A wild week for markets, in five moves

The week in five moves

1. The election (3–4 November). The Associated Press projected that Democrats will control both chambers of Congress from January (our story). Divided government tends to limit large tax and spending changes; investors began weighing what that means for deficits and for scrutiny of technology companies.

2. The chip rout (5 November). The S&P 500 fell 4.4%, its worst day since April 2025, and the semiconductor index lost 12.3% (our story). On Friday, big chip stocks won back about a third of those losses on average, and the Nasdaq rose 1.1%. Technology shares still fell about 7% on the week.

3. Oil's round trip. Brent fell more than 8% on Wednesday on hopes of a US–Iran deal, then rebounded towards $100 after new tanker attacks in the Strait of Hormuz, ending the week down about 12% (our story). Energy shares fell about 11% on the week.

4. Four rate rises. Australia, Sweden, the UK and the Czech Republic all raised rates, as the oil and supply shock threatens to make inflation last (our story).

5. A strong jobs report (6 November). US employers added 165,000 jobs in October and unemployment fell to 4.1% (our story), keeping a Fed rate rise in December on the table.

The mechanism: bonds caught between fear and growth

US bond yields show two forces pulling against each other. On Thursday, investors fled shares for the safety of Treasuries; buying pushed bond prices up and the 10-year yield down to about 4.84%. On Friday, the strong jobs report raised the chance of a Fed rate rise, and the yield rose to about 4.86%. When fear dominates, yields fall; when growth and inflation dominate, they rise. This week, both took a turn.

The VIX, a measure of how much volatility investors expect, jumped to 28 on Thursday and eased to 25.6 on Friday, still well above its level at the start of the week.

Where it sits in the chain

This is Link 4, financial markets, reacting to news from every other link: politics, oil, central banks and the job market.

What to watch next week

• US inflation for October, and whether it confirms or eases the case for a Fed rise.
• Tanker traffic through Hormuz and any formal US–Iran talks.
• Whether chip stocks keep recovering or slide again.