TABLE OF CONTENTS

A. EXECUTIVE SUMMARY
B. MARKET DATA
C. HIGH-IMPACT STORIES (5)
D. MODERATE-IMPACT STORIES (7)
E. ECONOMY WATCH (5)
F. EARNINGS WATCH (9)
G. WHAT’S NEXT
H. CHART OF THE DAY

A. EXECUTIVE SUMMARY -> TOP

B. MARKET DATA -> TOP

A Democratic sweep of both chambers of Congress set off a broad relief rally, with the Dow up 3.03% and the S&P 500 up 1.58% as investors cheered the removal of midterm uncertainty. The rally split the AI trade: Microsoft, Amazon and Apple surged on bets that curbs on new data-center construction would entrench the incumbents, while AI power and hardware names sold off, led by GE Vernova (-9.30%) and Dell (-8.82%). Energy (-4.48%) was the weakest sector after crude fell more than 8% on bets that a Democratic Congress could hasten an end to the US-Israeli war with Iran. Treasuries rallied, the dollar slipped, gold rose 3.34% and the VIX fell 20.45%.

CLOSING PRICES – Wednesday, November 4, 2026:

MAJOR INDICES

The Dow’s 3.03% gain far outran the Nasdaq 100’s 0.91%, as losses in semiconductors and AI hardware held back the tech-heavy index while the advance ran broad elsewhere; the NYSE Composite (+1.56%) and Russell 2000 (+1.58%) matched the S&P 500. Dow Theory bull confirmation is in force, with both the Dow and the transports closing above their 10-session highs, though transports lagged the Dow by 1.91 points on the day. Over the past 10 sessions the Russell 2000 has beaten the S&P 500 by 3.6 points and the S&P 500 has beaten the Nasdaq 100 by 3.8, signalling broad participation and a broadening rotation away from concentrated tech leadership.

VOLATILITY & TREASURIES

Volatility collapsed as the election event risk cleared, and the bond market confirmed rather than fought the rally: the 10-year fell 7.3 bps and the 2-year 5.2 bps, flattening 2s10s to about 31 bps in a long-end-led rally. The dollar’s slide alongside lower yields fits the read that a divided Washington will borrow less, and Treasury’s refunding language also opened the door to future cuts in longer-dated auction sizes.

COMMODITIES

Precious metals jumped as the dollar slid, with silver (+5.17%) and platinum (+4.93%) outpacing gold, while copper barely moved, so the metals bid reads as currency-driven rather than a growth signal. Bitcoin rose 4.16% in step with equities, tracking risk appetite rather than a crypto-specific catalyst.

ENERGY

WTI and Brent fell more than 8% in lockstep, with the Brent-WTI spread narrowing by about $1, as Reuters tied the drop to bets that a Democratic Congress could hasten an end to the US-Israeli war with Iran. Dutch TTF fell alongside crude while Henry Hub rose, leaving US gas out of the move. Oil fell while equities rallied.

S&P 500 SECTORS

Nine of 11 sectors rose in a true breadth flush, and the two holdouts show where the day’s losses landed: Energy (-4.48%) on the oil slide, and Industrials (-1.54%), where defense names and AI-power suppliers fell. Technology (+0.06%) barely held green as chip and hardware losses offset mega-cap gains, leaving its 1-month loss at -11.57%, while Healthcare (+3.15%) added to the strongest 3-month run of any sector (+12.32%).

TOP MEGA-CAP MOVERS:

GAINERS

DECLINERS

C. HIGH-IMPACT STORIES -> TOP

1. Democrats Win Both Chambers of Congress, and the Dow Jumps 3.03% in Its Biggest One-Day Gain Since at Least April 15

The core facts:Democrats won majorities in both the House and the Senate in Tuesday’s midterm elections. NBC News projected Democratic control of the House in a report published at 10:08 PM ET Tuesday, after the market close, and projected that Democrats would also flip the Senate; it puts the party on course for about 255 House seats, a provisional count. In the first session after the result, the Dow rose 1,569.40 points, or 3.03%, to 53,356.12, the S&P 500 gained 1.58% to 7,688.62, the Russell 2000 rose 1.58% and the Nasdaq 100 added 0.91%. Nine of 11 S&P sectors rose, and the VIX fell 20.45% to 16.57. House Democratic leader Hakeem Jeffries’ priorities, as NBC listed them, are reversing the Medicaid cuts, extending the Affordable Care Act credits, restoring congressional authority over tariffs and stopping the war with Iran. President Trump told Fox News on election night, “I think it’s the gasoline price,” while Vice President Vance wrote on X that the war was the reason Republicans lost.

