Stocks Recover From Monday’s Bearish Reversal, Even as Democrats Gain Election Day Momentum: Nov. 3, 2026

Stocks are recovering from yesterday’s bearish afternoon reversal even as the odds of a blue sweep have risen throughout the past few hours. The fact that equities are advancing in light of the Democrats being likely to win majority control across both chambers of Congress signals that a near-term bottom could be behind us, since an overall flip was the most feared outcome. Indeed, worries that a new legislative branch would lift oversight and tighten regulations on AI technologies were part of the reasoning to drop exposures of semiconductors, mag7 constituents and tech as a whole, which are precisely the areas of the market that are outperforming today as the Nasdaq 100 climbs out of correction territory. Sectoral participation is split, though, with about half of the 11 principal sectors and their subcategories appreciating alongside the S&P 500 and the Russell 2000, but the Dow Jones Industrial Average is suffering modest losses partially due to a lift in yields. The jump in interest rates arrives as hotter-than-expected labor data featuring a four-month high in job openings quelled slowdown fears. In response to the healthy employment figures, the Treasury curve is climbing in bear-steepening fashion led by duration, while lighter crude oil costs stemming from hopes that US-Iran peace negotiations progress are softening the blow to fixed income assets to an extent. Elsewhere, cryptocurrencies are rising, commodities are falling, volatility protection instruments are catching bids against the backdrop of investors dropping hedges and turning increasingly offensive, while the greenback is generally flat.

JOLTS Jump To Highest Since May

A strong economic cycle has firms craving for workers to expand capacity and lift output, according to this morning’s Job Openings and Labor Turnover Survey (JOLTS). For-hire signs jumped to a four-month high of 7.523 million, ahead of the 7.1 million expected and the 7.1 million from August. The following categories experienced the stated increases in vacancies:

• Leisure/hospitality, 163k
• Construction, 49k
• Retail, 40k
• Information, 24k

Health care and transportation also contributed to the increase at modest levels. Conversely, manufacturing, professional business services, wholesale trade, other services, government and financial activities experienced m/m declines of 34k, 30k, 28k, 25k, 24k and 12k.

Economic Data To Turn Increasingly Influential

Economic data is poised to turn increasingly influential following the midterm elections, which at this point is largely anticipated to feature a blue sweep, and investors are likely to cheer healthy labor data throughout the week. The recent pain in stocks could very well be behind us, as participants realize that a split government isn’t the worst thing in the world for corporate earnings, which could support a rebound in valuations and sentiment. And from a historical perspective, markets do fine under democrats and republicans, as the dems have tended to shift to the center from the left after it wins seats, and that incoming pragmatism can quell fears of heavy regulations and tax increases that may not come to fruition. Additionally, prospects of harsher oversight for AI may be overblown, as the cyclical buoyancy of the modern technology has raised business activity in communities across the country while delivering monumental capital expenditures and employing large amounts of workers, progress that politicians would probably not want to reverse.

International Roundup

Reserve Bank of Australia Hikes

The Reserve Bank of Australia, in a widely expected action, hiked its official interest rate 25 basis points to 4.85% with three of the nine voting members opposing the decision. In justifying the hike, which places the benchmark at the highest level since 2008, policymakers said data collected during the past month show that inflation is broad based. Capacity pressures have intensified and higher fuel costs are being passed through to the prices of goods and services. Participants in the Interactive Brokers Prediction Markets placed a 93% chance that the organization would increase its benchmark. Just last week, the Australian Bureau of Statistics reported that September inflation as measured by the Consumer Price Index, hit 4.3% year over year (y/y,) a considerable jump from 4% in August. The transport segment, which is highly sensitive to fuel costs, led the price pressure with an 8.7% ascent. After deciding to hike last night, the central bank said it now expects inflation to remain above 3% for the coming year and that the economy faces the risk of inflation expectations firming in the coming months.

Hong Kong GDP Growth Accelerates

Solid domestic demand and growing exports of semiconductors and other AI related items during the third helped push Hong Kong’s gross domestic product up 1.9% quarter over quarter (q/q) and 5.2% y/y according to preliminary data from the special administrative region’s Census and Statistics Department. In the three-month period that ended in June, Hong Kong’s economy contracted 0.6% but was up 4.3% when compared to the same period in 2025. Private consumption was up 2.8% y/y after climbing 2.9% in the second quarter while government outlays grew 1.7% following no change in the preceding period. Capital formation was also strong, increasing 7.3%, nearly double the rate of April through June period. Trade was an additional strong point. Goods exports accelerated from the second-quarter y/y expansion of 28.9% to 30.4% while the growth rate of imports went from 29.3% to 29.9%. Services exports also improved, growing 4.3% y/y, a 1.1% lift from the preceding period. Services purchased from foreign sources, meanwhile, climbed 5.6% y/y after the 3.1% ascent in the second quarter. 

And Retail Sales Pick Up

Retail sales in Hong Kong grew 6.4% y/y in September after climbing only 5.6% in the preceding month, according to the Census and Statistics Department. When adjusting for price changes, sales climbed 3.9% y/y. Sales were up 2.9% y/y in the preceding month. Based on the value of transactions, consumers spent 20.3% more on jewelry, watches, clocks and valuable gifts. Spending on consumer durable goods, such as cars, furniture and certain electrical goods were also noteworthy with cash register activity climbing 20.6%.

South Korea Price Pressures Ease Marginally

South Korea’s CPI depicted prices climbing 2.8% and 0.2% y/y and m/m in October. The print was more benign than the economist consensus expectations for a repeat of September’s 2.9% and 0.3% results. The core version of the index, which eliminates volatile prices of fuel and food, meanwhile, rose 2.8% y/y and 0.4% m/m.