Washington replaces the Fed as the story

Tue 11/10: CPI 8:30 ET, 0.3% headline consensus; CoreWeave after the close. Thu 11/12: claims 194K, Cisco and Applied Materials after the close. Fri 11/13: PPI 0.4%. Tue 11/17: Nvidia after the close. Payrolls Dec 4; FOMC Dec 8-9.

The house view

Ahead this week, Tuesday's October CPI (0.3% headline consensus) and CoreWeave's report test whether the data-center selloff is a repricing or a reflex. A December hike sits near 80% priced, SPY has lost four weeks running, and the S&P just had its worst day since April 2025.

• SPY closed Friday at 735.29, down 2.7% on the week and for a fourth red week; QQQ lost 4.98% and IWM 2.03% (Coil bars through November 6).
• The S&P fell 4.36% on Thursday, its worst day since April 2025, and the Nasdaq Composite closed more than 10% under its October 6 record (Fox Business, 24/7 Wall St).
• October payrolls were 165K against 65K expected and unemployment fell to 4.1%; a December 8-9 hike is priced at 78% to 80% (24/7 Wall St, Reuters).
• October CPI prints Tuesday November 10 at 8:30 am ET, headline consensus 0.3% after 0.6%; core is 0.2% in FXEmpire's preview and 0.3% in BiGGo's.
• AAII bears stood at 48.4% for the week ending November 4 against a 31.5% average, taken before Thursday's break (AAII).

Week horizon: 6 right, 2 wrong, 2 mixed over 10 graded notes. Month, quarter and year: 0 graded, 30 too\_early across those same 10 notes. The archive holds 10 prior notes, dated 2026-08-30, 2026-09-06, 2026-09-13, 2026-09-20, 2026-09-27, 2026-10-04, 2026-10-11, 2026-10-18, 2026-10-25 and 2026-11-01; the first had nothing to grade.

The setup

Downtrend. SPY sits 0.67% over its 200-day with the 10, 20 and 50-day averages all overhead, so a close under the 200-day is the line that turns a pullback into a range break. QQQ is already 3.64% under its own 200-day. Daily stochastics of 6.0 on SPY and 11.2 on QQQ describe how stretched the move is and say nothing about what follows.

What is actually going on

Heading into CPI on Tuesday, the market is still trading the election, which moved it more than the Federal Reserve did. Democrats won broadly on Tuesday, and on Thursday the S&P fell 4.36%, its worst day since April 2025. The Nasdaq Composite fell 5.52% and closed in correction territory, more than 10% under its October 6 record, and the Philadelphia Semiconductor index lost more than 12%, per Fox Business. The stated reason is regulation. Electricity prices have made data centers a political issue, some Democrats have called for pauses or limits on new projects, and the market priced a slower and more expensive build-out. Jakub Rochlitz of eToro said the selloff was markets pricing in the midterm results. Jed Ellerbroek of Argent Capital Management called it the capitulation phase for data-center capex beneficiaries, semiconductors above all.

The same week produced the data that matters for the committee. October payrolls rose 165,000 against 65,000 expected, September was revised to 60,000 and unemployment fell to 4.1%, per 24/7 Wall St. Fed funds futures moved the December 8-9 hike from 70% to about 78%, and Reuters put it near 80% with roughly two more increases priced for this cycle. The committee had held at 3-3/4 to 4 percent on October 28 by a 10 to 2 vote, with both dissenters preferring a quarter-point increase. So equities fell on politics into a rate path that tightened on the data, and neither offered the other relief. The old reflex that weakness in stocks brings help from the Fed is not operating. The one exception in this week's coverage is narrow: Matthew Martin of Oxford Economics supports a December hike but says increases in early 2027 could drop off if tech stocks and oil keep falling.

The live argument is whether the political move is a permanent repricing or a reflex. Adam Turnquist of LPL Financial called the week a knee-jerk reaction to the midterms. Keith Lerner of Truist said AI remains the main theme of the bull market and the selloff may offer a longer-term opportunity. The other side is Jim Cramer's: slower data-center construction could force capex discipline on the hyperscalers, which is why Microsoft and Amazon treated the news as a positive, per 24/7 Wall St. This connects to last month's story. The financing worry was about the buyers of chips spending past their cash flow. A regulatory brake helps the buyers' cash flow and hurts the sellers, so the winners and losers of the two stories are mirror images.

