Last week was the busiest week of the earnings season and the macro calendar at the same time, and the market finished lower. The FOMC held at 3.75%-4.00% in a 10-2 vote, with two governors dissenting in favor of a hike, confirming December is live. Q3 GDP printed at 3.4% annualized, above the 3.2% consensus. Core PCE came in at 3.1% year-over-year with a softer 0.3% monthly reading. Microsoft crushed estimates with Azure growing 48%. Amazon posted a record 13.9% operating margin. But Alphabet fell 8.7% after hours as Google Search ad growth decelerated to 12% and AI Mode began cannibalizing the revenue model that built the company. The S&P 500 fell 0.57% on the week to 7,580.07, the Nasdaq dropped approximately 2%, and October closed as the Nasdaq's worst month since March 2025 at -5.3%. This week: Apple earnings Monday, midterm elections Tuesday, ISM Services Wednesday, and the October jobs report Friday. Here is what to watch.
Market News, Week of November 2, 2026
The FOMC delivered the most hawkish hold since the September hike. The 10-2 vote, with two governors preferring an immediate 25 basis point increase, is the most divided the committee has been in over a year. The statement dropped its prior forward guidance language entirely, replacing it with a description of economic activity as "strong." When a central bank removes its forward guidance, it is telling the market it retains full optionality. Combined with a 3.4% advance GDP print and core PCE at 3.1% re-accelerating on an annual basis from August's 3.0%, the December meeting is no longer a coin flip. Fed funds futures moved to price December as the primary remaining hike date with probability above 80% by Friday's close. Chair Kevin Warsh's press conference language after the decision left December explicitly open, declining to say the committee was done.
The hyperscaler earnings split was the clearest signal in years about where AI investment is generating returns and where it is not. Microsoft reported fiscal Q1 2027 revenue of $92.3 billion, up 19%, beating the $90.7 billion consensus. Azure grew 48% year-over-year to $33.2 billion, the first time Microsoft disclosed Azure revenue in dollar terms rather than just growth rates. Non-GAAP EPS was $4.89 against a $4.73 estimate. Capital expenditure was $39.4 billion, below the roughly $50 billion the market feared. The stock held and rose after hours. Amazon reported Q3 operating income of $28.1 billion, against guidance of $22.5-$26.5 billion, a significant beat. AWS grew 39.3% year-over-year, its fastest pace in nearly five years. Operating margin hit 13.9%, Amazon's highest ever. Both Microsoft and Amazon demonstrated that AI infrastructure spending is translating into accelerating cloud revenue growth.
Alphabet told the opposite story. Total revenue was $127.6 billion, up 25% year-over-year, but Google Search ad revenue grew only 12% to $63.35 billion, decelerating sharply from prior quarters. YouTube ads grew 9% to $11.21 billion, slowing from Q2's 13%. The reason, according to management commentary, is that Google's own AI Mode is answering search queries directly, reducing the click-through to ads that drives Search revenue. Shares fell 8.7% after hours. This is a structural threat, not a cyclical one. Google built a $56 billion quarterly advertising business on users clicking search results. AI Mode delivers the answer without the click. Amazon and Microsoft are collecting revenue from the AI infrastructure buildout. Alphabet is funding the infrastructure that is disrupting its own revenue stream.
The GDP and PCE combination on Thursday was the week's most market-moving macro event. The 3.4% Q3 GDP print, above the 3.5% GDPNow estimate's neighborhood and well above Q2's 2.2%, confirmed what the corporate earnings were showing: the AI capital spending cycle is adding to GDP even as it weighs on earnings quality. Core PCE at 3.1% year-over-year re-accelerated from August's BEA-revised 3.0%, but the 0.3% monthly reading was below the 0.4% consensus, providing marginal relief. The net reading: the economy is too strong and inflation too sticky for the Fed to pause in December without new evidence of deterioration. The October jobs report Friday is that evidence, or the lack of it.
Economic Calendar, Week of November 2, 2026
Monday, November 2: ISM Manufacturing PMI for October (10:00am ET, impact: High). Apple and Palantir both report Q3 earnings after the close. ISM Manufacturing has been in expansion at 54.6 in September but new orders contracted. A second consecutive new orders contraction entering November would be the leading indicator that manufacturing deceleration is becoming durable. Apple's Q3 earnings are the week's first major data point on whether the consumer tech cycle is holding under the rate environment. iPhone revenue guidance for the holiday quarter and any commentary on AI feature adoption in iOS will determine whether Apple extends the tech selloff or breaks from it.
Tuesday, November 3: US Midterm elections. JOLTS Job Openings for September (10:00am ET, impact: High). The midterms are the week's wildcard. Markets will be watching for any shift in Congressional composition that signals changes to fiscal policy. A change in control that moves toward additional fiscal stimulus is inflationary and pushes December hike probability higher. JOLTS openings in August were already showing labor demand softening. A September JOLTS print below 7 million openings would confirm the labor market is cooling toward a level that gives the Fed pause on December.
Wednesday, November 4: ADP Private Payrolls for October (8:15am ET, impact: Medium) and ISM Services PMI for October (10:00am ET, impact: Very High). ADP is the first payroll preview ahead of Friday's official number. After September's 29,000 nonfarm payrolls, the market is watching whether October shows a rebound or confirms a trend. ISM Services is the more market-moving release. Services covers approximately 77% of the U.S. economy. The ISM Services prices-paid and employment sub-indices are the numbers to watch inside the report. A services employment sub-index below 50 two days before the official jobs report would be the most bearish possible setup into Friday's number.
Thursday, November 5: Initial Jobless Claims for the week ended October 31 (8:30am ET, impact: Medium). The four-week average on claims has been trending in a direction consistent with the September jobs miss. A claims print above 230,000 would add to Friday's setup as a weak jobs number. A claims print below 195,000 sets up a potential jobs beat Friday.
Friday, November 6: October Nonfarm Payrolls (8:30am ET, impact: Very High). This is the most important number of the week and one of the most important of the year. Consensus is approximately 55,000-60,000, after September's 29,000 miss. The key question: was September a one-month aberration from weather and federal workforce disruption, or the beginning of a deteriorating trend? If October prints above 80,000, September was likely noise and the Fed hikes in December. If October prints below 40,000, the labor market is in a sustained softening cycle and the December hike debate reopens. The unemployment rate is expected to hold at 4.2%. Average hourly earnings growth of 0.3% month-over-month is the wage-inflation read alongside the headline number.
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