Last Week on Wall Street - Week of November 2nd

Last Week on Wall Street

The Election Came for the AI Trade

Voters spent Tuesday saying no to data centers, the market spent Thursday doing the math, and Friday's jobs report turned up to remind everyone the Fed is still in the room.

Rough week. The S&P 500 gave back 2.7%, its worst since June, and the Nasdaq lost 3.2% in a fourth straight losing week, which leaves it in correction territory, roughly 10% below where it stood a month ago. Friday was a real bounce, chips rallied hard and both indexes closed green, but it only trimmed the damage.

Tuesday's midterms handed Democrats both chambers. On the same evening, voters in ten states went through referendum after referendum rejecting data centers in their own towns. Wall Street took about 36 hours to connect those two facts, and when it did, the selling was fast and broad: Thursday was the worst session for the S&P since the April 2025 tariff crash, and semiconductors took the heaviest damage. The AI buildout has been the biggest earnings story of the past two years. As of this week it is also a political one.

Friday morning the labor market turned in a number nobody had penciled in, and the conversation moved again, this time to whether the Fed tightens in December. Energy, for its part, had the weakest week of any sector as crude kept sliding. So the tape goes into next week carrying two questions it did not have on Monday: how much of the AI capital spending plan survives contact with local zoning boards, and whether a labor market this firm gives the Fed a reason to move. Neither one gets settled quickly.

America Voted on Data Centers, and Almost Every Town Said No

The key takeaway, forty-one data center measures went before voters across ten states on Tuesday, and forty of them constrained or banned development. The lone exception was a North Dakota town of fewer than 900 people. The AI buildout has spent two years as a capital spending story; it is now a zoning story.

Ohio carried twenty-one of the measures on its own, and the pattern repeated almost without variation: outright bans, size caps, moratoriums, new zoning hurdles. Voters in Piqua and Urbana recalled city officials over data centers and banned the facilities the same day. A mayor in Yukon, Oklahoma and a council member in Mason, Michigan also lost recall elections on the issue. By one count there were as many as thirty data-center recall attempts across the country this year.

This was not a party-line result. The Ohio measures were driven largely by the bipartisan group Conserve Ohio, and several cities in Republican-leaning Madison County, Illinois turned down pro-data-center initiatives by double-digit margins. Candidates picked the theme up in both directions, including in Texas, Kansas and South Carolina, where moratorium proposals featured in winning campaigns. An NBC exit poll found 56% of respondents called AI and data centers a crucial or major factor in their congressional vote. Goldman Sachs estimates roughly 45% of planned U.S. data center capacity now sits somewhere restrictions are possible, and that is the figure the market repriced on Thursday.

SOURCE: Christian Science Monitor: Voters send a message on data centers →

The Labor Market Picked a Bad Week to Look This Good

The key takeaway, the Street expected something near 59,000 jobs. October printed 165,000, with August and September revised up by 84,000 between them. On an ordinary Friday that is a clean, encouraging number. Arriving the morning after a 4.4% drop, it mostly put a December rate hike back on the table.

The Bureau of Labor Statistics reported 165,000 nonfarm payroll additions in October, against a prior twelve-month average of 48,000. The unemployment rate was 4.1%. Professional and business services added 70,000, health care 42,000, transportation and warehousing 25,000, and manufacturing 19,000, which is about as broad a distribution as these reports produce. The revisions did as much work as the headline: August moved up 53,000 to 186,000, and September up 31,000 to 60,000.

The wage line is where it gets complicated. Average hourly earnings rose 0.4% on the month to $38.00, and 3.1% over the year. The annual pace is contained; the monthly pace is not what a central bank wants to see while it is deciding whether to tighten. Futures markets moved toward a December hike within minutes of the release, and the rest of the morning was spent arguing over whether one strong month settles anything. The bond market stayed calm about it: the 10-year finished the week a touch lower in yield, which is an odd look for a week that raised the odds of a hike, and mostly reflects how much money came out of equities on Thursday.

SOURCE: BLS: The Employment Situation, October 2026 →

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