North American Morning Briefing: AI Stocks Under Pressure as Investors Reassess Positions

Stock futures were mixed while oil fell as the post-election rotation

continued.

Investors are positioning for a slowdown in the AI build-out, knocking shares of chipmakers and data-center suppliers, and rotating into other parts of the market.

"Looking through the knee-jerk volatility, the outlook for hyperscalers may improve if they slow down spending without hurting growth from investments made so far, but the outlook for AI enablers and the broader AI complex has arguably become more challenging following the midterms," Swissquote said.

Oil prices rose but remained below $100 a barrel following a sharp selloff in the previous session as traders assessed the outlook for U.S.-Iran relations and recovering oil supplies from the Middle East.

Elsewhere, the Bank of England will announce its latest policy decision, with a quarter-point hike nailed on by markets.

Stocks to watch

Arm slipped about 3% premarket even as the chip company reported a 27% jump in revenue in its latest quarter.

Cava took a hit from the Cyclospora outbreak while profit slipped. Shares tumbled ahead of the bell.

Qualcomm's shares dropped nearly 10% premarket after it reported that a rise in automotive chip sales was offset by declining handset revenue.

Six Flags Entertainment, ConocoPhillips and Airbnb are among the companies expected to report earnings today.

Zillow reported a drop in traffic to its apps and sites in the midst of what it called "one of the toughest housing markets in a generation." The stock fell about 15% premarket.

Watch For:

U.S. Weekly Jobless Claims; U.S. Preliminary Productivity and Costs for 3Q

Today's Top Headlines/Must Reads:

- After Two Years of Unchecked Power, Trump Faces a Tough New Reality

- Anthropic's Ambition to Cure Diseases

- The Election Day Revolt That Threatens America's AI Boom

MARKET WRAPS Forex:

The dollar remained under pressure after falling to a one-month low Wednesday following a sharp fall in oil prices and the midterms results.

Sterling traded steady against the dollar and fell slightly versus the euro as investors awaited the BOE's policy decision.

Bonds:

Treasury yields fell across maturities after voters delivered a rebuke to President Trump and his party. Ten- and 30-year Treasury yields hit eight-week lows, then later recovered slightly but still traded lower on the day, according to Tradeweb.

Investors are viewing the U.S. midterm results as supportive for bonds and equities, as they raise the bar for additional fiscal expansion and introduce the possibility of more checks on policy, said BondBloxx Investment Management.

Energy:

Oil prices stayed below $100 as markets reckoned that the Democratic sweep in the U.S. midterms could increase pressure to end the war in the Middle East, CBA said.

Metals:

Gold futures rose to a two-week high, supported by a weaker dollar and declining Treasury yields after the Democratic sweep of Congress raised expectations of tighter fiscal discipline.

Copper

Copper prices edged lower in the aftermath of the U.S. midterm elections, as investors weighed the potential implications of a Democrat-controlled House for U.S. data-center investment, a key driver of demand for the industrial metal.

TODAY'S TOP HEADLINES

How the Data Center Backlash Could Play Into the Hands of Big Tech

A forced slowdown might be exactly what some AI companies need right now.

With Democrats taking not just the U.S. House and Senate, but also the governorships of states such as Texas, Ohio and Georgia, investors are now contemplating more roadblocks emerging for the construction of data centers.

Emirates Airline Profit Falls After Iran War Disrupts Air Traffic

Emirates Airline posted a sharp drop in first-half profit on Thursday after the Iran war disrupted flight routes and pushed up the price of jet fuel.

Dubai's flagship carrier reported profit after tax of $903 million for the six-month period ended Sept. 30, down 66% from the same period last year. The number of passengers carried during the first half was down 22% to 21.8 million from 27.8 million the previous year.

Toyota Raises Earnings Forecast After Higher Operating Profit

Toyota Motor raised its annual earnings forecast after reporting higher quarterly operating profit thanks to a weaker yen and cost cuts.

The Japanese carmaker said Thursday that net profit fell 19% from a year earlier to 759.4 billion yen, equivalent to $4.79 billion, for the three months ended September. That missed the estimate of -Yen779.6 billion in a poll of analysts by data provider Quick. The year-earlier bottom line was helped by higher nonoperating income.

Johnnie Walker Maker Diageo Says It is Making Progress in Tough U.S. Booze Market

Spirits group Diageo said it is moving in the right direction in the challenged American market, where some of its biggest labels continue to sell poorly.

