Technology shares led a broad advance on Wall Street as investor enthusiasm for artificial intelligence returned after a difficult stretch, lifting major indexes ahead of a pivotal week of earnings from the industry’s largest companies and a Federal Reserve policy decision. A gauge of chipmakers rose 2.7 percent while the Nasdaq 100 climbed 1.1 percent and the S&P 500 gained 0.7 percent. The Philadelphia Semiconductor Index advanced 2.8 percent. Brent crude fell below $114 a barrel. Bonds wavered. The move came as traders positioned for results from Alphabet, Microsoft, and Amazon, three companies collectively valued at more than $10 trillion, and as the Federal Reserve, European Central Bank, and Bank of Japan were widely expected to leave rates unchanged.
Three of the world’s biggest technology companies are expected to show healthy growth when they report. For equity investors, however, the more consequential questions center on the scale of spending on artificial-intelligence infrastructure and the timing of any meaningful payoff. “It’s going to be very interesting to see how these stocks react to their earnings/guidance,” said Matt Maley at Miller Tabak. “So far, many tech names have sold off following their reports. Therefore, given how important these companies are to the AI phenomenon, their reactions should be particularly important.” Not every large technology stock warrants the same treatment regarding future potential growth, according to Chris Brigati at SWBC. “The period of a rising market lifting all stocks has started to shift,” he said. “Future expectations are more focused upon execution risk and how much future success is already embedded in the current stock price.”
The rebound in artificial-intelligence-related shares received additional support from Anthropic’s initial public offering filing. The company behind Claude reported $16.3 billion in revenue in the first half of the year alone, an increase of more than 1,300 percent from the same period in 2025. About 79 percent of revenue in the first nine months of 2026 came from outside the company’s top five customers, a figure that investors viewed as evidence of broad and diversifying adoption among business customers. The firm held $131.7 billion of cash and cash equivalents at the end of June, a sum that stood out given that it has raised $141.1 billion to date. “If you just take one number versus the other, that suggests that to date this company has spent $9 billion basically building this business,” said Yuri Khodjamirian, chief investment officer at Tema ETFs. “They have a lot of future commitments to compute, there’s a lot of lease commitments, things like that that come in the future. But that’s quite remarkable.” He added that the balance sheet strength was “a very positive sign.” Max Gokhman, head of AI and digital asset solutions at Franklin Templeton, observed that “what’s more important is that their recurring revenue’s coming from both an increasing number of enterprise customers, and it’s not concentrated.” The filing helped reinject enthusiasm after the artificial-intelligence trade had taken a drubbing over the prior two weeks amid concerns about the amount of debt financing the infrastructure build-out. “Certainly the Anthropic S-1 has stoked greed a lot more than fear,” Gokhman said.
Meta Platforms announced that it had upsized a planned sale of common and preferred stock to nearly $98 billion. The $25 billion common-stock component attracted demand for about five times the available shares. More than half of the shares in the common-stock offering were allocated to long-only and existing investors, with the investors taking the 15 largest stakes accounting for about 70 percent of the shares. The offering priced at $625 per share, a 2.7 percent discount to the prior Friday’s closing price. Meta shares fell as much as 1.4 percent to $621.47. The mandatory convertible preferred stock offering was also multiple times oversubscribed. The company intends to devote the proceeds to artificial-intelligence infrastructure and personal superintelligence. It has unveiled a personal artificial-intelligence agent known as Muse and an AI model called Muse Wonder, which leadership says is on par with OpenAI’s ChatGPT and Anthropic’s Claude in tasks such as coding. “They’re smart to say let’s get a bunch of capital while we can because it may feel somewhat expensive today, but if the AI debt fears come true, it’s going to be really expensive next year when they really, really need it,” said Alexander Morris, chief investment officer at FM Investments.
United Parcel Service climbed after raising its full-year outlook, providing a positive signal for the broader economy heading into the holiday season. Boeing sank after cutting its delivery target. On the economic front, U.S. consumer confidence unexpectedly rose in October for the first time in four months. The Federal Reserve, under Chairman Kevin Warsh, who has eschewed guidance on future moves, faces a delicate communications challenge at the post-meeting press conference. Warsh is unlikely to offer much insight about December but may also prefer not to sway market bets away from the prevailing expectation for a rate increase.