Why it matters:The rally was a release of event risk rather than a bet on new policy. The Dow’s gain and the VIX’s drop were each the largest one-day moves since at least April 15, and the Dow and the transports both closed above their highs of the prior 10 sessions. A divided Washington lowers the odds of further fiscal expansion, which the bond market read as less borrowing (Story 3), and it gives Congress leverage over the Iran war, tariffs and health spending that the market priced sector by sector: crude, defense and AI-power names fell while insurers, hospitals and Big Tech rose. The limits matter as much as the win. About 255 seats is well short of the 290 needed to override a veto, so any tariff rollback or Medicaid reversal still needs President Trump’s signature or Republican votes.

What to watch:Friday’s October payrolls report (consensus 65,000) and Tuesday’s October CPI, which return the market’s focus to the December 9 FOMC, where a rate hike is the base case; and whether the Dow can hold above 53,000.

2. Crude Plunges More Than 8% as Traders Bet a Democratic Congress Will Hasten an End to the Iran War; Brent Closes at Its Lowest Since August 31

The core facts:WTI closed at $88.04 a barrel, down 8.38%, and Brent closed at $94.62, down 8.67%, its lowest close since August 31. Reuters tied the drop to bets that the shift in power in Congress could hasten an end to the US-Israeli war with Iran, after both President Trump and Vice President Vance linked the Republican losses to the war and gasoline prices. Trump told the Financial Times that Washington had no immediate plans to strike Iran, per Oilprice.com. A report by the Qatari outlet Al-Jadeed of significant progress in US-Iran negotiations was dismissed by a senior Iranian official, and prices recovered some of their losses. The selling overrode a bullish inventory report: EIA data showed commercial crude stocks fell 0.865 million barrels to 409.76 million in the week to October 30, and distillate stocks fell 3.565 million barrels to 99.26 million. Energy was the worst S&P 500 sector, down 4.48%. The national average for regular gasoline was $4.12 a gallon on Wednesday, per AAA.

Why it matters:The war premium in crude is now trading on political odds rather than physical flows. Inventories are tightening, distillates are below 100 million barrels, and Iran’s Revolutionary Guard claimed overnight that four tankers struck mines south of Hormuz, a claim no one has independently confirmed. Yet the market took more than $8 off Brent in a day. That leaves oil exposed to a sharp reversal if talks stall: Enverus’ Carl Larry warned that “an escalation in Iran could come before a resolution.” For the Fed, an $8 drop in crude eases the energy component of inflation just as the ISM services survey shows prices paid at 73 and a December hike is the base case, so a sustained move lower would take some pressure off the hike case.

What to watch:Whether Brent holds above its August 31 close of $90.71; any confirmation from Washington or Tehran of progress in talks; and October CPI on Tuesday, November 10, for how much of the energy shock has already reached consumer prices.

3. Treasuries Rally and the Dollar Slides After the Sweep, With the 10-Year Down 7.3 bps; Gold Posts Its Best Day Since August 19

The core facts:The 10-year Treasury yield fell 7.3 basis points to 4.893% and the 2-year fell 5.2 bps to 4.581%, flattening the 2s10s curve to about 31 bps in a rally led by the long end. The dollar index fell 0.35% to 101.51. Gold rose 3.34% to $4,072.20 an ounce, its largest one-day gain since August 19, while silver rose 5.17% and platinum 4.93%; copper was nearly flat. Investing.com attributed the bond rally to bets that a divided Washington will borrow less. The rally came on the morning of Treasury’s quarterly refunding, which kept next week’s auctions at $125 billion and said Treasury anticipates maintaining coupon auction sizes “for the next several quarters.” That wording no longer says “at least,” which Reuters reported as the change in the guidance.

Why it matters:Bonds rallied with stocks, which marks the day as relief over fiscal risk rather than a growth scare. They rallied despite firm data: ADP’s private payrolls beat forecasts and the ISM services prices index held at 73, and a December hike remains priced at 78% on Polymarket. Dropping “at least” loosens Treasury’s commitment to hold coupon sizes without signalling which way they might move; the statement says only that Treasury “continues to evaluate potential future changes.” A weaker dollar lifted the precious metals, and copper’s flat session suggests the move was about the currency rather than growth.

