After Hours Report

The week was defined by profit-taking in AI/growth, better breadth beneath the surface, and a defensive/value tilt. Mega-cap weakness weighed on the cap-weighted indices, while equal-weight and value held up far better (MGK -3.1% w/w; Russell 3000 Growth -2.9% vs. Russell 3000 Value -0.1%). Semis were volatile; energy and defensives finished strong. The S&P 500, despite the struggles of the growth stocks, managed yet again to hold key support at its 50-DMA.

Macro & policy
• Manufacturing stayed in contraction: ISM Manufacturing 48.7 (8th straight <50) even as S&P Global Mfg PMI ticked up to 52.5.
• Services re-accelerated: ISM Services 52.4 with the prices-paid index at a 3-yr high—an incremental hurdle for a December rate cut.
• Labor mixed: ADP +42k after a negative prior revision; Challenger job cuts for October were the highest for any October since 2003.
• Consumers wobbled: prelim Univ. of Michigan sentiment slid to 50.3; non-revolving credit drove a $13.1B September credit gain.
• Rates were range-bound: 2-yr ~3.57–3.63%, 10-yr ~4.09–4.16%, with safe-haven bids on weak data and growth jitters.
• Trade/politics: the U.S.–China tariff framework eased the average rate by 10% with a 100% hike postponed a year; shutdown headlines ping-ponged but didn’t derail the late-week rally.

Sector & factor moves
• Leadership rotation: energy, utilities, materials, staples, and real estate outperformed late week as investors sought defensives and yield.
• Growth under pressure: info tech and consumer discretionary lagged; breadth improved mid-week but leadership remained thin among mega-caps.
• Equal-weight beat cap-weight again as narrow leadership continued to unwind.

Story stocks
• Amazon (AMZN): rallied on a $38B, 7-year AWS compute deal with OpenAI, reinforcing cloud/AI demand optionality and sustaining post-earnings momentum.
• NVIDIA (NVDA): early strength faded; week -7.1% amid AI rotation and reports of rival chip availability; semis swung with HBM pricing chatter and export headlines.
• Palantir (PLTR): sold off post-beat/raise on valuation concerns (still >200x forward P/E), catalyzing profit-taking across AI/growth.
• AMD (AMD): beat-and-raise helped stabilize semi sentiment; group still choppy.
• Micron (MU)/Seagate (STX): bid on reports of SK Hynix aiming for 50% HBM price hikes, spotlighting tight high-bandwidth memory supply.
• Tesla (TSLA): volatile; weakness weighed on discretionary; later rebound couldn’t restore weekly leadership as shareholders approved a supersized CEO pay package.
• Alphabet (GOOG/GOOGL): bucked tech softness on reports its Ironwood AI chip will be widely available soon.
• Kimberly-Clark (KMB)/Kenvue (KVUE): $48.7B cash-and-stock deal drove a sharp KMB slide on price/leverage; KVUE jumped on a cleaner exit path.
• Health-weight loss: headlines pointed to “most-favored nation” pricing commitments from LLY/NVO, aiding sector defensiveness.
• e.l.f. (ELF), Duolingo (DUOL), DoorDash (DASH), Paycom (PAYC): examples of how outsized post-print drawdowns amplified valuation discipline outside megacaps.

Bottom line
This was a positioning-and-valuation week: AI/growth leadership was tested, defensives rotated in, and indices held crucial support with better (if still fragile) breadth.

• S&P Midcap 400: -0.1% for the week / +3.9% YTD
• DJIA: -1.2% for the week / +10.4% YTD
• S&P 500: -1.6% for the week / +14.4% YTD
• Russell 2000: -1.9% for the week / +9.1% YTD
• Nasdaq: -3.0% for the week / +19.1% YTD

Monday:

The S&P 500 (+0.2%), Nasdaq Composite (+0.5%), and DJIA (-0.5%) started November on a mixed note as mega-cap tech provided relatively thin leadership against softness in the broader market.

