly picture is warmer: September PCE rose 3.6% y/y (+0.5% m/m) and core PCE 3.1% y/y (+0.3% m/m), up from 3.4% headline in August. The Employment Cost Index rose 0.8% in the quarter, about 3.4% y/y, the slowest annual pace since 2021.

Oil, Gold, Crypto and the Dollar

A limpet-mine attack on a tanker in the Strait of Hormuz and fresh Houthi claims against Saudi targets lifted WTI to $104.12 and Brent to $117.64; WTI gained 15.2% in October. The 10-year yield ended near 4.94%, about 6 bps lower on the week, and the 2-year fell to a seven-week low near 4.56%. Gold fell 3.3% on Friday to $3,898.90, a one-year low, and silver dropped 5.86%. Bitcoin slid to about $76,760 after a reported $6.3 billion Binance hack that analysts linked to North Korea; Binance halted withdrawals and said it would cover losses. The dollar index closed at 101.92 and the VIX at 19.42, up nearly 13% Friday but flat on the week.

Midterms, Apple and a Jobs Report

The marquee events are the November 3 midterm elections and Friday's October jobs report, consensus about +55,000 jobs with unemployment at 4.2%, which could swing December hike odds. Palantir, AMD, Qualcomm and Apple headline earnings, and the Bank of England is widely expected to hike on Thursday.

Mon Nov 2 and Tue Nov 3: Manufacturing, Palantir and the Ballot Box

Monday brings ISM Manufacturing (consensus 54.7 versus 54.5), Treasury financing estimates and Palantir after the close. Tuesday has JOLTS and factory orders, AMD after the close, and voting for all 435 House seats and 35 Senate seats.

Wed Nov 4 to Fri Nov 6: Services, the BoE and Payrolls

Wednesday features ADP, ISM Services (consensus 54.7 versus 54.9), the trade balance and the Treasury refunding announcement. Thursday brings Challenger job cuts and the Bank of England. Friday delivers October payrolls (average hourly earnings expected +0.3%) and University of Michigan preliminary sentiment.

The constructive reading is that growth is running at 3.4%, wage growth is the slowest since 2021, small caps are rising and the S&P 500 sits only about 3% below its record. The cautious reading is that the 10-year is near 5%, Brent is above $117, September PCE re-accelerated to 3.6% and AI spending is now being judged on cash flow rather than promise. A Fed with two hawkish dissents, a midterm election and a payrolls print all land inside five trading days, so expect volatility to be the main event.