Week In Review: Wall Street Had a Picnic. Lightning Found the Tallest Trees.

Last week, Big Tech spent the candy money on decorations (catch up here). This week, Wall Street packed a picnic basket for Election Day, spread the blanket out Wednesday, and had the best afternoon in the park it’s had in a year and a half. Thursday, the sky went green. Lightning does one thing very reliably: it hits the tallest thing around. This year, the tallest things in the park were made of computer chips.

Friday Oct 30 close to Friday Nov 6 close

Rows marked "fund" hold a basket of stocks, so watch the move, not the price. The VIX measures investor nervousness; it closed Friday at 25.64 after a 70% jump on Thursday alone. Technology (fund: XLK) was second-worst, down 8.23%. Communication won because Alphabet and Meta mostly stayed out of the storm, and Alphabet already owns its own data centers.

The $1,000 test: Did you have $1,000 in the S&P 500 last Friday? You have about $973 now. In the Nasdaq? About $966. In Micron? About $780, which is a very expensive picnic. In Amazon? About $1,079. In the gold fund? About $1,047.

Election night went one direction. Democrats won control of both the House and the Senate on Tuesday, with the Senate count at 54 seats and two races still being counted as of Friday. Republicans keep the White House. That's what Wall Street calls a split government, and what everyone else calls "nothing passes for two years."

The market heard "nothing passes" and packed a cooler. Overnight, bets on where stocks would open (futures) fell hard, then climbed back. By Wednesday's close, the Dow was up 1,569 points, or 3.03%. That was its best day after a midterm in 44 years and its best day of any kind since April 2025 (CNBC). The S&P 500 rose 1.58%. We covered the party live in Thursday's edition.

The Dow only tracks 30 big companies, and a handful carried the basket. Microsoft rose 6.68%, Amazon 6.12%, Apple 5.31%, and McDonald's 6.53% after its own results beat forecasts. The fear gauge fell 20% to 16.61, its calmest close of the week. Somebody set out lawn chairs.

Wall Street didn't vote for a party. It voted for a long, quiet nap in the shade, and for about 24 hours it got one.

Here's what the picnic missed. On the same ballot, voters said no to new AI data centers in 40 of 41 local measures. Data centers are the giant warehouses full of computers that run AI. They drink electricity and water; they raise the neighbors' power bills, and it turns out the neighbors vote. After the results, Sen. Bernie Sanders called for a "national data center moratorium," which is Washington for "stop building them" (Quartz, CNBC).

That's a call, not a law. The new Congress doesn't even sit until January. Nobody has written a bill. But the stock market did what a crowd does when it sees a flash on the horizon: it ran first and checked the radar later.

Thursday, the Philadelphia Semiconductor Index (the SOX, a basket of 30 big chip stocks) fell 12.25%, its worst day since March 2020, when Covid shut down the world. Micron, which makes the memory chips AI servers gobble up, fell 17.46%. AMD fell about 17%. Nvidia fell 9.26%. The S&P 500 fell 4.36% and the Nasdaq 5.52%, the worst day for both since April 2025. The Dow gave back 1,833 points, more than its whole Wednesday party. We covered the stampede in Friday's edition.

The cruel part: AMD had just posted a great quarter. Tuesday night, it reported $13.4 billion in sales against about $13.1 billion expected, with a forecast of about $17 billion for this quarter against $16.2 billion expected. Wednesday's edition called it paying the rent early. CEO Lisa Su said the market "can sometimes be a little bit short-sighted" (Yahoo Finance). She said that on a day her stock fell 17%. Lightning doesn't read the report card.

Friday, chips got some of it back: the SOX rose 4.21%, AMD 11.04%, Micron 5.12%, Nvidia 2.78%. For the week, the SOX still finished down 12.15%, Micron down 22.01%, AMD down 11.05%, Nvidia down 8.80%.

And the trees with lightning rods? Amazon finished the week up 7.88% and Microsoft up 1.67%. They already own huge fleets of data centers. If nobody new can get a permit, the guys who already built theirs look a lot better. Once your house is up, you suddenly become a big fan of zoning.

Lightning doesn't care how good your quarter was. It cares how tall you are.

Friday morning, the sun came out. Employers added 165,000 jobs in October, against 65,000 expected by economists polled by LSEG. Unemployment fell to 4.1% from 4.2%. The government also went back and found 84,000 more jobs in August and September than it first counted. Factories added 19,000, versus the expected 5,000. The "the economy is falling apart" crowd had to fold up its blanket.

Paychecks grew 3.1% from a year ago. Prices grew 3.7% over the same year, as of the last inflation report in September. So the average raise still isn't keeping up with the grocery bill, which is the kind of strong economy that feels great in a headline and less great at the register.

Here's the catch. The Fed raises interest rates to cool things down when the economy runs hot, and prices keep climbing. A strong jobs report gives it a reason, not an excuse. Goldman Sachs Asset Management's Lindsay Rosner said the numbers "removed the traffic light at the December intersection for the Fed". CME FedWatch, which reads the odds from bond-market bets, showed about a 77% chance of a December rate hike Friday morning, up from about 67% a week earlier. Polymarket, a site where people bet real money on events, had it at 76.5% Friday evening.

The 10-year Treasury rate, which steers mortgage rates, rose to 4.86% Friday from 4.84% Thursday. It still finished the week lower, down from 4.94%, because Thursday's panic sent everyone running to the safest shelter around.

Good news for your job is bad news for your rate. That's the deal this year, and nobody asked us to sign it.

