US midterm elections, a heavy slate of earnings and the monthly jobs report will test stock investors next week. The S&P 500 sank 1.8% on Friday as AI-related stocks fell. Investors are weighing AI financing concerns and the possible effect of the vote on AI regulation.
The S&P 500 sank 1.8% on Friday, while the Nasdaq Composite fell 2.9%, dragged down by tech and AI-related stocks. The slide followed a series of setbacks for the market-leading AI trade.
Intel shares tumbled nearly 29% after its report. Disappointing quarterly results from Alphabet and Amazon, two hyperscalers spending massively on data centers, also fed the turbulence.
Midterm vote could affect AI
Tuesday's elections will determine whether Democrats can wrest control of Congress away from President Donald Trump's Republican party. Democrats are widely predicted to win the House of Representatives, but the Senate is more in doubt.
Investors are bracing for increasing pushback on data centers, and a Democratic sweep is expected to bring more scrutiny. Rick Meckler, partner at Cherry Lane Investments, said a significant blue wave would be seen as negative for AI names, for tech to some extent, and maybe even for the market as a whole.
Earnings and jobs data on tap
Robust earnings performance has underpinned equity gains so far in 2026. With over half of the S&P 500 having reported, overall third-quarter earnings were on pace to rise 31.6%, according to LSEG IBES data.
Apple reports on Monday, and results are also expected from AMD, Qualcomm and Palantir. McDonald's, Amgen and ConocoPhillips are among over 100 S&P 500 companies due to report next week.
Next Friday's employment report for October will give a critical read into the health of the US economy. Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments, said the missing piece of the growth story is the lack of job growth.
Source: Reuters via Investing.com
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