To The Moon

For the week ending Fri, 30 Oct 2026, US market closed off October 2026 sharply lower as a heavy-tech sell-off dragged down all 3 major benchmarks. (see below)

By the time 4pm came around,

• The Dow lost -1.05% (-550.14 to 51,770.3).

• The S&P 500 fell by -0.78% (-59.63 to 7,580.07).

• Nasdaq Composite tumbled -2.27% (-589.87 to 25,437.00)

For the month of October 2026: (there’s a surprise)

• DJIA: +1.70% (+864.26 to 51,770.31).

• S&P 500: -0.39% (-71.47 to 7,580.07).

• Nasdaq: -5.30% (-1,424.06 to 25,437.00).

Weekly Drivers / Catalysts.

The 4 key catalysts of the week were :

(1) Tech & AI Spending Pushback.

• Disappointing earnings reports and heavy AI-related capex from major tech firms (eg. $Alphabet(GOOG)$ and $Amazon.com(AMZN)$) raised investor concerns & questions about whether massive AI infrastructure investments will yield near-term returns

(2) Disappointing Tech Earnings & Guidance.

• Chipmaker $Intel(INTC)$ suffered a historic -29% single-day drop after issuing a bleak 4th-quarter profit outlook.

• Meanwhile, AMZN & GOOG Q3 earnings left market wanting more, and software/platform peers like Reddit (RDDT) & ServiceNow (NOW) plummeted on soft commentary.

(3) FOMC Interest Hike Halt.

• On Wed, 28 Oct 2026, US Fed decided to hold interest rate steady at 3.75%–4.00% during the week's FOMC meeting.

• Fed chair Kevin Warsh signaled a patient stance amid elevated core inflation readings and stronger-than-expected Q3 GDP growth.

When US Fed pauses its tightening cycle, it temporarily eliminates the immediate threat of escalating borrowing costs, providing a psychological breathing room for US stock market.

(4) Defensive Rotation.

• As tech risk sentiment soured, capital rotated into defensive sectors such as Utilities, Healthcare, and Consumer Staples, all the while Treasury yields eased

Overlapping quarterly earnings was the ‘regular’ US economic reports released by the various US federal statistical agencies. (see below)

Do you think they exerted pressures on US market as well ? Let’s find out !

Reports out last week:

• Tue, 27 Oct 2026 - New home sales for September 2026.

• Tue, 27 Oct 2026 - US consumer confidence for October 2026.

• Wed, 28 Oct 2026 - Advanced US Trade Balance in Goods for September 2026.

• Thu, 29 Oct 2026 - Advanced estimates of Q3 GDP

• Thu, 29 Oct 2026 - US jobless claims.

• Thu, 29 Oct 2026 - US Personal consumption expenditure for September 2026.

US New Home Sales.

US new-home-sales report (for September 2026) dropped in on 27 Oct 2026 was weak in trend but modestly better than expected.

Sales slipped to a 676,000 annualized pace, down -0.6% from previous month (August 2026) and -5.3% YoY.

Surprisingly, it exceeds Wall Street’s estimates of 651,000, suggesting demand held up better than feared before mortgage rates rose further.

The median new-home price was $400,400, up +3.9% from August but down -3.9% YoY.

It is evident that builders are using price cuts and incentives to support affordability.

Inventory was 476,000 homes, with months’ supply at 8.4 months, still well above the roughly 5-to-6-month level normally viewed as balanced.

In summary, the report is volatile and carries very wide confidence intervals, so the monthly move alone should not be overread.

The broader message is a sluggish, affordability-constrained market.

As for US consumers, the latest report shows that housing remains expensive and difficult to enter, especially for 1st-time buyers.

With mortgage rates above +7.0% it has pushed many prospective purchasers to pause searches, while builders are responding with discounts, incentives, and rate buydowns.

US Consumer Confidence.

According to survey from The Conference Board, US consumer confidence for October 2026 revived to June 2026 levels as consumer appraisals improved both for (a) present situation and (b) future expectations indexes.

