Key facts
- Big tech earnings reports are expected to provide clues on AI trade direction and monetization.
- Concerns exist about potential market turmoil due to heavy dependence on a few AI companies.
- Rising borrowing costs are fueling fears of a pullback in AI infrastructure spending.
- The Fed is expected to keep interest rates unchanged, but investors foresee a potential hike by year-end 2026.
- Market reaction to midterm election outcomes has historically been mixed, with uncertainty clearing often boosting stocks.
Stocks are navigating a crucial two-week period with significant events on the horizon, including earnings from major AI players, a Federal Reserve interest rate decision, and the US midterm elections. The broader market has been relatively flat, but specific AI-related stocks have experienced a notable de-risking in October, raising concerns about potential contagion effects.