Consumer Resilience Meets Housing Strain as Mortgage Costs Rise
U.S. consumer confidence increased for the first time in four months, reflecting brighter assessments of the job market and business conditions. The Conference Board’s gauge rose 7.5 points to 91.7, the highest reading since June and above all projections in a Bloomberg survey of economists. A measure of expectations for the next six months advanced nearly 7 points to 72.6, while a gauge of present conditions reached its highest level since April. “The recovery was in line with retail gasoline prices easing from September to October,” said Fergus McCormick, senior economist at the Conference Board. “Yet, despite the increase in October, consumer confidence remained on the long-term downward trend that’s persisted over the past few years.” More Americans viewed business conditions as good rather than bad, and the share who see jobs as plentiful rose to a six-month high. The difference between those saying jobs are plentiful and those indicating they are hard to get improved, a metric closely watched by economists. Sentiment improved across all political groups, particularly among Republicans. Over the past six months, consumers younger than 35 and those earning $100,000 or more had expressed greater confidence.
Consumers nevertheless remain troubled by higher prices, wage growth that lags inflation, and rising borrowing costs that make homes, vehicles, and other large purchases less affordable. With midterm elections a week away, affordability remains a defining issue for voters. Plans to buy big-ticket items were mixed, while vacation intentions edged lower. Sentiment has historically been a poor leading indicator of personal spending, which has stayed resilient and continues to support economic growth. “The labor market remains supportive of spending activity,” said Ben Ayers, senior economist at Nationwide. “The trend in consumer surveys remains soft but that hasn’t stopped households from maintaining a solid pace of purchases.” The survey period ran from October 1 to 21. The Conference Board index generally emphasizes labor-market conditions, whereas the University of Michigan’s measure, which edged down to a five-month low last week, places greater weight on personal finances and the cost of living. The two series have largely tracked each other in recent years.
New single-family home sales edged lower as higher mortgage rates outweighed homebuilders’ efforts to cut prices and offer incentives. Sales decreased 0.6 percent in September to an annualized rate of 676,000, beating the median economist estimate of 651,000. The median sales price of a new home fell 3.9 percent from a year earlier to $400,400, marking the seventh of nine months so far in 2026 to show a year-over-year decline. Mortgage rates rose about half a percentage point last month, reaching the highest level in almost three years in early October, and have eased only slightly since. The surge in borrowing costs has weakened demand and pushed a measure of homebuilder confidence to its lowest level in 14 years. “Cutting prices and offering mortgage rate incentives are helping keep sales moving, but the market remains supported more by builder concessions than by strong underlying demand,” said Daniel Vielhaber, an economist at Nationwide. Higher rates are likely to keep conditions challenging at least through year-end.
Inventory of new homes for sale dropped 2.3 percent from a year ago to 476,000, representing 8.4 months of supply at the current sales pace—the least so far this year but still well above pre-pandemic levels. Sales in the South, the largest region, fell 6.6 percent to an annualized 413,000. Sales also declined in the Midwest, offsetting gains in the West and Northeast. Entry-level buyers are particularly sensitive to financing costs, leaving builders focused on that segment, such as D.R. Horton and Meritage Homes, more exposed. Builders have offered smaller homes and subsidized mortgage rates in an effort to offset poor affordability. New-home sales are considered a timelier gauge than existing-home purchases, though the data are volatile; the government report indicated 90 percent confidence that the change in sales ranged from a 14.4 percent decline to a 13.2 percent gain.
