Weekly Market Commentary With Outlook For The Remainder Of 2026

Weekly Market Recap – Week Ending Nov 06, 2026

U.S. equity markets faced broad selling pressure this week, with sharp declines in technology, energy, and growth-oriented sectors weighing on the major benchmarks. The NASDAQ 100 ETF (QQQM) fell 4.97%, while the S&P 500 ETF (SPYM) declined 2.69%, led by steep losses in Energy (XLE), which plunged 12.00%, and Technology (XLK), which dropped 8.23%. Growth (VUG), Industrials (XLI), Materials (XLB), and Small Caps (VB) also moved lower, reflecting weakness across several market segments. In contrast, Communication Services (XLC) gained 4.89%, while Real Estate (XLRE), Consumer Discretionary (XLY), Financials (XLF), and Consumer Staples (XLP) posted gains, highlighting pockets of resilience amid the broader selloff. Despite market volatility, select stocks maintained strong 30-day momentum, led by AppLovin (APP), Genmab (GMAB), UCB (UCBJY), Bayer (BAYRY), Carvana (CVNA), and Moderna (MRNA), reflecting continued strength in digital advertising, biotechnology, pharmaceuticals, and selected consumer-related businesses.

In the below tables we use major ETF’s as a proxy for some major indexes as well as each of the sector groups into which we divide the overall markets. Tracking these over time provides a more defined picture of the US markets than simply tracking major indexes. This is followed by notable individual stock movers over the past month.

ETF/Sector weekly performance:

Last Week Top 3 Stock Performers (Global):

Strategy Note : Outlook for the Remainder of 2026 in the Wake of Midterm Election Results

If we thought tech has become undervalued two weeks ago and doubled down last week, we like them even more this week since there are 3 new undervalued stocks in the StateStreet Select Sector Technology ETF (XLK).  Overall, we found two Technology stocks that were ranked 5 (Strong buy) and rated in the most undervalued 25% of the ValuEngine universe with at least a 2% yield.   They are Lenovo Group (LNVGY) and Tower Semiconductor (TSEM).  While ranked lower 4 (Strong Buy), Match Corp. (MTCH), the dating app provider, also has a 2.1% yield and is rated 35% undervalued by our valuation model at its current $39 share price.

With the dust is still settling on last week’s midterm elections, some new realities face investors in weighing year end decisions. Market focus is rapidly shifting from campaign rhetoric to practical governance, starting with the tech and infrastructure landscapes. Congress may run the show on high-profile hearings regarding data centers and artificial intelligence infrastructure, but most actual and binding regulation will ultimately have to take place at the state level. While it is true that many states elected new Democratic governors who campaigned on stricter oversight, many of them do not have Democratic majorities in both state houses, which may make passing new anti-data-center legislation far more difficult than they originally promised voters.

Historically, this post-election policy sorting matches a highly favorable seasonal backdrop. Since 1976, and stretching back even further, November has historically ranked as the #1 best-performing month of the year for the S&P 500, averaging a return of roughly 1.6% to 1.8% and acting as a robust historical launchpad for year end rallies.

As we look to the remaining weeks of the year, corporate earnings yet to be reported will take center stage in defining the market’s true trajectory. Ben Graham famously reminded investors that in the short run, the market is a voting machine—weighing sentiment, political swings, and narrative—but in the long run, it is a weighing machine driven by actual fundamental value. While geopolitical tensions and macroeconomic data points like interest rates and inflation heavily influence the daily “voting”, the “weighing” of corporate earnings remains the structural anchor.

For the current calendar quarter, the vast majority of the heavy lifting is already behind us; following the peak weeks of the season, only 12% of S&P 500 companies still need to report, meaning 88% of the index’s third-quarter scorecard is already set in stone. Historically, the last two calendar months of the year generally act to smooth volatility rather than raising it, as seasonal institutional window-dressing, holiday retail data, and corporate buyback programs tend to ground trading volumes and stabilize price action. Alongside the final corporate reports, analysts heading into next week will be heavily focused on upcoming inflation indicators (CPI/PPI data), Federal Reserve speaker commentary for cues on December policy, and early guidance revisions for Q4 and full-year 2027.