That is why Friday's tape was split. AMD reported on November 3 with earnings of 2.09 a share against 1.89 expected, per Robinhood, and rose 11% on Friday alone. The semiconductor ETF SMH gained about 3.6% and Apple slipped. A group that fell 12% in a day did not bounce as one. Stock-by-stock demand evidence is starting to outweigh the group label, the first sign of discrimination inside a selloff that began as indiscriminate.

Positioning leans bearish but may not have peaked. The AAII survey for the week ending November 4 showed 48.4% bearish against a 31.5% average, and that reading was taken before Thursday's break. The one-year high is 53.3%, from September 16. Jay Woods of Freedom Capital Markets wants the VIX above 30 before calling a washout. No spot VIX is available here, and the VIX futures ETF used as a proxy gained 14.2% on the week, which shows fear rising without showing its level.

What the market keeps trying is a bounce, and what it keeps failing to do is hold one. The post-election rally on Wednesday was erased the next day, per The Star. The index has now lost four weeks in a row. Small caps held up better than the leaders in November, down 2.03% against 4.98% for the Nasdaq-100 proxy, while gold recovered 4.7% on the week after October's slide, per the GLD proxy. Crude is the one input this note cannot pin down. Published weekly figures for Brent and WTI disagree by sign and no Friday settlement could be sourced, so the oil proxy's 12.1% weekly fall is reported here and nothing further is claimed about supply.

Where this sits against consensus

On the policy path we sit with the street: futures put a December hike near 80% and Reuters has about two more increases priced (November 6 to 7), and the committee's own 10 to 2 vote leans the same way. On the equity reaction we differ in emphasis. LPL's Adam Turnquist (24/7 Wall St, November 7) calls the week a knee-jerk reaction and Truist's Keith Lerner calls AI the main theme of the bull market. We read the political risk as having no calendar yet, which is why the year stays neutral and not constructive. Published year-end S&P levels of 7,900 from Yardeni Research and 7,700 from Wells Fargo (Kitco, September 15) sit 7.1% and 4.4% over Friday's close. We would be early if Nvidia reaffirms spending on November 17, and late if a state sets a dated limit on data-center capacity.

Scenarios

Central — 38%

CPI lands near consensus, the December hike keeps its current price, and the group sorts itself stock by stock. SPY spends the week between its 60-day low and its 10-day average without a close under the 200-day.

Trigger. Core CPI at 0.2% to 0.3% on Tuesday 2026-11-10 and CoreWeave and Applied Materials holding guidance.

Invalidated by. A SPY Friday 2026-11-13 close outside 712.00 to 758.00.

Upside — 27%

A soft core print trims December odds and equipment commentary confirms spending, so the oversold stochastic resolves up. SPY reclaims its 10-day average and QQQ moves toward its 200-day.

Trigger. Core CPI at 0.2% or below on 2026-11-10 with Applied Materials order commentary intact on 2026-11-12.

Invalidated by. SPY failing to close over 750.00 on Thursday or Friday, or IWM closing under 270.23.

Downside — 35%

A hot core print lifts the second hike while CoreWeave reopens the financing worry. SPY loses its 60-day low and the 200-day, and the put strikes near 725 come into play.

Trigger. Core CPI at 0.4% or above, or CoreWeave guiding capital spending higher with cash turning more negative.

Invalidated by. SPY closing any day before Friday over its 10-day average near 757.40.

The week ahead

• 2026-11-10October CPI at 8:30 am ET (0.3% headline consensus after 0.6%, FXEmpire); CoreWeave after the close (loss of 1.55 on 3.5 billion revenue)
• 2026-11-12Jobless claims at 194K; Cisco (1.32 on 18.1 billion) and Applied Materials (4.06) after the close (FXEmpire)
• 2026-11-13October PPI at 8:30 am ET: headline 0.4% after 1.3%, core 0.3% after 0.7% (FXEmpire); grading date for the SPY test band
• 2026-11-17Nvidia fiscal third-quarter results after the close (24/7 Wall St, Reuters previews)
• 2026-12-04November jobs report at 8:30 am ET per the BLS schedule
• 2026-12-09FOMC decision with a Summary of Economic Projections; the Federal Reserve calendar lists the meeting as December 8 to 9
• 2026-12-10November CPI at 8:30 am ET per the BLS schedule

The next five sessions

This week

Tuesday opens the week. October CPI prints at 8:30 am Eastern with headline consensus at 0.3% after 0.6% in September, per FXEmpire. Core is 0.2% in that preview and 0.3% in BiGGo's, so the two sources split on the number that matters. ING reads a 0.3% print as tipping the December decision toward a hike. Nick Rees of Monex argues the hike is nearly priced already and only a CPI well below consensus, or a sharp miss on November payrolls, changes that. The print is asymmetric. A hot number adds little to a December price near 80%, but it moves the second hike, and Reuters has roughly two more increases in the price of this cycle. A soft number is the one with room to reprice.

CoreWeave reports Tuesday after the close, with a loss of 1.55 a share on 3.5 billion of revenue in the preview. It carries the most weight of the week's earnings because it is the financing question in one ticker. Thursday adds Cisco at 1.32 on 18.1 billion, a day after a Morgan Stanley downgrade to Equal Weight, and Applied Materials at 4.06. Commentary on equipment orders from Applied is the most direct read on whether chip spending survives the political fear that hit the group on November 5. Claims are Thursday at 194K after 189K, and PPI closes the week on Friday at 0.4% after a 1.3% jump, with core at 0.3% after 0.7%.

The tape arrives oversold. SPY's daily RSI reads 35.1. In 15 earlier weeks since 2024 with two or more red weeks and the index under its 10-week average and 8-week EMA, the next week's median move was +0.02% with 8 of 15 higher, ranging from -3.07% to +5.67%. That is a coin flip with fat tails, which suits a week that starts with CPI. Open interest sits close to the Friday close. The November 9 expiry carries 35,819 puts at 725 and 34,557 at 710, and the November 10 expiry has 11,269 calls at 740. These are OCC contract counts as of November 5, not gamma, and they mark where the options crowd is positioned and nothing more.

The next four weeks

This month

Through November 27 the month has one dated test of the political discount and one of the rate path. Nvidia reports fiscal third-quarter results on Tuesday November 17 after the close, per the Reuters and 24/7 Wall St previews. The group lost more than 12% in a day on regulatory fear, and this is the first hard demand data inside the window. The number to read is whether customers reaffirm build-out plans, not the size of the beat. The stock closed Friday at 186.68 against 181.60 on Thursday, a bounce of 2.8% that leaves the debate open.

The second test is the feedback loop. Matthew Martin of Oxford Economics backs a December hike and says early-2027 increases could come off the table if tech stocks and oil keep falling. It is the first published statement in this week's coverage that equity weakness feeds the rate path, and it applies to the second hike, not the first. The month grades defensive because the legs lean together: a hike priced near 80% and leadership under a political cloud. The counterweight is positioning. AAII's bearish reading of 48.4% against a 31.5% average predates Thursday's break, so the next survey shows whether sentiment capitulated. Jay Woods of Freedom Capital Markets wants the VIX above 30 before calling a washout. Coil has no spot VIX, and VIXY, a futures ETF, gained 14.2% on the week.

History is wide at four weeks. The same oversold analog shows a median of +2.59% four weeks out, with 8 of 13 higher, and a range from -12.27% to +12.59%. The median is a base rate and the range makes it hard to use.

The next quarter

This quarter

Ahead in the quarter are three dated anchors close together. November payrolls arrive December 4, the committee meets December 8 and 9 with a new Summary of Economic Projections, and November CPI follows on December 10, per the BLS and Federal Reserve calendars. The projections are the first since the October dissents. They show where participants place the end of this cycle, and the market already assumes roughly two more increases per Reuters. A dot path that stops at one adds a relief leg. One that points past two lands on a group already under political review. The quarter-to-date record is lopsided: QQQ is down 11.31%, SPY 3.58% and IWM 1.52%, so the damage sits in leadership more than in the broad market.

Published year-end index levels still sit well above the tape. Yardeni Research at 7,900 and Wells Fargo at 7,700 (Kitco, September 15) are 7.1% and 4.4% above Friday's 7,376.86. Neither has been cut since the political break, and the first revision usually follows the data. Strategists who cut after the election and not before would confirm that the discount is meant to last.

Small caps are the counter-signal and this week they gave back their gain. IWM leads the year but now sits under its 200-day again, which says the rotation out of leadership found no home in the Russell 2000.