Corporate Earnings, Capital Raises, and Strategic Repositioning
United Parcel Service raised its full-year revenue guidance to about $92.6 billion from a prior forecast of $91.2 billion, exceeding the average of analyst estimates, and also lifted its adjusted earnings guidance. The improved outlook signaled optimism for the holiday season amid resilient U.S. consumer demand. “US consumers remain resilient and the outlook for holiday demand is strong,” Chief Executive Officer Carol Tomé said. Adjusted third-quarter earnings were $1.69 a share, ahead of the $1.63 estimate, and revenue rose to $22.9 billion. The results came despite tariff-related demand pressure and elevated fuel costs linked in part to the U.S. war in Iran. The company can implement fuel surcharges, though the extent of its pricing power remains an open question. “Fuel remains a revenue and earnings driver for parcel carriers,” noted JPMorgan analyst Brian Ossenbeck. “A large fuel tailwind implies weaker underlying core price.”
Shares reversed earlier gains after Tomé warned that average daily volumes in the fourth quarter would be down year over year, reflecting the completed effort to carry fewer low-margin packages for Amazon. The comparison is skewed because that reduction was still under way in the prior-year period. UPS spent about 18 months cutting half the volume from its largest customer, which represented 12 percent of sales in 2024. Revenue at the supply-chain business, including healthcare, rose 18.2 percent. The company is past the inflection point on several elements of its network overhaul, Tomé said, with evidence in volume, operating profit, and operating margin. It recorded a $130 million after-tax charge related to the transformation. Negotiations with the Teamsters for a new drivers’ contract once the current pact expires in 2028 remain ahead. UPS plans to hire about 100,000 seasonal workers.
Boeing lowered its full-year aircraft delivery target, saying it needs more time to reach higher, sustainable production rates. The company will fall short of its 500 full-year 737 target and deliver closer to 90 787 Dreamliners, the lower end of guidance. Shares dropped 10 percent, the largest decline in 18 months. “I’ve said before, our progress is not always going to be perfectly linear, but we continue to improve and I’m confident we are on the right track,” Chief Executive Officer Kelly Ortberg said after third-quarter results missed expectations. The commercial airplane division posted a $697 million loss, wider than the $360.8 million deficit expected but far smaller than the year-earlier period that included a $4.9 billion charge on the delayed 777-9. Earnings rose at the defense and space unit, aided by the sale of a research laboratory and higher global defense spending. Free cash flow was $464 million, beating estimates of $325.1 million, which RBC Capital Markets’ Ken Herbert called the highlight of the quarter. The result put the free-cash-flow guidance of $1 billion to $3 billion more within reach. Boeing reported a core loss of 34 cents a share, wider than the estimated 21 cents, while total revenue rose 4 percent to $24.2 billion. Consolidated debt stood unchanged at $45.9 billion. The company has access to $10 billion in undrawn credit facilities. Engine delivery issues continue to constrain rate increases on the 737 Max and 787. Boeing reiterated its intention to begin 777-9 deliveries next year, roughly six years behind schedule. Rival Airbus is scheduled to report the following day.
JetBlue Airways shares surged 20 percent to $2.86 after the carrier reaffirmed its path to operating profitability in 2027 and at least $1 in earnings per share plus positive free cash flow in 2028. The stock had fallen to a record low the previous day. “Despite significant fuel headwinds and a challenging summer operation, our revenue performance is among the strongest in the industry,” Chief Executive Officer Joanna Geraghty said. JetBlue anticipates a negative operating margin of 4.5 percent to 6.5 percent for 2026. It reported an adjusted third-quarter loss of 60 cents a share, missing the 55-cent estimate. The airline carries roughly $9 billion in debt. A group of creditors, including holders of $2 billion in bonds due 2031 and a $742 million first-lien loan, has been working with restructuring advisers. Geraghty noted a significant disconnect between bond-market pricing that anticipates default on loyalty-backed debt and the company’s results. High jet-fuel prices linked to the war in Iran are pressuring the industry; larger rivals including Delta, American, and Southwest have cut profit outlooks. JetBlue has posted six consecutive years of operating losses.
