The price action on the stock market last week was not well-defined in any manner of laying out what lies ahead for the major averages. It had the makings of a tempest — headwinds, tailwinds and heavy cross currents that whipped the leading names around like uprooted palm trees in windy conditions. The closing bell on Friday couldn’t come soon enough.
So, let’s start with the AI trade that the talking heads love to pound on with unrelenting comparisons to the dot-com era. From where I sit, the AI trade is far from over, with capex spending accelerating in 2026 on not just data center and electric grid buildout, but now comes the widespread enabling of AI in most off industries that is still in its early days.
Jensen Huang, CEO of Nvidia, recently stated that China is “nanoseconds behind” the United States in the AI race, underscoring how narrow the technological gap has become. At the FT Future of AI Summit in November 2025, Huang initially said “China is going to win the AI race,” sparking concern among U.S. policymakers and tech leaders.
He later clarified: “As I have long said, China is nanoseconds behind America in AI. It’s vital that America wins by racing ahead and winning developers worldwide.” Huang emphasized that China’s looser AI regulations and lower energy costs are accelerating its progress, while U.S. innovation is constrained by fragmented regulations and export restrictions.
There is a lot of AI-related debt being issued, about $1 trillion to date either issued or filed for issuance, that led to critics stating this is a debt bubble that will not be able to be satisfied upon maturity dates. OpenAI issued $4 billion in conventional debt in October 2024, backed by major banks including Wells Fargo, UBS, JPMorgan, Goldman Sachs and Citi.
This debt round is part of a five-year strategy to fund over $1 trillion in AI infrastructure, including massive compute deals with Nvidia, Oracle and Broadcom. OpenAI’s debt issuance is not the largest in tech, but it is notable for its scale relative to its revenue and its role in financing long-term AI infrastructure.
OpenAI is leveraging debt alongside equity to fund massive commitments like:
These deals are part of the Stargate Project, a $500 billion data center built out backed by SoftBank and Oracle. The AI race is for real and will define how global productivity is controlled and managed. U.S. export bans on Nvidia’s advanced chips (like the Blackwell series) have led to a collapse in Nvidia’s market share in China, from 95% to near zero.
China responded by banning foreign AI chips in government-funded data centers and ramping up domestic chip development. Huang warned that losing access to Chinese developers, who represent nearly half of the global AI talent pool, could undermine America’s long-term position. AI critics do not seem to understand the immense urgency to harness and widen U.S. leadership in AI — akin to the forces of good versus evil in many aspects as to how this plays out.
Wall Street will be laser-focused on Nvidia’s Data Center segment performance, Blackwell chip ramp guidance and margin sustainability in the upcoming Q3 2026 earnings report on Nov. 19. Consensus estimates project $33.1 billion in total revenue, with $29.0 billion expected from the Data Center segment, up nearly 50% year over year. EPS is expected to report $1.17 per share, a 50% increase from the same quarter last year. The company will likely exceed both estimates.
The main takeaway from all the headlines and dealmaking in the AI explosion is that the moat for the biggest AI companies is getting wider, and the digestion of the year-to-date gains realized in the share prices of these companies is a healthy development.
The pullback (-5.8%) for big tech last week took the Nasdaq 100 (QQQ) to its rising 50-day moving average on Friday, where buyers and bargain hunters stepped in mid-afternoon and bid the mega-techs higher into the close. If this week shows some evidence of follow-through buying pressure, last week will be looked on to as a classic short-term flush that refreshes.
Aside from the pullback in AI stocks, other mixed data from the economic calendar pushed and pulled stocks mostly lower. The worst Challenger report for October in 20 years crossed the tape where U.S. employers announced 153,000 layoffs. Year-to-date job cuts now total 1.1 million, up 65% from the same period in 2024. The government shutdown prevented the release of the October Employment Data last Friday, making labor market a guessing game at this time.
The market’s correction and weaker private jobs data struck a blow to consumer sentiment. The University of Michigan Consumer Sentiment Survey for November came in at 50.3, the second lowest reading since 1978, a 6.2% drop from October’s reading, and a staggering 30% decline year over year. Clearly, the advance of AI has stoked job security fears.
On the positive side of things, ISM Services for October came in strong, signaling a strong rebound in U.S. services activity after a flat September. New orders and business activity surged, reinforcing the resiliency of the service sector that is vital to GDP growth.
Running counter to the job loss uncertainty, travel company Expedia Group Inc. (EXPE) posted a blowout quarter and guided higher. Go figure. Middle income, upper income and corporate travel remain robust. Hotel stocks surged on the news. But the FAA slashing flights at 40 major airports to satisfy staffing shortages will hit the fourth-quarter numbers. The government shutdown is ending just as the holiday travel season begins.
Bitcoin and other cryptocurrencies fell hard with Nasdaq, supporting the base case that Bitcoin is not digital gold. It is a risk-on asset that should be treated as such, even though stablecoins like Tether and Circle are making huge inroads into government and corporate global transactions. Whale money is quietly accumulating Bitcoin at current levels near $100,000. Large holders have added 30,000 BITC in the past week, absorbing four times the weekly mining supply. There looks to be good support at $100,000-105,000.
The U.S. Dollar Index (DXY) hit up against overhead resistance at 100.25 and retreated, putting a fresh bid under physical gold and silver.
The benchmark 10-year Treasury also ran into overhead resistance on the strong ISM Services data noted and global PMI data for October 2025 that showed resilience, with both manufacturing and services sectors expanding modestly. The J.P. Morgan Global Composite PMI held at 52.4, signaling continued global growth despite regional divergences and trade headwinds.
FactSet Earnings Insight reports Nov. 7 that for Q3 2025 (with 91% of S&P 500 companies reporting actual results), 82% of S&P 500 companies have reported a positive earnings-per-share surprise, and 77% of S&P 500 companies have reported a positive revenue surprise.
Earnings Growth: For Q3 2025, the blended (year-over-year) earnings growth rate for the S&P 500 is 13.1%. If 13.1% is the actual growth rate for the quarter, it will mark the fourth consecutive quarter of double-digit-percentage earnings growth for the index.
Earnings Revisions: On Sept. 30, the estimated (year-over-year) earnings growth rate for the S&P 500 for Q3 2025 was 7.9%. 10 sectors are reporting higher earnings today (compared to Sept. 30) due to positive earnings-per-share surprises.
Kind of like Christmas coming early, given how strong the third-quarter reporting season has been. And when the dust settled into the weekend, most of the risk assets that investors were chasing via FOMO mentality during the month of October have sprung back and filled most of the technical gaps while providing attractive entry points to initiate and add to positions. It’s a beautiful setup for the S&P to trade to 7,000.
My Hi-Tech Trader advisory service utilizes AI to select technology stocks that have the most near-term potential to trade higher over the next 22 business days. These are directional trades that also have a corresponding call option to trade for option traders. Go to the link here and put the power of AI to work in your trading portfolio.
Jingle all the way.
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