The US economy this week is a split picture: a strong October jobs report landed hours after Democrats won the midterms on the affordability message, and AI-driven jitters have tested whether the broader rally still holds.
The headlines, in order of what to know:
- Jobs are still solid. Friday's report showed employers adding 165,000 jobs in October and unemployment ticking down to 4.1% — both ahead of expectations and giving the White House something to lean on [pbs].
- Tech just had its ugliest stretch in months. The Nasdaq fell 5.5% on Thursday alone — its biggest one-day drop since the "Liberation Day" selloff in April 2025 — wiping roughly $2.5 trillion off the index. The damage is concentrated in AI-exposed names, with credit-default swaps on the "neocloud" firm CoreWeave crossing into distressed territory [investing-2].
- A December rate hike is now the base case. With the labour market still tight, traders put the odds of a 25 bp Fed move at over 80% — taking the policy rate to 4.00–4.25%. Tomorrow's CPI print is the swing factor [investing].
- Fiscal pressure keeps building. Interest on the national debt is now over $1 trillion a year and exceeds defence spending. The Social Security trust fund could be exhausted in as little as six years absent changes [pbs].
- Outside the US: Oil has eased on tentative US–Iran diplomacy — Trump told reporters over the weekend that fresh strikes were "highly unlikely" while talks continue. China's October CPI came in softer than expected at 0.7%, while producer prices ran hot at 5.7% [financialoracle].
What to watch this week: tomorrow's CPI print, earnings from CoreWeave, Applied Materials and Cisco (as proxies for whether the AI selloff extends or stabilises), and the first signals from the new Democratic Congress on how aggressively to push an affordability agenda [investing-3].
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Want me to go deeper on any single thread — the AI unwind, the December Fed decision, or the fiscal pressures?