Weekly Market Commentary

Weekly Market Commentary for

November 2, 2026

Fed Hits the Pause Button.

U.S. Economy Continues to Grow.

Last week in U.S. markets, stocks associated with AI started showing concerns over the amount of debt companies are taking on, and how higher interest rates might derail their growth projections. By Friday's close, the tech-heavy Nasdaq was down 2% on the week. It was also Nasdaq's worst month in over a year.

As expected, the central bank left interest rates unchanged at their meeting last week. Two of the 12 committee members voted for a quarter-point increase. This leaves the Fed's benchmark rate between 3.75% - 4.%. Fed Chairman Kevin Warsh said market-based measures of inflation have moved lower even though energy prices remain high.

Within a day of the Fed's announcement on interest rates, third quarter GDP was released by the Commerce Department. The U.S. economy grew a robust 3.4% over the July-September period. The growth was driven by both business and consumers. It was the fastest pace in a year and higher than the 3.1% most economists had expected.

The chart below from the Commerce Department shows how much the U.S. economy grew in the third quarter.

The Markets and Economy

Economic activity slowed in October for the world's second-largest economy. China's purchasing manager's index fell to a reading of 49.3 from the previous month's reading of 50.1. Other measures of economic activity also fell for October.

For the first time since 1946, the U.S. national debt reached 100% of gross domestic product (GDP) for the fiscal year ending September 30. Also, the government's annual budget deficit of $2 trillion is now 6.2% of GDP.

Housing starts fell again in September. Home building activity also declined according to a recent Commerce Department's report.

The Conference Board reported that consumer confidence rose in October. Its index rose to a reading of 91.7 from September's reading of 84.2.

Plan premiums for the Affordable Care Act are expected to rise 13% in 2027, according to health-research nonprofit KFF.

Note: All figures exclude reinvested dividends (if any). All market close data sourced from the Wall Street Journal.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

You cannot invest directly in an index. Index returns do not include fees and consequently may not be representative of any specific investment.

This newsletter was prepared by David M. Kover. The views expressed are merely opinion and are subject to change without notice. The information is provided for educational and information purposes only and is not intended as investment advice or to predict future performance.

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