by Eric Criscuolo - Market Strategist

Published on 11/04/26 (a/o 2:00 pm)

It was a volatile evening/pre-market. S&P futures initially sold off ~1.5% as polls were closing but started to bounce around midnight as President Trump began making comments saying he would accept the outcome and suggested he’d be willing to work with Democrats. He also downplayed the prospects of re-starting military strikes against Iran. The S&P 500 opened up ~1% and has added to that, up well over 1%. The index has regained the 100d and 50d ma after loosing both the past week.  

The strength is broad-based as the equal-weight and small caps trade about inline. The VIX was rising as we approached the election, clearing 20, and has fallen back below 17, with the overhang removal, hedging reversals and vol crush likely all playing a part in the strength today. And that's before we get to oil.

A lot of the action is straight from the election playbook though there are nuances. The AI trade is under significant, broad pressure overall on concerns Democratic leadership would slow the data center and AI buildout. The NYSE Semis Index and DRAM ETF are down over 3%. Neoclouds and powered-shell providers are getting slammed (CRWV, GLXY, CIFR down over 10%). Energy/ infrastructure stocks aren't faring much better (CAT, ETN, VRT, GEV, EME, PWR, FIX down ~10+%). IPPs are the downside standouts in Utilities, with losses of at least 5%. One caveat is the mega-caps. The NYSE 100 index is up >1%. The hyperscalers and frontier AI model developers (GOOG +4% AMZN +7%, META +2%, MSFT +7%) are up sharply (ORCL flat) as an AI slowdown would temper their prodigious cash burn and could burnish their market position versus upstarts. Outside of AI, Defense contractors are under pressure (NOC, LMT -5%). SPCX and TSLA are down but off their lows, as are correctional facility stocks.

On the upside beyond the hyperscaler/megacaps, solar stocks are seeing solid gains (TAN ETF +6%). Hospitals and managed care (especially Medicaid) are strong as is pharma, though that group  could come under renewed scrutiny should Democrats look to the negotiated price deals with the administration. Overall, 9/11 sectors are higher. Energy is the big laggard with Brent getting smashed and falling below $100. Industrials is the only other sector lower on Defense and data center infrastructure sell-off. Travel & leisure, retail and are homebuilders sharply higher. Staples are also a leader. Most Materials stocks are higher but some chemicals names are under pressure as European gas sells off, cutting into their input cost advantage.  

Treasuries are rallying, pushing yields down ~5bp across the curve. A knee-jerk reaction of lower AI capital-raising and election mandate on affordability and disinflation are contributing to the rally. The USD index is down ~0.5% trading a little above 101 as it weakens against major peers. The ADP Employment data came in ahead of expectations with 86k added split between small, medium and large companies. Pay metrics held steady from last month up 3% for job stayers and 4.8% for job changers. The Treasury left auction sizes and mix unchanged, pointing to more bill issuance versus coupons to fund the deficit, and suggested that would remain constant for the next couple of quarters, though they continue to monitor market conditions. ISM Services was slightly below expectations and last month though still expanding. New Order growth slowed as did Prices, though they remain highly elevated. 

Oil was trading lower and accelerated to the downside after JD Vance took to social media and blamed the Iran War for his party’s losses (as did Trump earlier). House Democratic Leader Jefferies said that Congress will pass a bill to stop tariffs and the war. Brent is currently down ~10%, providing another tailwind for equities. Natural gas prices in Europe and down >5%. Precious metals are rallying sharply as crude falls. Copper is modestly higher and Freeport-McMoRan said it would spend $4.5 billion modernizing its Arizona mine to boost output. Crypto is seeing a relief rally as Bitcoin regains $80K, despite Democrats having not been the biggest supporters of crypto. Ag is slightly higher overall. 

European equities ended sharply higher, with major indexes sporting gains ~2%. Banks posted solid gains with several majors up ~5%. Pharma was broadly higher as were consumer goods and telecom. Tech and Industrial names lagged. European inflation was on the screws, coming in at 4.0% y.y on the headline and 2.5% core. Final Service PMIs were tweaked lower. Tech Sweden’s central bank raised its policy rate 25bp to 2.0% as expected.

The Nikkei fell below its 200d ma for the first time since June 2025 but ended well off its lows, though finished down over 1%. Most sectors were in the red after the market was closed yesterday for a holiday. The big tech names Kioxia, Tokyo Electron and Softbank were down 3-5%. Despite South Korea’s tech exposure, the Kospi ended higher as the mega-duo SK Hynix and Samsung saw only modest losses while the rest of the market registered broad gains. China saw a solid rally with the Hang Seng and Shanghai up 1-2%. Beaten up Tech and AI stocks were among the leaders (CATL +4%, SMCI +9%, Cambricon +10%). Local ETFs favored by the “national team” reportedly saw record inflows over the past two days as officials unleashed measures to contain equity markets. Chipmaker YMTC postponed its IPO until 1H27, coming after news that regulators told banks to pause IPOs and large share sales by shareholders. The private Rating Dog Services PMI was weaker than expected, falling to 50.8 vs 51.6 last month and missing the 51.5 estimate.

Qualcomm reports tonight with a good chance for the election’s impact on AI spending to be part of the Q&A. Tomorrow’s data includes Challenger job cuts, weekly claims, Productivity and gas inventories. The BOE and Mexican central bank will announce their rate decisions. Fed speakers will include Hammack and Barkin.

US: