The US Stock Market Has Entered A Structural Risk-Off Repricing Phase

On Friday, the Dow Jones (US30) declined by 0.46% (down -1.39% for the week). The S&P 500 (US500) gained 0.31% on the day (but fell -3.07% for the week). The technology-heavy Nasdaq (US100) closed Friday up 1.35% (yet ended the week down -5.50%). Friday’s rebound in the technology sector and dip-buying activity in chipmaker stocks (AMD +11%, Lam Research +8.2%, Intel +7.7%, Micron +5.1%) offset only a small portion of the weekly losses. The week’s performance confirms that the market has entered a phase of structural risk-off repricing due to concerns over potential regulatory restrictions on AI infrastructure following the US elections. After Friday’s localized rebound among chipmakers, investor attention is shifting toward earnings reports from key infrastructure players, including CoreWeave, Nebius Group, Applied Materials, and Cisco Systems. Investors will closely scrutinize their CapEx trajectories and debt levels. If management commentary confirms a slowdown in orders for energy-intensive data centers due to regulatory pressure from Democrats in Congress, capitulation across the technology sector is likely to resume.

Strong October Nonfarm Payrolls (NFP) data (+165K jobs versus an expectation of +65K, with unemployment declining to 4.1%) delivered the market an opposite macroeconomic signal. On the one hand, the US economy continues to demonstrate resilience. On the other hand, a strong labor market combined with an 80% probability of a Federal Reserve rate hike in December is preventing a decline in bond yields and continues to pressure the rate-sensitive Dow Jones.

The upcoming US macroeconomic week shifts market focus from the political implications of the election results toward key inflation indicators, namely the October Consumer Price Index (CPI) and Producer Price Index (PPI) reports. An expected slowdown in headline CPI from 0.6% to 0.3% and in core CPI to 0.2%, alongside a projected decline in PPI to 0.4%, could confirm a moderation in primary inflationary pressures. However, following the unexpectedly strong NFP report, markets are pricing in roughly an 80% probability of a second Federal Reserve rate hike in December. In this environment, traders will closely monitor comments from Fed officials. If policymakers reaffirm their commitment to a hawkish stance, US Treasury yields are likely to resume their upward trajectory, placing renewed pressure on the technology sector.

The weakening of the Canadian dollar to 1.4110 CAD per USD reflects the growing asymmetry between US and Canadian monetary policy trajectories and labor market conditions. Canada’s employment fell by 4,700 jobs in October (following a decline of 68,300 in September), while unemployment rose to 6.7%, highlighting increasing weakness in the private sector, which lost 52,500 jobs. In contrast, strong US NFP data (+165K) creates a stark macroeconomic divergence. The Bank of Canada’s October rate hike of 25 basis points to 2.50% (the first increase since 2023), aimed at countering inflationary pressures in the energy sector, is increasingly at odds with deteriorating labor market conditions. Markets are sharply reducing the probability of further tightening in December.

In Europe, Germany’s DAX (DE40) fell 1.92% on Friday (up +0.07% for the week), France’s CAC 40 (FR40) declined 0.81% (up +2.26% for the week), Spain’s IBEX 35 (ES35) lost 0.60% (up +3.44% for the week), while the UK’s FTSE 100 (UK100) closed down 1.01% (down -0.52% for the week). A weakening German trade surplus and declining industrial production, alongside accelerating industrial inflation (PPI at 11.1%), are intensifying stagflationary pressures on the ECB. As a result, EUR/USD remains anchored within the 1.1250-1.1300 range as investors assess earnings reports from industrial leaders such as Siemens and Infineon.

In Asia, Japan’s Nikkei 225 (JP225) plunged 5.96% on Friday (down -10.74% for the week), China’s FTSE China A50 closed lower by 1.25% (up +4.29% for the week), Hong Kong’s Hang Seng (HK50) declined 1.27% (up +5.06% for the week), while Australia’s ASX 200 (AU200) ended Friday down 0.49% (up +1.73% for the week).

The Asia-Pacific macroeconomic agenda shifts investor attention toward domestic demand dynamics and monetary policy trajectories in China and Japan. In China, predictions for consumer inflation (CPI) to slow to 0.8%, while producer inflation (PPI) accelerates to 5.4%, point to mounting margin compression among Chinese manufacturers. Rising energy costs are proving difficult to pass on to consumers due to weak domestic demand, while projected new yuan lending is expected to collapse to CNY 80 billion, highlighting subdued credit activity. Exports and imports continue to benefit from resilient demand for technology products and AI-related components, but a narrowing trade surplus limits fundamental support for the yuan (USD/CNY).

The publication of the Bank of Japan’s (BoJ) Summary of Opinions, following the decision to keep rates unchanged at 1.25%, alongside an expected rebound in producer inflation (PPI +0.3%) and rising household spending (+0.3%), reinforces the durability of Japan’s wage-price spiral. Investors are analyzing earnings reports from SoftBank, Honda, and Mitsubishi UFJ for evidence that corporate earnings remain resilient with the yen trading near 157.80.

The Australian dollar’s (AUD) decline below the 0.7000 level against the US dollar reflects a substantial reassessment of risk. The currency’s fundamental weakness is being driven by the combined impact of the regulatory shock affecting the US technology sector and signals that the Reserve Bank of Australia’s tightening cycle has reached its conclusion. The rate increase to an 18-year high of 4.85%, coupled with a divided vote within the Board (6-3), convinced markets that terminal rates have likely been reached, pushing the probability of another hike in December close to zero.

Preliminary results from Saturday’s parliamentary election in New Zealand fully validated market concerns regarding political uncertainty. The Labor Party (29.36%) and the National Party (29.21%) are effectively tied, while the current center-right bloc maintains only a one-seat majority in the expanded parliament. Official election results will not be announced until November 27, leaving the country under a caretaker government for at least three weeks and prolonging coalition negotiations. For the New Zealand dollar (NZD/USD), this scenario implies a continued fiscal deadlock and sustained pressure on the currency.

• S&P 500 (US500) 7,376.86 +23.13 (+0.31%)

• Dow Jones (US30) 51,285.73 -237.33 (-0.46%)

• DAX (DE40) 25,820.36 -504.65 (-1.92%)

• FTSE 100 (UK100) 10,673.94 -108.72 (-1.01%)

• USD Index 102.28 +0.73 (+0.72%)

News feed for: 2026.11.09

• China Inflation Rate (m/m) at 03:30 (GMT+2) – CHA50, HK50 (MED)

• German Trade Balance (m/m) at 09:00 (GMT+2) – EUR (MED)

• Mexico Inflation Rate (m/m) at 14:00 (GMT+2) – MXN (MED)