The new congressional reality also forces a structural re-evaluation of market style and capitalization. With Democrats about to assume narrow control of both houses of Congress against a sitting Republican president, the resulting legislative gridlock alters the playbook for smaller companies. While a unified opposition Congress traditionally introduces a policy stalemate that prevents major tax hikes or sweeping regulatory overhauls, it typically creates an environment that favors large-cap growth over small-cap and mid-cap stocks, as smaller domestic companies remain more sensitive to sticky macroeconomic data and high financing costs. For style factors, this gridlock environment tends to give a slight relative edge to Growth over Value, as large tech and growth firms rely less on aggressive legislative help and benefit cleanly from the status quo.

Historically, when one party controls both houses of Congress but lacks a veto-proof two-thirds majority under an opposing president, it signals a period of defensive compromise. Over the past 50 years, this exact dynamic—a divided government featuring an opposition-controlled House and Senate—has occurred during several key congressional sessions (notably during the Clinton, Bush, Obama, and Trump administrations). Out of these occurrences, the lack of a veto-proof majority meant that hundreds of opposition bills were stifled before reaching the desk, while fewer than 120 total presidential vetoes were actually issued across the last 50 years, with Congress successfully overriding them in less than 10% of cases. Finally, for biotech stocks, this setup is broadly viewed as good news. Because the Democrats lack the super majorities required to override a presidential veto, aggressive drug-pricing regulations or sweeping healthcare overhauls are effectively dead on arrival, leaving the biotech sector to trade on its own fundamental clinical trial pipelines and M&A activity rather than political risk.  The broader health care sector might be more dicey as one piece of legislation Democrats have discussed prioritizing would be measures to reign in price increases and profit margins on prescription drugs.  This could hurt the larger cap health care companies such as Johnson & Johnson (JNJ) and Merck (MRK).  Our ratings disagree with the fears as both are rated 4 (Buy).

Speaking of sectors, take a look at our latest update of the sector year-to-date numbers.

There have been a few changes in ValuEngine forecast rating worthy of mention.  First is that SPYM, the ETF owning the S&P 500, has the lowest expense ratio.  It had been rated 4 (Buy) during the entire second half of the year.  Now, it has reverted to its normal state rating of 3 (Hold or Neutral).  This indicates that its concentration in large cap stocks is no longer as attractive to our forecast model than it had been.  On the other side of the ledger, StateStreet Select Sector SPDR Consumer Staples (XLP), while still below average with its 2 (sell) as its rating, has improved from its previous 1 rating (Strong Sell).  Target (TGT) is the highest rated Buy stock in the sector from a forecast price appreciation perspective.

From an asset allocation perspective, rotations from growth to value continue in the 4th quarter as shown in this updated matrix table of different asset class index ETFs.

There are quite a few ValuEngine rating changes here.  The biggest change is with Vanguard Growth ETF (VUG) falling from 5 to 3. Meanwhile, its complement at Vanguard on the value side (VTV) has risen from a 2 (Sell) to 3 (Hold).  We already mentioned that the S&P 500 ETF, SPYM, had fallen to 3.  Another change is that the SPDR S&P 400 MidCap ETF (SPMD) has been upgraded to 3 (Hold) after more than a year at 2 (Sell).  At least so far, QQQM is hanging in there with our best rating of 5.  While we remain optimistic about the market’s direction for the rest of November, we note that 3-year volatility is up at least 0.1% just from last week for all but 2 of these benchmark index ETFs.  That is rare as it generally takes more than high volatility in one week to change a standard deviation number calculated for a 156-week period.

One theme that we like to be persistent on is ETF expense ratios.  We use a number of ETFs in our measurement tables this season that are not the most frequently traded in their asset class. This is because buy-and-hold investors are generally not going to have much impact trading ETFs of this type but will be hurt by compounded fees over time than institutional traders, especially if they are buy-and-hold investors.  Therefore, in lieu of the more popular SPY, QQQ, IWM, MDY, EEM, GLD, IBIT and TLT, we track SPYM, QQQM, VTWO, SPMD, IEMG, GLD (most important to substitute with 10 basis point Expense Ratio vs. a 40 basis point Expense Ratio for owning the same amount of bullion), MSBT and SPTL.  We do not think investors should pay higher expenses for more popular ETFs because they didn’t know less expensive alternatives were available. We hope that investment advisors explain that to their retail clients and since sometimes education runs in the opposite direction, investors who read this should show this to their advisors.  Over time, the fees mount up.  In a market environment that most strategists are warning will not be as lucrative in the next 10 years as it was in the past 10 years, it makes sense not to further dissipate future returns by paying more.