Amazon (AMZN 254.00, +9.78, +4.00%) provided the early buzz for the mega-caps before the open after announcing a $38 billion AWS compute deal with OpenAI. The stock was coming off of a winning session on Friday that saw the stock rise nearly 10% after its earnings report, with a 20% acceleration in AWS sales a highlight of the stellar report.

Under this new $38 billion agreement, which will have continued growth over the next seven years, OpenAI is accessing AWS compute comprising hundreds of thousands of state-of-the-art NVIDIA (NVDA 206.88, +4.39, +2.17%) GPUs, with the ability to expand to tens of millions of CPUs to rapidly scale agentic workloads.

NVIDIA also pushed higher, aided by a report that the U.S. will allow Microsoft (MSFT 517.03, -0.78, -0.15%) to ship its chips to the UAE.

Amazon's and NVIDIA's gains sent the consumer discretionary (+1.7%) and information technology (+0.4%) sectors higher, spending the bulk of the session as the only two S&P 500 sectors in positive territory.

A solid gain from Tesla (TSLA 468.37, +11.81, +2.59%) supported the consumer discretionary sector's leadership and contributed to the outperformance of the mega-caps in today's trade. The Vanguard Mega Cap Growth ETF finished 0.6% higher, and the market-weighted S&P 500 (+0.2%) outperformed the S&P 500 Equal Weighted Index (-0.3%).

The utilities (+0.1%) and health care (+0.1) sectors also scratched out gains, popping above their baselines late in the session. Within the health care sector, IDEXX Labs (IDXX 722.94, +93.43, +14.84%) was the best-performing S&P 500 name after a beat-and-raise earnings report.

Meanwhile, the seven other S&P 500 sectors traded lower, though most of the laggards saw considerable improvement from session lows. While several sectors held losses wider than 1.0%, the materials sector (-0.6%) was the only sector to close with a loss wider than 0.5%.

The consumer staples sector (-0.5%) was also near the bottom of the standings both today and for the quarter.

Kimberly-Clark (KMB 102.27, -17.44, -14.57%) announced a cash and stock deal to acquire Kenvue (KVUE 16.16, +1.79, +12.46%) valued at $48.7 billion. The transaction offered Kenvue a welcome exit from its challenging standalone stretch and spared activists from deeper losses.

For Kimberly-Clark, the acquisition brought scale, diversification, and exposure to higher-margin consumer health categories, though the hefty price tag and added leverage helped explain the steep selloff in the stock.

While a handful of corporate headlines drove considerable price action today, macro developments were relatively quiet.

Fed Governor Lisa Cook (voting FOMC member) echoed uncertainty around the Fed's next move, saying policy "is not on a predetermined path," while San Francisco Fed President Mary Daly (nonvoting FOMC member) said that the Fed should be open-minded about cutting rates in December. Expectations for a 25-basis-point rate cut at the December FOMC meeting held steady at 65.3%, according to the CME FedWatch tool.

On the trade front, the White House published the details of the trade agreement between the U.S. and China, which did not deliver any surprises. The overall tariff rate on Chinese imports was lowered 10%, and the 100% additional tariff increase will be postponed for a year.

Overall today's action highlighted the dominance of the mega-cap names over the broader market, with Amazon furthering its push into record territory. Investors will now turn to Palantir Technologies' (PLTR 207.18, +6.71, +3.35%) earnings report after the close for additional fuel for the AI trade.

U.S. Treasuries started November on a flat note, spending the day in a sideways range near their opening levels. The 2-year note yield settled down one basis point to 3.60% and the 10-year note yield settled up one basis point to 4.11%.

