Alphabet shares fell more than 12% on Thursday, Oct. 29, after the company reported cash burn and disappointing revenue. Now the midterms and earnings arrive together, with the October jobs report landing in the same five days, according to Reuters’ week-ahead preview.
If your 401(k) leans on big tech, the stakes are personal. Another round of earnings misses could repeat the Alphabet pain across the index funds that hold these names. A weak jobs number would add a second worry, because it would suggest the AI boom isn’t spreading to workers or the wider economy. Either one could drag your balance down fast.
Why the market is already jumpy before election week earnings
The setup is rough. Alphabet’s slide, which Reuters reports, dragged on the major indexes.
Caterpillar fell 9% the same day because it kept its annual sales growth forecast, even with strong data-center demand for its power equipment. (Standing pat was apparently not the move.)
Reuters also notes that Amazon and Intel posted results that sent their shares sharply lower. The common thread is worry about how hyperscalers like Alphabet pay for their data-center buildouts. The AI trade has carried much of this bull market, so that worry matters to anyone with an index fund. Our look at what the Nasdaq’s AI selloff means for your 401(k) shows how the damage reaches ordinary accounts.
“The market seems a bit troubled to me, and I think that really stems from the AI fears that seem to be persistent, if not building,” Marta Norton, chief investment strategist at Empower, told Reuters.
More than 100 S&P 500 companies report in five days
The calendar below uses the dates in the Reuters preview and a broker calendar:
- Monday, Nov. 2: Apple reports after the close. Its shares are up 28% so far this year.
- Tuesday, Nov. 3: Election Day. Markets keep normal hours.
- Wednesday, Nov. 4: Analysts expect the Treasury’s quarterly refunding.
- Friday, Nov. 6: The October jobs report.
The reporting list includes McDonald’s, Amgen and ConocoPhillips. AMD and Palantir are also among the tech and AI names on deck. With about half of S&P 500 companies reported, third-quarter earnings were on pace to rise 31% from a year ago, per LSEG data cited by Reuters. That makes election week earnings unusually high-stakes.
That is a big number, and it is exactly the problem. “The earnings bar is very high,” Chris Galipeau, head market strategist at the Franklin Templeton Institute, told Reuters.
Beating a low bar earns a shrug. Missing a high one cost Alphabet 12% in a day.
What a soft jobs report would mean for your 401(k)
The economy looks strong on paper. Third-quarter GDP grew at its fastest pace in a year, driven by consumer spending and business AI investment, Reuters says. The Fed also held rates steady this week while upgrading its view of the economy.
The hiring side tells a different story. September payrolls rose just 29,000, below expectations, and the unemployment rate ticked up to 4.2% from 4.1%. “I think the missing piece of this strong economic growth narrative is the lack of job growth,” Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments, told Reuters.
Friday’s report lands in the middle of the midterms and earnings crunch. Another soft payroll number would be a warning for your 401(k). It would suggest that AI spending is lifting stock prices and GDP without lifting paychecks. Stocks priced for perfection tend to fall hard when that story cracks.
What the midterm elections and earnings could change
Reuters says the elections “could determine the outlook for AI regulation.” Its separate “Take Five” preview says most observers expect Democrats to win the House, while control of the Senate is less certain. Investors are also watching fiscal spending and scrutiny of banks and crypto firms. Our guide to midterm election stock market history covers what 150 years say about the wait.
Voters are also feeling the squeeze from prices, as September’s 3.7% inflation reading showed.
Reuters also flags a local angle that hits home: investors are bracing for more pushback on data centers over energy costs and environmental impact. If a data center is planned near you, that fight is the AI trade’s other half. It shows up on your power bill, not your brokerage statement. That makes it one more place where midterms and corporate results collide.
What midterms and earnings mean for your money
Reuters’ preview says markets price about an 80% chance of a Fed rate hike in December. That is a market estimate, not a Fed promise, and the central bank’s next decision is Dec. 9. A hike would keep mortgage, car and credit card rates high.
Chris Galipeau offers the calmer view. “The market is much more broad than people generally want to give it credit for,” he told Reuters. The report notes that other parts of the market have picked up the slack as AI stocks struggled. Diversified investors have cushion that concentrated ones don’t.
So what should you do? If big tech makes up a huge share of your 401(k), check your allocation this weekend and rebalance if one slice has grown too large. If you’re diversified, hold steady and skip the panic selling. Then watch Friday’s jobs report, October CPI on Tuesday, Nov. 10, and the Fed in December.