General Motors plans to shift its listing to the Nasdaq Global Select Market from the New York Stock Exchange, retaining the GM ticker and beginning trading on Nasdaq on November 17. The move positions the automaker as a technology-focused company emphasizing automated driving and electric vehicles and offers potential eligibility for the Nasdaq-100 Index. “The Nasdaq is a natural home for our listing as we grow,” Chief Financial Officer Paul Jacobson said, citing the company’s technology-driven strategy. Shares rose 4 percent. JPMorgan analysts expect inclusion when eligible in December, noting that GM’s market capitalization would make it the second-largest non-member after Hilton. The company has worked on the listing for more than a month, hoping index-fund demand will broaden the shareholder base. Management has long viewed the shares as undervalued relative to cash flow and earlier announced a new $20 billion share-buyback authorization. Despite that announcement, shares had fallen as Chief Executive Officer Mary Barra warned of intensifying challenges. The departure after 115 years on the NYSE follows similar moves by Walmart, DoorDash, and, more recently, Hilton. Nasdaq has also attracted major technology listings including SpaceX and Anthropic.
The Artificial-Intelligence Build-Out: Capital, Talent, Infrastructure, and Skepticism
Memory and storage stocks that had been among the market’s strongest performers in the first half of the year lost momentum in the second half as investors questioned the durability of massive artificial-intelligence spending commitments. Sandisk, Micron, Seagate, and Western Digital rank in the bottom 10 percent of the S&P 500 in the second half of 2026. Even strong earnings have failed to reverse the trend. Western Digital’s results and forecast exceeded expectations and the company raised its dividend, yet shares fell 3 percent on concerns that AI spending had peaked. Micron beat profit and revenue projections and issued a stronger-than-expected outlook, but the stock is down 14 percent in October. Seagate reports after the close, with analysts expecting net income to triple; Sandisk follows later in the week, with earnings per share projected to soar more than 6,100 percent. On the day, Seagate rose 2.3 percent, Sandisk 1.3 percent, Micron 1.5 percent, and Western Digital 4.7 percent.
Since the start of the third quarter, Sandisk and Western Digital are down more than 40 percent, Seagate has lost 32 percent, and Micron has sunk 21 percent. Year-to-date gains remain substantial, led by Sandisk’s 434 percent surge. “The market is telling you that expectations are changing for how long the earnings boom is going to last for these companies,” said Joe Tigay, a portfolio manager at Equity Armor Investments. “Now that the trade has gotten long in the tooth, what can turn it around?” asked Andre Bakhos, president of Ingenium Analytics. “Not only will you need great earnings, but you’ll need to see follow-through next quarter and the one after that.” Massive AI capital expenditure is not expected to slow soon. Meta raised its spending plans last week, and Wall Street anticipates that Microsoft, Amazon, and Alphabet will affirm or raise theirs this week. Anthropic’s filing provided a further positive signal. Investors, however, are increasingly skeptical about the return on spending financed heavily by debt. A gauge of Meta’s credit risk hit a record after the company disclosed its projected capital expenditures. High oil prices and interest rates add to the challenging backdrop.
Valuations have compressed. Micron trades at five times estimated earnings over the next 12 months, the second-cheapest stock in the S&P 500 after Charter Communications, while Sandisk is under six times. Western Digital trades near 12 times and Seagate near 15 times, all discounts to the S&P 500’s roughly 19 times and the Nasdaq 100’s 20 times. Some caution that the historical cyclicality of memory demand makes low multiples warning signals, yet the scale of the AI build-out may render prior cycles less relevant. Analysts’ price targets imply more than 70 percent upside for Seagate and more than 80 percent for Sandisk over the next 12 months. Of the 74 stocks in the S&P information-technology sector, these four rank among the top seven in return potential. Seagate’s revenue is projected to rise about 56 percent in fiscal 2027 before decelerating, while Sandisk’s is expected to leap 140 percent in fiscal 2027 before slowing sharply and declining in fiscal 2029. “There used to be this concentrated FOMO mentality surrounding memory, but now investors are starting to weigh the risk of all that expenditure and debate whether it can keep going,” Bakhos said. External validation from the largest AI spenders remains essential; if their plans translate into profits, confidence should improve because capital expenditures will stay elevated. “The fundamental story seems largely intact over the near term, but risks are obvious and the bear case remains,” Tigay said. “Should they not live up to expectations, demand could fall off a cliff.”