Consumer confidence jumped by +7.5 points to 91.7, crushing analysts’ forecasts of 81.2 and last month’s upwards revised 84.2. This comes as gas prices eases.

Drilling into consumer confidence index’s composite metric index of present situation and future expectations, here’s where the ‘magic’ begins.

The Present Situation Index, based on consumers' assessment of current business and labour market conditions, increased by +8.6 points to 120.4.

At the same time, the Expectations Index, based on consumers' short-term outlook for income, business, and labour market conditions, recovered by +6.9 points to 72.6, partially reversing 3 consecutive monthly declines.

The survey period for this month's preliminary results was between October 1- 21. With the recent rout in tech stocks from mid to late October 2026 - wonder how will that impact the report when it is next released.

Advanced US Trade Balance in Goods.

The September 2026 Advanced US Trade Balance in Goods report revealed that the goods trade deficit unexpectedly widened by +2.1% to -$134.9 billion, from August 2026’s improved $132.07 billion. (see above)

Latest readings came in significantly worse than the -$130.2 billion deficit Wall Street economists had forecasted and it is definitely going to be a significant drag on Q3 2026 GDP growth..

Driven by an AI infrastructure investment boom & robust consumer demand, imports surged to a record high, significantly outpacing a solid rise in domestic exports:

• Imports rose by +2.4% to $344.15 billion - a 7th rise in 8 months. to a record high. It was led by a +7.5% gain in capital goods imports; with industrial supplies & materials imports down -6.0%.

• Exports rose by +2.6% to $209.24 billion. This is a 2nd straight MoM increase to a 5-month high, driven by a +12.8% rebound in foods, feeds & beverages exports; although auto exports down -5.6%.

From a traditional macroeconomic standpoint, this is a weak report because it indicates a substantial drag on Q3 2026 GDP growth.

However, there is a counter argument. Some analysts said latest report revealed a structural strenght instead.

This is because the deficit is widening due to productive business investment rather than economic decay, representing underlying operational strength in US domestic marketplace.

Looks like the verdict is still out there.

Advanced estimates of US Q3 GDP.

According to advance estimate released by US Bureau of Economic Analysis (BEA), in Q3 2026, US economic growth accelerated to an annualized rate of 3.4%. (see above)

This was higher than Wall Street estimates of 3.2% and definitely higher than previous month’s actuals of a mere +2.2%.

The main drivers is accelerated business investment - heavily fueled by high-tech and AI infrastructure spending, strong consumer spending, and an upturn in government spending.

Conversely, net exports acted as a drag on growth due to a decrease in exports combined with an increase in imports.

BEA will publish its 2nd estimate for Q3 2026 GDP and corporate profits on 25 Nov 2026 morning before US market opens for trading.

US Jobless Claims.

Latest US labour market remains exceptionally tight & resilient, with weekly claims hovering near 57-year lows.

Economists are still labelling current climate as a "low-hire, low-fire" state, where strong corporate profits protect existing jobs even as geopolitical and trade uncertainties make firms hesitant to expand headcounts.

Weekly claims.

For week ending 24 Oct 2026, weekly claims fell by -1,000 to 194,000, lower than economists’ estimates of 198,000 and margainlly lower than previous week’s upwards revised 195,000. (see below)

Incidentally, this also marked the lowest level of new applications since mid-July 2026. Crucially, it represents the 6th consecutive week that claims stayed below the 200,000 threshold.

The 4-week moving average, that filters out week-to-week volatility, fell by -1,250 to 196,750, underscoring a firmly entrenched downward trend in structural layoffs.

Continuing claims.

For week ending 17 Oct 2026, continuing jobless claims also fell by -21,000 to 1.701 million versus economists’ estimates of 1.72 million versus previous week’s downwards revised 1.722 million. (see above)

The reduction brings ongoing state unemployment insurance beneficiaries to the lowest point in more than 3 years, while the insured unemployment rate maintained a rock-bottom 1.1% that has held unchanged since late August 2026.