The next twelve months

This year

Ahead over the year the argument has changed shape again. In October the question was who pays for the build. After November 5 it is whether the build continues at the pace the earnings assume. The two can be separated. If the political discount is permanent, expected capital spending falls, which helps free cash flow at the buyers of chips and hurts the sellers. Jim Cramer made that case, and a 24/7 Wall St item on it cites Apple up 5.3% against Nvidia down 6.5% in one session, though Fox Business put the Nvidia drop at 9.26% and the outlets differ on the day. If the move is temporary, as LPL's Adam Turnquist suggests by calling it a knee-jerk reaction to the midterms, the group re-rates on earnings. Keith Lerner of Truist holds that AI remains the main theme of this bull market.

The index is still green for the year: SPY +7.83%, QQQ +6.80% and IWM +11.18%. The S&P sits 5.65% under its October 6 record of 7,818.93, a correction in the Nasdaq and not yet in the broad measure. The uncertainty is regulatory timing. Electricity prices and state-level proposals are the stated mechanism, per Fox Business, and neither has a calendar. Without a date the year stance cannot lean, which is why neutral stays, with less confidence than a month ago.

The levels

Into the week SPY sits at 735.29 under its 10, 20 and 50-day averages and 0.67% over its 200-day at 730.38, with 732.71 the 60-day low. QQQ at 656.10 is under its 200-day at 680.89. IWM at 273.67 is under its 200-day at 279.00.

• SPYThe 200-day is the line that separates a pullback from a range break, with the 60-day low sitting just above it. The 725 and 710 strikes carry the largest put open interest in the near expiries, as of November 5.
• QQQQQQ closed 3.64% under its 200-day with a daily stochastic of 11.2. A bounce meets the 10-day at 692.64 first, 5.6% overhead, and the 200-day is the line that has to be recovered.
• IWMIWM sits 1.91% under its 200-day, having given back last week's reclaim. A close over 279.00 would say the break was a one-week shakeout.

What would change it

Whether core CPI lands at 0.2% or 0.3%. Whether CoreWeave and Applied Materials show spending intact. Whether SPY holds its 200-day on a close, and whether the next AAII survey passes its 53.3% bearish high.

Leadership

• Leading: Gold, with GLD up 4.71% on the week, Defensives, consumer discretionary and real estate on the board's relative-strength read, AMD on Friday, up about 11% after beating estimates on November 3
• Lagging: Semiconductors, with the Philadelphia index down more than 12% on Thursday per Fox Business, Technology broadly, with XLK down 7% on the week per 24/7 Wall St, QQQ, down 4.98% in November against 2.03% for IWM, Power and data-center suppliers named in the Thursday selloff, including Constellation Energy and GE Vernova

The line has moved from those who spend to those who supply them. Buyers such as Apple and Microsoft held up better than the chip and neocloud names on the day, and Friday's AMD bounce suggests the group is being sorted by demand evidence.

Cross-asset

• oil (oil; USO is a WTI futures proxy and not WTI itself). USO fell 12.1% on the week and sits 17.82% over its 200-day. Sources disagree on the weekly sign for Brent and WTI, and no Friday settlement was confirmed, so the proxy is the only oil figure used here.
• long\_treasuries (20y+ Treasuries, TLT as the vehicle). TLT gained 0.1% on the week, 1.92% over its 50-day and 3.02% under its 200-day. A ten-year close was not sourced this week. Duration did not move on a payroll print that lifted hike odds.
• dollar (US dollar; UUP is a DXY proxy and not DXY itself). UUP gained 0.73% on Friday and 0.45% on the week, 4.16% over its 200-day. A firmer dollar with a hike priced keeps financial conditions tight for the build.
• gold (gold; GLD is the ETF proxy). GLD gained 4.71% on the week after October's slide and still sits 9.42% under its 200-day. Saxo's Ole Hansen names the 4,000 round number in the metal as the level to hold, per BiGGo; the ETF is a proxy and does not trade at the metal's price.
• volatility (VIX futures ETF, not spot VIX). VIXY gained 14.23% on the week and sits 22.03% over its 50-day but 10.59% under its 200-day. Fear rose, though the ETF does not show whether a washout has occurred.

The record

Last Sunday's note set one test: SPY's Friday close inside 737.00 to 773.00. It closed at 735.29, 1.71 under the floor. Grade: wrong. A policy reading of the election was missing from our scenario branches. Week horizon: 6 right, 2 wrong, 2 mixed over 10.