The competition for artificial-intelligence talent has intensified, sending quantitative trading firms deeper into academia and public recruitment. First-year compensation packages for machine-learning and related PhDs at quant firms typically range from $450,000 to $650,000 and can reach $800,000. AI laboratories offer prestige, visibility, and potential equity windfalls. In response, firms including Qube Research & Technologies have launched programs sponsoring more than 70 PhD and postdoctoral researchers. Jump Trading funds academic fellowships. The Abu Dhabi Investment Authority has started a quant research residency. Capital Fund Management in Paris runs a machine-learning laboratory designed to resemble a university research group. G-Research, which employs about 1,000 people, announced the largest private-sector investment in the European Laboratory for Learning and Intelligent Systems, funding 36 researchers, and supports 43 PhD students across eight British universities. There is no expectation that sponsored researchers will join the firm or produce immediately applicable work; the payoff is reputational. “The second thing is that we benefit from one of the most powerful computing resources in the world. So whatever you want to test, you can do it,” said Charles Martinez, who leads academic outreach for G-Research.
CFM, the roughly $35 billion Paris-based quant hedge fund co-founded by a physics professor, hired a New York University mathematics professor to lead a laboratory that gives researchers academic freedom. “They are not under the pressure to build alpha models,” said Chief Product Officer Laurent Laloux. Leading conferences such as NeurIPS and ICML now feature booths from quant firms; nearly half of the top-tier sponsors at the upcoming NeurIPS conference are financial firms. Hudson River Trading, XTX Markets, and Jane Street operate their own data centers with GPUs. Some employees at Jump have adopted the title “member of technical staff,” a deliberately vague label popularized by OpenAI and Anthropic that blurs the distinction between researchers and engineers. “The competition for talent is as challenging as I’ve ever known it,” said Jump Chief Technology Officer Alex Davies. “AI labs are clearly the biggest competitor right now.” Financial markets hold particular appeal for researchers drawn to hard problems because, as Davies noted, “even if you perfectly solve prediction in finance, by rolling that out, markets will change underneath you, and you haven’t solved it any more.” Talent has moved in both directions: Hudson River Trading has lost employees to OpenAI, Two Sigma quants have joined Anthropic, while a few Google DeepMind scientists have joined Jump and Citadel Securities.
The Trump administration offered as much as $5 billion in financing to Constellation Energy to upgrade and modernize reactors in Illinois, Maryland, and Pennsylvania. The conditional loan commitment is expected to add nearly 1.1 gigawatts of electricity. Energy Secretary Chris Wright planned to announce the funding at an Illinois nuclear plant that will supply power to Alphabet’s Google. “The Energy Department is accelerating President Trump’s American nuclear renaissance and unlocking the full potential of our nation’s nuclear fleet,” Wright said. Upgrades to turbines and other components can expand output faster and more cheaply than new reactors, which can take a decade or more. Constellation shares rose as much as 5.3 percent and were up 2.8 percent to $259.63. The financing supports an executive-order goal of adding 5 gigawatts through upgrades at existing plants, 96 percent of which has been achieved. Projects cover six Illinois plants—Braidwood, Byron, Clinton, Dresden, LaSalle, and Quad Cities—plus Calvert Cliffs in Maryland and Limerick in Pennsylvania, with an option for future uprates. Constellation separately announced a $4.3 billion investment to upgrade 11 reactors, boosting output by 890 megawatts, under a 20-year power-purchase agreement with Google. Technology companies’ demand for electricity to power artificial-intelligence data centers is driving interest in nuclear power.
Solidigm, the American subsidiary of SK Hynix, is in talks with the U.S. Commerce Department to invest $45 billion in a new U.S. flash-memory plant, contingent on permission to send equipment to China to upgrade an existing facility in Dalian. The firm has told officials that enhancing the Dalian plant would accelerate development of the U.S. site by helping finance it. The total U.S. investment may approach $100 billion over time. Construction could begin next year; New York is among the states under consideration. Deliberations continue after SK Hynix last week scrapped plans for a possible $10 billion initial public offering of Solidigm amid opposition from regulators and shareholders. The vast majority of flash-memory chips are produced in Asia, though Micron operates an older factory in Manassas, Virginia. Commerce Secretary Howard Lutnick has urged SK Hynix and Samsung to expand U.S. memory production. The United States has restricted sales of chips and manufacturing tools to China but has granted exceptions to plants run by Samsung, SK Hynix, and Taiwan Semiconductor Manufacturing. Last year the Trump administration revoked validated end-user agreements that allowed certain imports, replacing them with annual approvals. A new U.S. plant could count toward South Korea’s broader investment pledges.