Reviewing today's economic data:

• The October ISM Manufacturing Index checked in at 48.7% for October (Briefing.com consensus: 49.4%), down from 49.1% in September. The dividing line between expansion and contraction is 50.0%, so the October figure, which is the eighth straight month below 50.0%, suggests manufacturing activity contracted at a faster pace than the prior month.
  • The key takeaway from the report is that the manufacturing sector saw its eighth consecutive month of contraction, with uncertainty about tariffs and the global economy tempering demand.
• The S&P Global U.S. Manufacturing PMI hit 52.5 in the final reading for October, up from 52.2 in the preliminary reading and 52.0 in September.

Tuesday:

The stock market faced a relatively broad retreat today with losses paced by mega-cap and tech names, sending the S&P 500 (-1.2%), Nasdaq Composite (-2.0%), and DJIA (-0.5%) firmly lower.

The market's reaction to Palantir Technologies' (PLTR 190.73, -16.45, -7.94%) earnings report provided the spark for the broader pullback in the AI trade. The report itself was not indicative of a retreat, as the company crushed earnings expectations and raised its guidance. Instead, the sell-off seemed tied to valuation concerns and some profit-taking after an impressive run this year. Even after today's pullback, the stock still trades at a forward price-to-earnings ratio of over 200x.

Palantir's move set the stage for some profit-taking across other AI-related and growth names, many of which are also components of the information technology sector (-2.3%).

Chipmakers faced considerable pressure throughout the session, pushing the PHLX Semiconductor Index 4.0% lower. NVIDIA (NVDA 198.69, -8.19, -3.96%) was one of six "magnificent seven" names to trade lower, and Advanced Micro Devices (AMD 250.05, -9.60, -3.70%) retreated ahead of its earnings report after the close.

Apple (AAPL 270.04, +0.99, +0.37%) was the only Magnificent Seven name to close with a gain, supported by a Bloomberg report that the company is developing a cheaper MacBook to compete with the Chromebook and other more affordable laptops.

The consumer discretionary sector (-1.9%) faced the next widest loss, pressured by Tesla's (TSLA 444.26, -24.11, -5.15%) weakness. Elsewhere in the sector, Norwegian Cruise Line (NCLH 18.79, -3.39, -15.28%) finished as the worst-performing name in the S&P 500 after beating EPS expectations but missing on revenues and issuing disappointing guidance, bringing other cruise line names lower in sympathy.

The communication services sector (-1.5%) saw both of its mega-cap components finish lower. The Vanguard Mega Cap Growth ETF closed with a 1.8% loss.

Elsewhere, the industrials sector (-1.2%) faced some sell-the-news pressure from Uber's (UBER 94.67, -5.05, -5.06%) earnings report, while the energy sector (-0.9%) saw weakness in Marathon Petroleum (MPC 184.50, -11.28, -5.76%) after an earnings miss.

The materials (-0.4%) and utilities (-0.4%) sectors closed with more modest losses.

Meanwhile, four S&P 500 sectors closed with modest gains, benefitting from a combination of earnings-related moves and a general rotation into more defensive sectors.

The financials sector (+0.6%) finished at the top of the standings, supported by a solid move in Apollo Global Management (APO 130.52, +6.57, +5.30%) after an earnings beat.

The consumer staples (+0.5%) and health care (+0.3%) sectors posted similar gains, while the real estate sector (-0.3%) advanced more modestly.

Outside of the S&P 500, the small-cap Russell 2000 (-1.8%) and S&P Mid Cap 400 (-0.9%) also retreated today.

Decliners outpaced advancers by a roughly 2-to-1 ratio on the NYSE and a 3-to-1 clip on the Nasdaq, highlighting the scope of today's weakness. However, negative breadth has plagued the market for the past several sessions, though the outsized influence of the mega-caps over the major averages largely prevented index-level losses before today's session. The trend of mega-cap dominance came to a halt today, with the S&P 500 Equal Weighted Index (-0.7%) outperforming the market-weighted S&P 500 (-1.2%).