• This week — wrong. We said: Neutral at 0.45 on one test: SPY's Friday 2026-11-06 close inside 737.00 to 773.00, with the election, payrolls and four AI-linked earnings reports as the swing variables. What happened: SPY closed Friday at 735.29, 1.71 below the 737.00 floor of the band, after losing 2.7% on the week. The S&P 500 fell 4.36% on Thursday alone, its worst day since April 2025, and payrolls printed 165K against a 63K consensus.
• This month — too early to call. We said: Defensive at 0.50, wrong if SPY closes any Friday through 2026-11-27 above its 20-day at 770.47 with QQQ over 725.00 the same Friday. What happened: The first Friday since the call closed SPY at 735.29, under the 20-day now at 763.36 and over the 200-day at 730.38, and QQQ closed at 656.10, 7.28% under its 20-day. The trigger has not fired.
• This quarter — too early to call. We said: Defensive at 0.55, wrong if SPY closes any Friday before 2026-12-31 above 781.62 with IWM over its 50-day at 284.27 the same Friday. Graded 2026-12-31. What happened: SPY closed at 735.29, 5.9% under 781.62, and IWM closed at 273.67, 1.91% under its 200-day. Last week's thin small-cap reclaim reversed.
• This year — too early to call. We said: Neutral at 0.45, back to constructive if the ten-year closes under 4.80% with 2027 index EPS estimates intact. What happened: No ten-year close was sourced this week, so that leg is ungraded, and 2027 index EPS estimates were not re-sourced. The S&P 500 closed at 7,376.86, 5.65% under its October 6 record.

Week horizon: 6 right, 2 wrong, 2 mixed over 10 graded notes. Month, quarter and year: 0 graded, 30 too\_early across those same 10 notes. The archive holds 10 prior notes, dated 2026-08-30, 2026-09-06, 2026-09-13, 2026-09-20, 2026-09-27, 2026-10-04, 2026-10-11, 2026-10-18, 2026-10-25 and 2026-11-01; the first had nothing to grade.

Sources

• Federal Reserve, FOMC statement, 2026-10-28 (10 to 2 vote, target range 3-3/4 to 4 percent)
• Federal Reserve, FOMC meeting calendar, retrieved 2026-11-08 (December 8-9 meeting)
• BLS release schedule, CPI, retrieved 2026-11-08 (October CPI on November 10, November CPI on December 10)
• BLS release schedule, Employment Situation, retrieved 2026-11-08 (November report on December 4)
• 24/7 Wall St, 2026-11-07, The S&P 500 Just Had Its Worst Week Since the April 2025 Tariff Crash
• Fox Business, 2026-11-05, Stocks plunge as Dem midterm sweep fuels AI regulatory concerns
• FXEmpire, The Week Ahead: CPI and Tech Earnings Test a Fragile Stock Market (calendar and consensus)
• Reuters via Rallies.ai, Wall St week ahead: As tech swoon roils market, US inflation data on tap
• BiGGo Finance, U.S. October CPI Due Tuesday, December Rate-Hike Bets Approach 80% (CME FedWatch, ING, Monex, Oxford Economics)
• AAII Investor Sentiment Survey, week ending 2026-11-04 (48.4% bearish)
• The Star (Malaysia), 2026-11-06, US stocks plunge as AI wipeout erases post-election rally
• 24/7 Wall St, Cramer's midterm AI trade: Apple up 5.3%, Nvidia down 6.5% in one session
• Kitco via Reuters, 2026-09-15, Wells Fargo trims S&P 500 index's year-end target to 7,700
• Yardeni Research cut to a 7,900 year-end S&P 500 target from 8,400, via Newsquawk
• Robinhood earnings results, retrieved 2026-11-08, AMD reported 2026-11-03 after the close, EPS 2.09 against 1.89 estimated
• Robinhood equity quotes, retrieved 2026-11-08, November 5 closes and November 6 prints for AMD, NVDA, AAPL, SMH and SPY

Prices, ranges, moving averages and open interest in this note come from our own market-data bars through 2026-11-06. Every external claim names its source above. This note is forward-looking market research: it describes scenarios and the conditions that would confirm or invalidate them. It is not investment advice, not a recommendation, and states no forecast, price target or trade.