Oil started the week betting on war and ended it betting on peace, and neither one actually happened. Monday, Qatar said the U.S. and Iran were reviewing proposals through mediators, and oil fell about 7% (we caught that one Tuesday). Wednesday, investors decided a Democratic Congress means more pressure to end the Iran war, and Brent, the world oil price, fell another 8.7%.

For the week, Brent settled Friday at $98.32 a barrel, down about 13% from $113.43 last Friday, and U.S. crude settled at $90.83, down about 13% too (EnergyNow). A quick note: the world price "rolled" to a new contract month last week, so we're comparing the same January contract on both Fridays. The oil funds tell the same story: the Brent fund fell 12.84%, and the U.S. oil fund fell 12.10%. Energy stocks were the worst sector, down 12.00%.

What didn't change? The shooting. Iran said three more tankers were damaged in the Strait of Hormuz on Thursday, two by naval mines. Qatar says both sides are still reviewing proposals, and Iran has reportedly floated a plan to reopen the strait in exchange for sanctions relief (Outlook India). No deal has been announced, let alone signed. Polymarket gives only about a 9.5% chance that Hormuz traffic is back to normal by year's end.

Across the Atlantic, the Bank of England raised its main rate to 4% from 3.75% on Thursday, its first hike since 2023, by an 8-to-1 vote. The reason: it expects energy prices to keep British inflation high while the war drags on.

Oil fell 13% on a handshake nobody saw, while the tankers were still on fire.

Monday, chipmaker Marvell agreed to buy Lumentum, which makes the laser parts that move data between AI servers, in an all-stock deal valued at about $115 billion. All-stock means Marvell pays with its own shares: 4.5 Marvell shares for every Lumentum share, worth about $1,132 a share when the deal was announced.

Then the storm rolled in. Marvell finished the week down 28.11%. At Friday's close, 4.5 Marvell shares were worth about $635. Lumentum fell 35.94%. Normally, the company getting bought goes up. Here, the buyer and the bought held hands and walked into the lightning together. The deal isn't expected to close until the first half of 2028, so there's plenty of weather left.

Polymarket is a site where people bet real money on events. Five of its biggest economy markets by volume, pulled Friday, Nov 6 around 6:15 PM CT:

The gold fund (GLD) rose 4.71% this week, to $372.52. Most of it came Wednesday, up 3.68%, on the day the Dow threw its party. Somebody at every picnic brings an umbrella even when it's sunny, and on Thursday, they looked like a genius.

Now the humbling part. Over the full year, the gold fund is up only about 1.1% from $368.31 a year ago. A plain three-month Treasury bill, basically a government IOU, pays about 4.2% a year right now. So grandma's coins had a great week and a sleepy year. Gold is the umbrella: wonderful in a storm, dead weight on the other 360 days.

The average 30-year mortgage rate fell to 7.18% this week from 7.24%, per Freddie Mac. The 15-year fell to 6.57% from 6.60%. A year ago, the 30-year was 6.22%.

What that means for actual humans: on a $400,000 loan, this week's dip saves about $16 a month. That's a pizza. Compared with a year ago, the same loan costs about $255 more per month, roughly $2,710 instead of $2,455. That's a car payment you didn't sign up for.

And with Friday's jobs report pushing the 10-year rate back up, next week's mortgage number may not keep falling. October's existing home sales come out Thursday.

Regular people felt better. Rich people felt worse. The University of Michigan's consumer sentiment survey rose to 51 in early November from 48, against 48 expected, its highest since August. Expected inflation for the next year eased to 4.3% from 4.7%. But sentiment fell 5% among people with the biggest stock portfolios. Turns out you feel a 5% Nasdaq drop more when you have a Nasdaq.

Everyday investors ran, too. Vanda Research said regular traders had their biggest day of net selling since March 17, 2020, and called it "a total capitulation". That's a fancy way of saying people stopped holding the door and just ran.

The headlines got gloomy where it hurt. The tone of news stories on a scale where 1 is sunshine and 0 is neutral. Micron's headlines went from 0.82 Wednesday to 0.35 Friday. Headlines about the S&P 500 fund stayed sunny all week, between 0.83 and 0.94, because apparently nobody told the reporters covering the index that it fell 4% on Thursday.

Monday's appetizer was Oracle asking for a $20 billion side of bread, served with a Marvell merger that went cold before it reached the table. Tuesday, the whole country voted on the menu. Wednesday's main course was a picnic: Dow potato salad, Microsoft burgers, a 3% toast to gridlock, and oil sent home early. Thursday, dessert got hit by lightning. The chip cake melted, Micron's slice fell 17% off the plate, and AMD's report card blew into the lake. Friday's coffee was strong: 165,000 jobs, extra hot, with a side of rate hike. The wine was Brent at $98, with notes of a peace treaty nobody signed. In the corner, gold and Amazon split a dry umbrella and asked for the check.

If you own a plain index fund, you lost about $27 per $1,000 this week. That stings, but it isn't a catastrophe, and most of the damage was in one neighborhood. Chip stocks fell 12%. Banks, real estate, shopping, and communication companies all finished higher. If your 401(k) leans on the biggest tech names, you felt it more. If it's spread out, you mostly got wet.

The real change is that AI now has a weather problem it didn't have a month ago. It's not demand. AMD's numbers prove people still want the chips. It's permission: towns, power companies and, starting in January, a Congress that campaigned on the power bill. Meanwhile, the jobs market is strong enough that the Fed has no reason to stop raising rates, which means borrowing doesn't get cheaper any time soon.

The one question that decides next week: when the October inflation report lands Tuesday morning, does it give the Fed one more reason to hike in December, or does it let everyone fold up the umbrella?

People say lightning never strikes the same place twice. People are wrong. Tall things get hit again and again. Before the next storm, check how tall your portfolio is.

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