Private Markets, Hedge-Fund Governance, and Credit Consolidation
Two Sigma Investments’ co-founders are exploring a stake sale to resolve decision-making gridlock arising from their protracted feud. John Overdeck and David Siegel, each owning roughly half the firm, have held talks about selling a stake to a Middle East investor or a U.S. pension fund. The deliberations are early-stage and could end without agreement; any deal might take a year to 18 months. The firm, which manages about $85 billion, prefers an existing limited partner. At least one limited partner demanded a guarantee of first priority for additional fund investments. The founders’ disagreements over staffing, compensation, and other issues have produced repeated stalemates, with at least four matters entering arbitration. The firm cited the conflict as a material risk in a 2023 regulatory filing. Both men stepped down as co-chief executive officers and left the management committee in the following year. Overdeck later returned to the committee. Proxies have rotated: Hoffman cited ongoing governance challenges and resigned, and Platt is also departing. Overdeck’s ongoing divorce trial in New Jersey Superior Court adds complexity; his wife Laura seeks more than a third of his stake, which she estimated is worth $6.2 billion. He has testified that maintaining equal control is a principal concern. Despite the tensions, performance has held up. The Absolute Return Enhanced Fund gained 16 percent through September, and assets stand at an all-time high. A stake sale would mark at least the third large hedge-fund firm to bring in outside capital in recent years, following Millennium Management’s sale of a minority passive interest for about $2 billion and Verition Fund Management’s minority sale to Affiliated Managers Group.
Ares Capital agreed to acquire MidCap Financial Investment Corp. from Apollo Global Management in a cash-and-stock transaction with an enterprise value of $2.6 billion. MidCap shareholders will receive $10.88 per share, consisting of about $1.21 in cash and $9.67 in Ares Capital common stock—roughly a 30 percent premium to the prior closing price. MidCap shares rose 18 percent while Ares Capital fell 2.6 percent. Private-credit managers have sought to sell underperforming funds amid market turmoil and investor redemptions, attracting interest from competitors in the $1.8 trillion market. Other publicly traded business-development companies, including BlackRock’s TCP Capital, WhiteHorse Finance, and Investcorp Credit Management BDC, have said they are weighing strategic options that could include a sale.
Emerging-Market Politics and Fiscal Challenges
Israelis voted in their highest numbers in more than half a century in the first election since the October 2023 Hamas attack, effectively a referendum on Prime Minister Benjamin Netanyahu’s war-dominated tenure. Turnout reached 31.5 percent by noon, the highest at that stage since 1973. Voting closes at 10 p.m., when exit polls will be released. Netanyahu, 77, seeks reelection on the argument that military campaigns in Gaza, Lebanon, Syria, and against Iran have made the country safer. He has received an endorsement from U.S. President Donald Trump. Opponents led by 66-year-old former armed forces chief Gadi Eisenkot contend that Israel’s longest-serving leader is also its greatest threat and the main cause of growing international isolation. They cite his indictment for bribery, which he denies, and his partnership with nationalist extremists such as Itamar Ben Gvir. Polls consistently forecast that neither bloc will secure the 61-seat majority required to form a government, raising the prospect of prolonged negotiations or a second election. The Israeli Arab minority, about 20 percent of the population, could serve as kingmakers; the two Arab parties have offered support to an Eisenkot-led coalition, though some of his partners have ruled out serving in any government reliant on Arab votes. Tens of thousands of expatriates flew in to vote. The shekel appreciated about 1 percent against the dollar to 3.05, its largest one-day rise since August. IBI Investment House had noted that Israeli assets would probably climb if Netanyahu lost. Netanyahu issued an “emergency appeal,” warning that Arab turnout was running higher and urging Likud supporters to vote. A higher turnout raises the threshold for smaller parties, generally favoring larger ones. Beyond security, voters are deciding whether to draft ultra-Orthodox young men, the power of the Supreme Court, and issues of transparency and corruption. The economy has largely taken a back seat despite resilience in the shekel and stock market; the next government will confront a soaring defense budget, rising sovereign debt, and high living costs. At least 74,000 people have been killed in Israel’s Gaza campaign according to the Hamas-led health ministry. Settler violence in the West Bank has prompted European sanctions. Eisenkot has ruled out a two-state solution while condemning support for attackers of Palestinians. He warned that Netanyahu might not permit an orderly transition if defeated.