The maker of Smirnoff vodka, Johnnie Walker whisky and George Clooney's Casamigos tequila said Thursday that U.S. sales fell 3.7% on year over the July-September period, the first quarter of the company's fiscal year. That reflected "continued market softness," Diageo said.

Treasury, European Bond Yields Tumble as Markets Lifted By U.S. Democrats' Victory

Yields on long-dated Treasurys, German Bunds and U.K. gilts fell to multiweek lows on Thursday following the Democrats' sweep in U.S. midterm elections and a consequent sharp fall in oil prices.

Bond markets cheered the prospect of fiscal restraint in the U.S., as the election result could lead to political gridlock, with a Republican President and Democrat-controlled Congress.

Oil Prices Rise but Stay Below $100 as Traders Weigh Iran Diplomacy, Supply Outlook

Oil prices rose Thursday but remained below $100 a barrel following a sharp selloff in the previous session as traders assessed the outlook for U.S.-Iran relations and recovering oil supplies from the Middle East.

Front-month Brent crude, the global oil benchmark, rose 1.3% to $95.85 a barrel in European trading. West Texas Intermediate, the U.S. benchmark, gained 0.3% to $87.36 a barrel.

The Election Day Revolt That Threatens America's AI Boom

The biggest names in America's artificial-intelligence boom gathered at the San Francisco Opera House on election night for a show hosted by Nvidia CEO Jensen Huang.

They were there to see "The Marriage of Figaro." But over wine and passed hors d'oeuvre, executives in tuxedos buzzed about an emerging threat to their industry, people in attendance said: election results were coming in overwhelmingly against the massive build-out of computing capacity that Silicon Valley is counting on to power its future.

Where Trump and the Dems Can Meet in the Middle

President Donald Trump and the Republican Party suffered a shellacking in the midterm elections on Tuesday as Democrats flipped enough seats in the Senate and the House of Representatives to secure healthy majorities in both chambers.

The Washington consensus is that Congress will be gridlocked for the rest of Trump's presidency. Investors on Wall Street, however, see compromise on the horizon.

Saudi Arabia Has No Easy Choices as It Weighs How to Combat Houthi Threat

DUBAI-After Yemen's Iran-backed Houthi rebels attacked Saudi Arabian oil tankers in the Red Sea and seized territory commanding the strategic Bab al-Mandeb chokepoint, the kingdom reached out to the group to see what it would take to arrive at a negotiated halt to the hostilities. The answer it got back: $51 billion.

The Houthis said that was the sum needed to cover the cost of years of Saudi strikes and a long blockade, people briefed on the discussions said. Other figures have come up since, the people said, but the message was clear: The price of an exit would be in the tens of billions of dollars. For good measure, the Houthis would want the kingdom to officially recognize the militants as the rulers of Yemen, effectively accepting an Iranian-armed adversary on its southern border.

Hong Kong Extends Jailed Activist Joshua Wong's Prison Term by 10 Years

HONG KONG-Joshua Wong, the imprisoned Hong Kong activist who was once the young face of the city's pro-democracy movement, was sentenced Thursday to a new, 10-year prison term for violating the city's National Security Law.

Wong, 30 years old, pleaded guilty in September to a charge of conspiracy to collude with foreign forces in calling for sanctions against Hong Kong and China. The security law, which Beijing imposed on Hong Kong in 2020, prohibits such calls for sanctions.

U.S. Was Unprepared for Drone Warfare, Pentagon's Emil Michael Says

The Pentagon's technology chief said the U.S. had been unprepared for the modern era of drone warfare and is racing to arm its troops with the autonomous systems that have come to dominate conflicts in Europe and the Middle East.

"We were caught flat-footed by the drone warfare in Ukraine and Russia," Emil Michael, the Defense Department's under secretary for research and engineering, said at the WSJ Tech conference Wednesday. "We weren't prepared because we just didn't imagine it. I just want to make sure we are imagining the next fight."

The Election Day Revolt That Threatens America's AI Boom

The biggest names in America's artificial-intelligence boom gathered at the San Francisco Opera House on election night for a show hosted by Nvidia CEO Jensen Huang.

They were there to see "The Marriage of Figaro." But over wine and passed hors d'oeuvre, executives in tuxedos buzzed about an emerging threat to their industry, people in attendance said: election results were coming in overwhelmingly against the massive build-out of computing capacity that Silicon Valley is counting on to power its future.

Write to priscila.barrera@wsj.com

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November 05, 2026 06:13 ET (11:13 GMT)

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