Weekly Market Update November 9, 2026

The U.S. economy expanded by an estimated annualized rate of 3.4% in the third quarter. The advance was powered by a healthy 3.8% jump in personal consumption, as well as by astronomical spending on artificial intelligence (AI) infrastructure. The latter made up nearly a full percentage point of the gross domestic product (GDP) advance. 

The Federal Reserve held the benchmark short-term interest rate steady last month at 3.75%-4.00%. The decision, though, did come with some dissenters among voting members who are worried that inflation is still running too high. On point, the September Personal Consumption Expenditures (PCE) Price Index and core PCE (excludes the more-volatile food and energy components) increased 3.6% and 3.1% year over year, respectively. 

So, what was the central bank’s reason for not raising interest rates? Some Fed members, including Chairman Kevin Warsh, might not want to risk either slowing the economy or putting the health of the labor market, which remains near full employment, at risk. Those same Fed officials also believe that the reacceleration in inflation this year is the result of a supply shortage (mostly due to war-related oil disruptions) and thus another interest rate hike may do damage to demand, without fixing the current supply-side issues. 

Corporate America continues to thrive. With about two-thirds of the S&P 500 companies having reported third-quarter results as of press time, profit growth was averaging around 30%. If maintained, it would mark the third-straight quarter that growth exceeded 25%. This provides support for stocks at a time when obstacles exist, including worries about stubborn inflation, geopolitical turmoil, and the possible ramifications of issuing too much corporate debt to fund AI. 

Next year will bring change on Capitol Hill, as the Democratic Party has won control of Congress. Historically, Wall Street has liked a divided government because it prevents sweeping legislative changes. The reduced uncertainty is often good for stocks. 

Conclusion: Stock market volatility has picked up. In this environment, we recommend maintaining a well-diversified portfolio led by stocks of high-quality companies with a history of delivering steady profit and cash flow growth. 

Source: Valueline.com