In Brazil, Luiz Inácio Lula da Silva secured a historic fourth presidential term, defeating Flávio Bolsonaro in a runoff after trailing in the first round. Markets sold off sharply on Monday as investors fretted over the fiscal outlook. The largest exchange-traded fund tracking Brazilian stocks plunged as much as 26 percent, its biggest intraday decline since inception in 2000. The real suffered its steepest drop in more than two decades, and interest-rate swaps surged so sharply that the exchange widened trading limits. Some $6 billion in equity sales lined up for after the vote were thrown into disarray. Brazil’s deficit has reached about 10 percent of gross domestic product and public debt exceeds 80 percent. High interest rates are beginning to constrain the economy, and households carry record debt. Lula, who turns 81 on Tuesday, pledged on election night to adapt his approach and bridge divides. Yet investors and some allies fear the scale of the victory will reinforce his long-standing preference for spending to drive growth. After the first round he increased benefits under the flagship social-welfare program by 15 percent and moved up payouts. He also announced debt relief for microentrepreneurs. Allies say he aims for a primary surplus excluding interest of 1.5 percent of GDP by the end of his term, short of investor desires. Possible economy ministers include Vice President Geraldo Alckmin and Piauí Governor Rafael Fonteles. Lula is unlikely to want his legacy defined by austerity and is expected to prioritize growth and inequality reduction, though room for large spending increases is narrower than at the start of his previous term. The new Senate has shifted sharply right after gains by Bolsonaro’s party, forcing Lula to work with centrist and right-wing parties. President Trump said the election looked as if it may have been “rigged” but added, “I like Lula.”
A Brazilian Supreme Court justice ordered federal police to investigate possible illegal foreign financing of Flávio Bolsonaro’s campaign, including by the Rockbridge Network, a U.S.-based group co-founded by Vice President JD Vance. Justice Flávio Dino directed investigators to examine possible use of foreign resources, services, or benefits, and whether intermediaries concealed them. The order also covers election advertising linked to Polymarket and Meta Platforms, and potential algorithmic manipulation. Brazilian law prohibits foreign economic assistance to campaigns. Allegations originated from former candidate Renan Santos. The probe will separately examine any connection between potential financing and foreign economic interests in Brazil’s rare earths and other critical minerals. Meta has denied favoring any candidate, attributing issues to technical incidents.
Anglo American’s top executive in Brazil, Ana Sanches, said the country should avoid picking sides in the global race for critical minerals and negotiate with everyone. Brazil holds one of the world’s largest rare-earth reserves, second only to China. Sanches urged clear rules for the new critical-minerals policy that gives a government council special powers over mining deals and supply agreements while offering incentives for domestic processing. She also called for treating high-grade iron ore as a critical mineral given its role in decarbonizing steel. Anglo’s Brazilian operations are concentrated at Minas-Rio, which produces high-grade ore of about 67 percent iron content. Third-quarter realized prices fell 12 percent year-over-year on higher freight costs, but the company is not planning production cuts. War-related disruptions have prompted redirection of cargoes. Anglo is proceeding with a planned merger with Teck Resources that would create a major copper producer, and it recently sold its nickel operations in Brazil to China’s MMG.
