Wall Street dey monitor AI stocks with eagle eye dis week as investors dey scratch head over how the AI buildout go work under the new Democratic Congress. Last week, market witness sharp swings after U.S. midterm election results and Democrats’ takeover of Congress. Equities, gold and Bitcoin initially rally after the outcome, but the optimism no last. Fears about the outlook for the AI buildout under a Democratic Congress then trigger sell-off in tech stocks.
The outlook for AI stocks go remain key concern for investors dis week, keeping U.S. for focus as markets continue to weigh the implications of the midterm elections. Prospective legislation don raise market fears of slower data centre construction and stricter oversight of AI infrastructure. Wall Street been already scrutinizing substantial capital expenditure projections and questioning when those investments go deliver returns.
Thursday’s 5.5% Nasdaq slump followed by 1.7% recovery on Friday, suggesting investors dey cut risk and trim exposure rather than exit the AI trade completely. Tuesday’s post-close results from CoreWeave set to be among the week’s most significant earnings announcements. Dem regard am as bellwether for the AI trade, the heavily indebted neocloud firm need to set out how e plan to fund expansion and handle its borrowing costs. A further major test for the AI infrastructure trade arrives on Thursday, when another prominent neocloud firm, Nebius, releases its results. If worries surrounding the AI trade persist, the Nasdaq fit face fresh selling pressure.
Attention also turn to October’s U.S. CPI and PPI releases. An upside surprise in headline CPI, potentially above 4%, na risk. Investors expect headline CPI to increase from September’s 3.7% to 3.9%, alongside close scrutiny of core CPI. Although crude prices drop steeply last week, including 16% decline in Brent, oil rally roughly 15% over October.
Ahead of the releases, markets assign 80% probability to Fed rate hike in December after Friday’s nonfarm payroll report exceed expectations. Employment increase by around 165,000, substantially above 65,000 forecast, while unemployment edge down to 4.1%. If inflation run hot on the heels of robust employment figures, expectations of December rate hike fit become more firmly established. That fit strengthen U.S. dollar, especially against risk-sensitive currencies such as Australian dollar. With AUD/USD testing its June lows, strong data and continued tech-sector weakness fit drive the pair towards its 2026 lows.
Friday bring UK GDP release, following Bank of England’s widely expected rate increase of 25 basis points. Forecasts point to UK GDP growth of 0.7% quarter-on-quarter in Q3, compared with 0.5% in Q2. Ahead of the GDP figures, BoE deliver 25 basis point rate hike with more hawkish voting split than anticipated and lift its inflation forecast.