What to watch:Next week’s 3-year ($58 billion, November 9), 10-year ($42 billion, November 10) and 30-year ($25 billion, November 12) auctions, which will test demand at lower yields, alongside October CPI on November 10.

4. The Sweep Splits the AI Trade: Microsoft, Amazon and Apple Surge While Vistra Sinks 13.83% on the Texas Governor’s Race

The core facts:Microsoft rose 6.68% to $555.80, Amazon 6.12% to $266.03 and Apple 5.31% to a record $349.51. Reuters reported that Big Tech surged on bets that potential curbs on new data-center construction would cement the incumbents’ grip on computing power and ease pressure on their cash flows; Amazon reached a three-month high. AI-power and hardware stocks fell. Vistra closed down 13.83% at $120.29 after Democrat Gina Hinojosa won the Texas governorship on a platform of tighter data-center restrictions, per Investing.com, and KeyBanc cut the stock to Sector Weight. GE Vernova fell 9.30%, Dell 8.82% and Micron 7.00%, though no company-specific catalyst was confirmed for any of the three. The Nasdaq 100 rose only 0.91%, and Technology barely held positive at +0.06%. MarketWatch reported that some analysts warned of an “excessive knee-jerk” reaction in Vistra and other energy stocks.

Why it matters:The market is repricing the AI build-out from a race to add capacity everywhere to a contest that favors those who already own it. If new data centers become harder to permit, existing capacity becomes scarcer and more valuable, and the hyperscalers’ capital spending may slow, which helps their free cash flow. The same logic hurts the suppliers whose growth depends on new construction: merchant power generators, turbine makers and server and memory vendors. Technology’s 1-month loss of 11.57% shows the sector was already under pressure; this election adds a policy risk to the AI supply chain where the market had priced none.

What to watch:Vistra’s third-quarter results on Friday, November 6, and Constellation Energy’s on Monday, November 9, for management commentary on data-center contracts in Texas and elsewhere; and the incoming Texas administration’s first statements on permitting.

5. Health Insurers and Hospital Operators Rally on Medicaid and ACA Hopes, With Centene Up 12.64% and HCA Up 10.34%

The core facts:Medicaid-focused insurers and hospital operators rallied after the Democratic win. Centene closed up 12.64% at $76.01 and HCA Healthcare up 10.34% at $510.70. Reuters reported early-trading gains in Molina, Tenet and Universal Health Services as well, on expectations that a Democratic Congress could delay the Medicaid-reducing provisions of the One Big Beautiful Bill Act and improve the prospects of extending enhanced Affordable Care Act subsidies. The Healthcare sector rose 3.15%, extending the strongest 3-month gain of any sector to 12.32%. CVS Health was the exception, falling 12.53% on the day it announced plans to split into two companies (Story 8).

Why it matters:The sweep removes much of the policy discount on the companies most exposed to Medicaid enrollment and subsidized ACA coverage, the two programs Jeffries named as priorities. Hospitals benefit twice, because fewer uninsured patients mean less uncompensated care. But the rally prices a change in probabilities, not a change in law: a Democratic Congress can pass a Medicaid delay or a subsidy extension only with the President’s signature, so the gains rest on a negotiation that has not begun.

What to watch:Any early bill from the incoming House leadership on ACA credits or the Medicaid timetable, and whether managed-care companies revise their 2027 enrollment assumptions at upcoming investor conferences.

D. MODERATE-IMPACT STORIES -> TOP

6. Defense Stocks Fall on Fears of a Tighter Pentagon Budget, With Lockheed Martin Down 6.88%

The core facts:Lockheed Martin closed down 6.88% at $595.04. Reuters reported that L3Harris fell 6.9% and RTX 3.1%, with General Dynamics and Northrop Grumman also lower, as investors bet that future defense funding may not be as robust as President Trump’s proposed $1.5 trillion 2027 budget implied. The selloff came on the same day Guggenheim initiated coverage of Lockheed at Buy with a $735 price target. Industrials fell 1.54%, one of only two S&P sectors lower on the day.

Why it matters:Congress controls appropriations, and a Democratic majority that has named stopping the Iran war as a priority is unlikely to approve defense spending at the scale the administration proposed. The move takes some of the war premium out of the sector at the same time crude lost its own (Story 2). Defense contracts are multi-year, so near-term revenue is largely set; the market is cutting the growth it had priced for 2027 and beyond.

What to watch:The fiscal 2027 appropriations calendar and any early statements from incoming Democratic committee chairs on defense and war funding.