In Colombia, President Abelardo de la Espriella faces his first major test in Congress as he seeks support for deep spending cuts to reassure investors and pave the way for an International Monetary Fund deal. The government plans to send a package this week aimed at an adjustment worth more than 2 percent of gross domestic product next year; without it the deficit would exceed 9 percent of GDP. The challenge grew more difficult after he fired Interior Minister Rodrigo Lara following a procedural error that forced the 2027 budget to be enacted by decree. Lara’s replacement, Alejandro Ordóñez, is a religious conservative whose past positions—opposing same-sex marriage, describing abortion as a “cruel and silent contemporary holocaust,” and acknowledging participation in book-burning—may complicate coalition-building. “We need an interior minister who can build bridges,” said Senator Andrés Forero of the conservative Democratic Center party. The “rescue bill” relies on spending cuts rather than tax increases. The government also plans to tap multilateral lenders in hopes of reducing the roughly $28 billion of overseas borrowing budgeted for next year. Colombian assets had rallied after the election on hopes of restored fiscal discipline, but government bonds have since surrendered a large part of those gains. Analysts expect Congress to support the adjustment given the severity of the fiscal problem but doubt lawmakers will back higher taxes later.
Education, Contracts, and Forward Indicators
Applications to U.S. full-time MBA programs for the class of 2028 plummeted 27 percent, according to the Graduate Management Admission Council. Applications fell across all types of U.S. MBA and graduate business programs, including online offerings. International applications across U.S. graduate business programs dropped 38 percent while domestic applications fell 6 percent. Restrictive visa policies under the Trump administration were the primary driver. At UCLA Anderson, international applications fell about 30 percent and domestic applications about 10 percent. The entering class is smaller at most schools that have released profiles; Indiana University’s Kelley School saw its class reduced from 106 to 57. Only MIT Sloan held class size steady. Anderson had targeted roughly 300 students but fell short as richer schools offered more generous scholarships and some international applicants faced visa difficulties. Mean GMAT scores at Anderson rose 15 points. While a third of a sample of elite schools posted a substantially smaller share of international students, most kept the proportion relatively steady or increased it. Applications to European programs fell only 2 percent. At EDHEC, applications were down 17 percent, though conversion remained strong; growth from emerging markets such as Africa has not translated proportionately into enrollments because of financing and visa constraints.
Motorola Solutions was awarded a U.S. government contract valued at almost $140 million to upgrade Federal Bureau of Prisons communications systems at 63 facilities. The contract calls for replacing older radios and dispatch consoles over two years and issuing 22,000 new radios that include some cellular-network access and an emergency-alert feature if an officer falls. “Modernizing our radio communications system is an important investment in staff safety and institutional security,” said Bureau of Prisons Director William K. Marshall III. The bureau operates 118 institutions with more than 34,000 staff and more than 150,000 inmates. The upgrades comply with the Prison Camera Reform Act of 2021 and will be funded with resources from last year’s One Big Beautiful Bill Act. Two sites that manage radio traffic will also be upgraded.
Looking ahead, the Federal Reserve decision and post-meeting press conference on Wednesday will be closely watched for any signals on the December meeting. Alphabet, Microsoft, and Amazon earnings will be scrutinized for capital-expenditure plans and early evidence of returns on artificial-intelligence investment. Seagate and Sandisk results later in the week will test whether strong numbers can arrest the decline in memory and storage shares. Israel’s exit polls and the composition of any eventual governing coalition will shape regional risk premia. Brazil’s market reaction and Lula’s early appointments, particularly for the Finance Ministry, will set the tone for fiscal policy. Colombia’s congressional debate on the spending-cut package will determine whether the fiscal adjustment materializes. Solidigm’s discussions with the Commerce Department and the trajectory of U.S. export-control policy toward Korean-owned facilities in China remain open. Two Sigma’s stake-sale talks, if they advance, could take well into 2027 to conclude. JetBlue’s ability to execute on its profitability timeline amid elevated fuel costs and heavy debt will be monitored through 2027 and 2028. Boeing’s progress toward higher production rates and 777-9 deliveries next year will continue to influence aerospace supply chains. The path of mortgage rates and homebuilder incentives will shape housing data through year-end, while consumer spending resilience will be tested as holiday volumes arrive at UPS and other carriers.