The market did not mount a buy-the-dip effort this afternoon, as the absence of meaningful macro catalysts left investors focused squarely on stretched valuations, allowing profit-taking to take hold and broadening the pullback beyond the recent AI leadership.

U.S. Treasuries recorded modest gains on Tuesday after spending the session in a narrow range near their starting levels. The 2-year note yield settled down two basis points to 3.58%, and the 10-year note yield settled down two basis points to 4.09%.

Wednesday:

The stock market staged a solid rebound today, with early strength in mega-cap and technology names broadening into a wider advance. The S&P 500 (+0.4%), Nasdaq Composite (+0.7%), and DJIA (+0.5%) all finished firmly higher, even as the information technology sector (-0.1%) slipped into the red late in the session.

Several of the market's largest names captured gains that mirrored yesterday's losses, though mixed strength ultimately saw the Vanguard Mega Cap Growth ETF (+0.1%) finish with just a modest gain. The communication services (+1.7%) and consumer discretionary (+1.0%) sectors finished at the top of the standings by way of their largest components, as mega-cap weakness was largely concentrated in the information technology sector.

Meta Platforms (META 635.95, +8.63, +1.38%) traded higher for the first day since its earnings report last Wednesday, while Alphabet (GOOG 284.75, +6.69, +2.41%) reapproached last week's record high levels.

Tesla (TSLA 462.23, +17.97, +4.05%) was a standout among the mega-caps, reclaiming the bulk of yesterday's 5.2% slide despite reports of weak sales in Germany.

Elsewhere in the consumer discretionary sector, McDonald's (MCD 305.67, +6.46, +2.16%) traded higher despite a Q3 earnings miss and in-line revenue, with investors focusing on stronger-than-expected same-store sales momentum in both global and U.S. markets.

The information technology sector (-0.1%) held one of the widest gains for much of the session but eventually faced some pressure late in the afternoon. Apple (AAPL 270.14, +0.10, +0.04%) and Microsoft (MSFT 507.16, -7.17, -1.39%) spent most of the day in a lackluster fashion, while NVIDIA (NVDA 195.19, -3.50, -1.76%) reversed an earlier gain of nearly 2.0%.

Despite the late slide in NVIDIA, chipmaker names still largely outperformed today, sending the PHLX Semiconductor Index 3.0% higher.

Advanced Micro Devices (AMD 256.33, +6.28, +2.51%) traded higher after a beat-and-raise earnings report, reversing a pre-market loss that had investors worried it might follow a similar trajectory to Palantir Technologies (PLTR 187.90, -2.84, -1.49%), which moved sharply lower yesterday on valuation concerns despite a blowout earnings report.

Micron (MU 237.50, +19.47, +8.93%) was a notable standout on reports that SK Hynix is aiming to increase HBM4 supply prices by 50%. That headline contributed to a solid gain in Seagate Tech (STX 275.77, +25.39, +10.14%) as well.

The consumer staples (-0.3%) and real estate (-0.1%) sectors also closed with modest losses, while the utilities sector finished flat.

Seven other S&P 500 sectors captured gains as the market benefitted from relatively wide participation that saw advancers outpace decliners by a roughly 2-to-1 ratio on the NYSE and Nasdaq. The positive breadth figures were a welcome sight to a market that has seen thin leadership from its largest names drive the most recent push to record highs. Ultimately, the S&P 500 Equal Weighted Index (+0.6%) outperformed the market-weighted S&P 500 (+0.4%).

The Russell 2000 (+1.5%) and S&P Mid Cap 400 (+0.7%) also outperformed as the market exhibited a less defensive posture today.

While some late pressure in tech saw the major averages close with roughly half of their early gains, the broader tone remained supportive as stronger breadth pointed to a less volatile demeanor.

Meanwhile, U.S. Treasuries retreated, lifting yields to their highest levels since early October after a quiet first two sessions of the week. The midweek affair started in flat fashion, but selling interest began building after the open as the market received generally upbeat economic data that included renewed growth in the ADP Employment Change report (42,000; prior -29,000) and expansionary readings of the S&P Global U.S. Services PMI (54.6) and the ISM Services Index (52.4%) for October.