7. 3M Jumps 9.55% After a $7.35 Billion Settlement of “Forever Chemicals” Personal-Injury Claims

The core facts:3M reached a broad resolution of personal-injury litigation over AFFF firefighting foam, a $7.35 billion pre-tax nominal commitment paid over nine years with a present value of $5.8 billion. It covers about 99% of current personal-injury claims inside and outside the AFFF multidistrict litigation, involving about 115,000 to 120,000 eligible plaintiffs, and includes a $680 million reserve fund. Payments are back-loaded: $50 million in 2026, nothing in 2027 and about 20% in the final two years. 3M will take a $5.8 billion pre-tax charge in the fourth quarter as a special item, and said the charge does not change its 2026 guidance. The agreement is not an admission of liability, and some payments depend on plaintiffs joining. The release was issued Tuesday evening, with an investor call at 8:30 AM ET Wednesday. Shares closed up 9.55% at $193.95, among the largest contributors to the Dow’s gain.

Why it matters:PFAS liability has been the largest unquantified risk in 3M’s valuation for years. Putting a number and a schedule on almost all current personal-injury claims turns that open-ended risk into a known cost. The payment schedule also matters: with almost nothing due before 2028, near-term free cash flow and the dividend are protected. CEO William Brown said the settlement “substantially reduces litigation uncertainty.”

What to watch:Plaintiff participation rates, since 3M may terminate the settlement if participation falls below a level it has not disclosed.

8. CVS Health Plans to Split Into Two Public Companies, Separating Aetna and Caremark From Its Retail Pharmacies; Shares Fall 12.53%

The core facts:CVS Health announced plans to separate into two independent public companies. A healthcare solutions company, under the interim name CVS Health, will hold Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health, led by current Chairman and CEO David Joyner. CVS Pharmacy will hold about 9,000 pharmacies, the mail pharmacy, MinuteClinic and the Health100 technology business, led by Group President Prem Shah. The separation is intended to be tax-free to shareholders and is expected to be completed in the first half of 2028, subject to final board approval, an effective Form 10 registration and confirmation of the tax treatment. The release gives no figures for separation costs, debt allocation or buybacks. CVS announced the plan alongside third-quarter results that beat estimates and raised guidance (Story 19). Shares closed down 12.53%.

Why it matters:The split unwinds the vertical model CVS built by buying Aetna, separating the insurance and benefits business from a retail pharmacy chain that has been shrinking its store count. Joyner said “we plan to create two focused companies.” The market’s reaction, a drop on a day insurers rallied and the company raised guidance, suggests investors doubt the split creates value on these terms. The timeline is long, the costs are unstated, and the deal needs a Form 10 that will show how debt is divided.

What to watch:The Form 10 filing and the naming of each company’s board and leadership, which will show the split of debt and the dividend for each.

9. A Democratic Senate Puts a Check on Fed Board Appointments, With Senator Warren Likely to Chair the Banking Committee

The core facts:Democratic control of the Senate gives the party “a major guardrail against Trump landing any more allies at the central bank,” Reuters reported, because the Senate confirms Fed Board nominees. The next Senate Banking Committee chair “will likely be Democratic Senator Elizabeth Warren of Massachusetts, a harsh Warsh critic,” replacing Tim Scott, and she could investigate Chair Kevin Warsh’s “opaque disposition of hundreds of millions of dollars in assets.” JPMorgan’s Michael Feroli said the result “increased the odds his term will end with Democratic control of the Senate.” The administration’s effort to remove Governor Lisa Cook continues, with a White House procedure expected in the coming weeks. Democratic committee control could also complicate the agenda of Vice Chair for Supervision Michelle Bowman, including stablecoin rules under the Genius Act and the consolidation of the Fed’s bank supervision. No Fed official commented.

Why it matters:The confirmation check lowers the risk that the Board’s composition shifts further toward the White House, which the market has treated as a threat to Fed independence. That supports the case for the Fed setting policy on the data alone, and the data currently point to a December hike. A Warren-led Banking Committee also raises the oversight risk for bank deregulation and for the crypto rulemaking that has helped the sector this year.

What to watch:Governor Bowman’s scheduled remarks on Friday, November 6, and the White House’s next step on Governor Cook.

