Insights

For one month, the market split in two. On one side, the technology stocks that have led this market sold off hard: the NASDAQ Composite fell 5.3% and ended October 9% below its peak. On the other side, almost everything else went up. Nine of eleven S&P 500 sectors finished higher, and bonds rallied as yields fell. The question is why that happened, and whether it matters.
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Democrats won control of both the House and the Senate in the November 3, 2026 midterms, ending unified Republican control of Washington. Democrats also won several governors’ races. The new Congress takes office in January 2027.
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Markets sent mixed signals in the third quarter. Interest rates rose, oil prices rose, and the Federal Reserve raised rates for the first time since 2023. Despite these headwinds, large cap stocks held up well on strong corporate earnings while small cap stocks declined under the pressure of higher interest rates. International equities were mixed with developing markets outperforming emerging markets.
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