The 2-year note yield settled up five basis points to 3.63%, and the 10-year note yield settled up seven basis points to 4.16%.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -1.9%; Prior 7.1%
• October ADP Employment Change 42K (Briefing.com consensus 26K); Prior was revised to -29K from -32K
• October S&P Global U.S. Services PMI - Final 54.8; Prior 54.2
• October ISM Services 52.4% (Briefing.com consensus 50.9%); Prior 50.0%
  • The key takeaway from the report is that it is not a data point that falls in favor of a rate cut in December. Business activity for the nation's largest sector accelerated in October, while the prices index (which measures prices paid for materials and services by services organizations) hit its highest level in three years.

Thursday:

It was a struggle for the stock market today, largely because it was a struggle for growth stocks as a whole and many of the mega-cap stocks. Both groups were hit with some profit-taking interest and were saddled with residual concerns over stretched valuations and excess speculation.

In a certain respect, it was a rehash of Tuesday's selling in the wake of Palantir Technologies' (PLTR 175.07, -12.83, -6.83%) earnings report, only the losses overall weren't as significant. There was the same concentration factor, however.

The Vanguard Mega-Cap Growth ETF (MGK) and the Russell 3000 Growth Index were both down as much as 1.9% at their worst levels of the day before they pared their losses. They finished today's session down 1.7% and 1.6%, respectively.

Outsized losses in e.l.f. Beauty (ELF 76.62, -41.21, -34.97%), Duolingo (DUOL 193.74, -66.28, -25.49%), DoorDash (DASH 196.46, -41.54, -17.45%), and Paycom Software (PAYC 164.05, -19.66, -10.70%) after they disappointed with their results and/or guidance took a toll on investor sentiment, as did a Q3 warning from CarMax (KMX 30.88, -9.93, -24.33%), which also said its CEO will be stepping down.

Then, there was the overhang of losses in Tesla (TSLA 445.91, -16.16, -3.50%), NVIDIA (NVDA 188.08, -7.13, -3.65%), Meta Platforms (META 618.94, -17.01, -2.67%), Amazon (AMZN 243.04, -7.16, -2.86%), and Microsoft (MSFT 497.10, -10.06, -1.98%). Alphabet (GOOG 285.34, +0.59, +0.21%; GOOGL 284.75, +0.44, +0.15%) bucked that trend on a report that it will make its powerful AI chip, Ironwood, widely available in the coming weeks. That report presumably weighed some on NVIDIA.

Weakness in these mega-cap leaders made it all but impossible for the market cap-weighted indices to stake a claim on positive ground. In fact, the majority of stocks struggled today. Decliners led advancers by a 9-to-5 margin at the NYSE and by a better than 2-to-1 margin at the Nasdaq.

There were only two sectors that ended the day higher—energy (+0.9%) and health care (+0.2%). The latter saw some added news flow, with President Trump announcing in an Oval Office briefing that Eli Lilly (LLY 937.76, +11.95, +1.29%) and Novo Nordisk A/S (NVO 46.50, -1.96, -4.04%) will provide most-favored nation drug pricing for their weight-loss drugs.

The consumer discretionary (-2.5%) and information technology (-2.2%) sectors were today's worst-performing areas. Interestingly, they were the only two sectors that underperformed the S&P 500 (-1.1%). The other losing sectors were down between 0.3% and 0.7%.

There weren't any official government reports today due to the shutdown. Challenger, Gray & Christmas reported, however, that job cuts in October (153,074) were the highest they have been in any October since 2003.

That report also acted as a deterrent for buyers in today's session, although it was a factor in the gains seen in the Treasury market. The 2-yr note yield settled the session down six basis points at 3.57%, while the 10-yr note yield settled the session down six basis points at 4.09%.