10. Oracle Cancels a Roughly $7 Billion AI-Chip Lease With Tencent After US Government Pressure, the FT Reports

The core facts:Oracle has cancelled its roughly $7 billion agreement to lease AI chips to Tencent, the Financial Times reported, citing people familiar with the matter. Per the FT, US officials approached Oracle to raise concerns about the deal, and Guangdong officials asked Tencent to support domestic Chinese chips. The report first circulated shortly before 1:00 AM ET Wednesday. Oracle, Tencent and the White House did not respond to Reuters, which could not verify the report. Oracle shares closed down 1.95% at $123.73.

Why it matters:If confirmed, the cancellation shows US export policy reaching beyond chip sales to the rental of computing capacity, the route Chinese firms have used to get advanced AI hardware without buying it. It follows Tuesday’s report that Nvidia requires cloud partners to sell at least 51% of their services to non-Chinese customers, and together they point to tighter enforcement on overseas AI capacity. For Oracle, it removes a large contract from its backlog at a time when investors are already questioning the financing of AI data centers.

What to watch:Confirmation from Oracle or the administration, and whether the Commerce Department formalizes rules on remote access to US AI chips by Chinese companies.

11. AstraZeneca Made a Roughly $10 Billion Approach for Obesity Drugmaker Rhythm Pharmaceuticals, Sending Rhythm Up 28%

The core facts:AstraZeneca made an offer of about $10 billion for Rhythm Pharmaceuticals, Reuters reported Wednesday. The Wall Street Journal reported a $124-per-share offer made last month, while Reuters reported a non-binding proposal of as much as $134 a share including milestone payments. An AstraZeneca spokesperson declined to comment and Rhythm did not respond. Rhythm closed up 28% at $110.68. Rhythm sells Imcivree, whose use the FDA expanded in March to a rare form of obesity caused by brain damage.

Why it matters:Large drugmakers without a leading obesity franchise are paying up for differentiated assets, and rare genetic obesity is a niche that the GLP-1 leaders do not dominate. A deal at about $124 a share would sit well above Wednesday’s close, which suggests the market is pricing some doubt that a deal is reached at the reported terms. It also supports biotech M&A sentiment on a day healthcare led the market.

What to watch:Whether AstraZeneca makes a formal offer and how Rhythm’s board responds.

12. SpaceX Picks Qualcomm to Supply Base Stations for Starlink Mobile’s Nationwide US 5G Network, Lifting Qualcomm 5.33%

The core facts:SpaceX selected Qualcomm’s Dragonwing QRU100 and QDU100 platforms and Layer 1 software for the terrestrial base stations of Starlink Mobile’s US nationwide 5G network, Qualcomm announced Wednesday morning. The multi-year agreement covers tens of thousands of sites, with US deployment set to begin in 2027, using Massive MIMO radio units with 64 transmit and 64 receive paths. No dollar value was disclosed. Starlink Senior Vice President Michael Nicolls said Starlink is building “the first fully-integrated nationwide satellite and terrestrial network.” Qualcomm closed up 5.33% at $173.19 in the regular session, before its fiscal fourth-quarter report after the close (Story 20).

Why it matters:The deal gives Qualcomm a large, multi-year infrastructure customer outside handsets, the business where growth has been slowing. For the US wireless market, it confirms that SpaceX is building a terrestrial network to complement its satellites, which would make it a direct competitor to the incumbent carriers from 2027.

What to watch:The deployment schedule and spectrum plans SpaceX discloses for Starlink Mobile, and the carriers’ responses.

E. ECONOMY WATCH -> TOP

Wednesday’s data described an economy still running warm, with inflation pressure building in the pipeline rather than fading. Private hiring beat forecasts (ADP 86,000 against 69,000 expected), and the ISM services survey had all 10 of its indexes in expansion for the first time since February, with prices paid at 73 and order backlogs at their highest since July 2022. Growth is cooling only at the margin: GDPNow eased to 3.4% for the fourth quarter from 3.7%. That leaves a December rate hike as the market’s base case, priced at 78% on Polymarket, going into Friday’s payrolls report and Tuesday’s October CPI.

F. EARNINGS WATCH -> TOP

YESTERDAY AFTER THE BELL (Markets Reacted Today)

TODAY BEFORE THE BELL (Markets Already Reacted)

TODAY AFTER THE BELL (Markets React Tomorrow)

WEEK AHEAD PREVIEW:

G. WHAT’S NEXT -> TOP

UPCOMING RELEASES:

KEY QUESTIONS:

H. CHART OF THE DAY -> TOP

Market Intelligence Brief (MIB) Ver. 20.00
For professional investors only. Not investment advice.

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