The 4-week moving average for continuing claims meanwhile edged up marginally by +500 to 1.710 million.

Stability of this moving average confirms that unemployed individuals are managing to secure new work relatively quickly rather than pooling in long-term unemployment systems.

The latest jobless claims reports prove that US job market remains healthy.

With the October 2026, US consumer confidence report coming in higher at 91.7% and (now) jobs remain secure, US Fed could focus more on lowering stubborn inflation and less on protecting employment.

Personal Consumption Expenditure.

US’s September 2026 inflation reports reveals that inflation is reaccelerating and running hotter than the Fed’s 2% target, driven heavily by an energy crunch.

All 4 major inflation metrics landed exactly in line with market consensus, showing no unexpected relief for the economy.

Headline PCE.

• On a MoM basis, headline inflation expanded by +0.5%, matching the market consensus exactly but marking a noticeable acceleration from August 2026’s 0.3%.

• On a YoY basis, headline PCE advanced by +3.6%, landing squarely on economic forecasts and climbing higher than previous month's 3.4% reading. (see above)

Meanwhile, core inflation—which excludes volatile food and energy costs—demonstrated mixed but persistent momentum.

Core PCE.

• On a MoM basis, core PCE grew by +0.3%, again matching both Wall Street consensus and the 0.3% pace set in August 2026.

• On a YoY basis, the annual trend showed renewed pressure as core PCE ticked up to +3.1%, hitting the market projection precisely and rising above August 2026's 3.0% baseline.

In summary, the latest data indicates that while inflation did not exceed Wall Street's expectations, consumer price pressures are structurally moving higher.

Both headline metrics experienced a clear acceleration compared to the prior month.

While monthly core inflation managed to hold steady, the annual core rate still edged upward, confirming that the underlying, long-term inflationary trend remains uncomfortably sticky for policymakers.

Will US Fed still have any excuse not to hike interest rate come December 8 -9, as the FOMC team meets for the last time ?

My viewpoints: (mine only)

The US economy enters November 2026 still growing based on the followings - (i) Q3 GDP accelerated to 3.4% on AI infrastructure spending, (ii) resilient consumers, and (iii) a tight labour market.

However, the sticky 3.1% core PCE inflation keeps the Fed cautious. Housing remains a weak spot, with high mortgage rates, ample supply, and affordability constraints weighing on buyers.

For US markets, October’s Nasdaq decline of -5.34% versus Dow’s gain of +1.7% shows the AI rally has become narrow & vulnerable to disappointing earnings or excessive capex.

This week’s quarterly earnings from $Apple(AAPL)$ & Palantir (PLTR) on Mon, 03 Nov 2026, $Advanced Micro Devices(AMD)$ on Tue, 04 Nov 2026, will be an immediate test of whether AI demand is broadening beyond the mega-cap infrastructure names.

AAPL’s guidance and AMD’s AI-chip outlook could especially set the tone for the tech sector.

And then there is $Berkshire Hathaway(BRK.B)$ earnings on Sat, 07 Nov 2026.

Investors will closely watch new-ish CEO Greg Abel’s Q3 2026 report (his 2nd) to see if BRK.B has continued its multi-billion-dollar stock buybacks despite Class B shares hitting all-time highs around $548.56 on 26 Oct 2026. (see below)

The market will be laser focused on whether Abel maintained his aggressive capital deployment streak to chip away at the company's massive $365.5 billion cash pile.

Analysts will also dissect a projected -5.6% YoY decline in core operating earnings to evaluate the health of flagship insurance, railroad, and utility segments under new-ish leadership.

Together with investors questioning AI spending returns, will this week’s earnings restore confidence in AI trade or deepen rotation away from tech? What do you think ? Share your thoughts & views ?

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• Do you think the Fed can keep supporting growth without reigniting inflation, given sticky core PCE, a tight US labour market, and a possible December rate hike?

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