Friday:

You might not think it looking at the final standing of the major indices, but today was quite a win for the bulls, technically speaking. The S&P 500 fell below its 50-day moving average (6,669.00) but once again found support and managed to close above that key technical level, just as it has time and again since this remarkable rally began in April.

It was looking dicey during the morning session, with session lows reached just after 12:00 p.m. ET. At that point, the Dow, Nasdaq, and S&P 500 were down 0.9%, 2.1%, and 1.3%, respectively, undercut yet again by losses in the mega-cap stocks and the growth stocks and some concerns about an economic slowdown.

The latter was pinned on one of the lowest readings ever for the University of Michigan Consumer Sentiment Index and copious reports about hundreds of flight cancellations due to the government shutdown.

The buy-the-dip crowd started to re-emerge early in the afternoon session, however, and retook control of the tape, helping many stocks pare larger losses and other stocks extend their gains.

Nine of the 11 S&P 500 sectors ended the day higher, led by the energy (+1.6%), utilities (+1.4%), materials (+1.3%), real estate (+1.3%), and consumer staples (+1.3%) sectors. The communication services (-0.8%) and information technology (-0.3%) sectors were the two losers, but both finished well off their lows.

The S&P 500 eventually reclaimed a posture above the 6,669.00 level and got an added boost on reports that the Democrats will vote to reopen the government if Republicans agree to a one-year extension of the Obamacare subsidies.

The positive buzz around that possibility didn't last long. CNBC soon reported that the Democrats' offer is likely to be rejected by the Republicans, who want the government reopened first before talks on extending the Obamacare subsidies are held.

Strikingly, this report didn't unnerve the market, which not only finished higher after the report but, in fact, finished at its highs for the day. We're not sure if that means participants are thinking there could be some kind of deal struck over the weekend or if the positive finish was just a continuation of the exciting technical rebound effort.

Whatever the case may have been, it was an uplifting finish for the bulls at the end of an arduous week that was highlighted by a number of outsized losses in the growth stock and AI universe following earnings reports. Stocks like Take-Two (TTWO 232.00, -20.40, -8.08%), The Trade Desk (TTD 43.00, -2.90, -6.31%), and Microchip (MCHP 56.28, -3.07, -5.17%) felt that pinch today. Tesla (TSLA 429.52, -16.39, -3.68%) did, too, after 75% of shareholders approved a pay package for Elon Musk that could be worth possibly as much as $1 trillion if various benchmarks are met.

To be sure, there were outsized gains registered in some corners as well, yet there was a clear leadership void among the mega-cap stocks and growth stocks that weighed on the indices and investor sentiment. NVIDIA (NVDA 188.15, +0.07, +0.04%), which battled back from a near 5.0% decline today that briefly took it below its 50-day moving average (183.43), declined 7.1% this week. Microsoft (MSFT 496.82, -0.28, -0.06%) declined 4.1% this week and has an eight-session losing streak.

The Vanguard Mega-Cap Growth ETF declined 3.1% this week, while the Russell 3000 Growth Index dropped 2.9%. In comparison, the Russell 3000 Value Index fell just 0.1% this week, while the equal-weighted S&P 500 shed just 0.2%.

Reviewing today's economic data:

• The preliminary University of Michigan Consumer Sentiment reading for November fell to 50.3 (Briefing.com consensus: 54.0) from the final reading of 53.6 for October. In the same period a year ago, the index stood at 71.8.
  • The key takeaway from the report is that the decline in sentiment was widespread across the population, with one notable exception: consumers within the largest tercile of stock holdings.
• Consumer credit increased by $13.1 billion in September (Briefing.com consensus: $8.0 billion) following an upwardly revised $3.1 billion increase (from $0.4 billion) in August.
  • The key takeaway from the report is that the expansion in consumer credit in September was driven largely by nonrevolving credit.