Entering November, the US stock market is experiencing one of the busiest event windows of the year. The Federal Reserve's interest rate meeting has concluded, several tech giants have released their earnings reports, and the voting for midterm elections is about to end; next, the non-farm payrolls, CPI, and heavyweight earnings reports from companies like Nvidia will successively debut. With several variables overlapping, the question facing the market remains unchanged: can AI investment bring sufficient profit growth amid higher funding costs?

1. US Stock Valuation is High, More Sensitive to Earnings and Interest Rates

The valuation of the S&P 500 is at a high for the year, and U.S. Treasury yields remain elevated. According to a forward P/E ratio of 18.7 times on October 23, the earnings yield of the S&P 500 is approximately 5.35%, while the yield on ten-year U.S. Treasury bonds on the same day is 5.00%, resulting in a yield premium for stocks over U.S. Treasuries of only about 35 basis points. At this level, a slowdown in earnings growth or an increase in long-term interest rates could directly suppress valuations. The margin for error in buy-and-hold strategies is compressed, raising the importance of timing and position management in trading.

Figure: Major event nodes for the next month, data source: BIT

2. Earnings Side: Can AI Investment Translate into Revenue?

This season's earnings data appears strong on the surface, but is highly concentrated. FactSet data as of October 23 shows that the latest quarterly earnings for the S&P 500 grew by 29.5% year-on-year, with revenue increasing by 12.7%; according to estimates on October 16, excluding Micron and Nvidia, the earnings growth rate dropped from 29.0% to 20.0%. Among the companies that have released earnings reports, 83% exceeded earnings expectations, higher than the five-year average of 78%, but the total magnitude of outperformance is only 2.1%, significantly lower than the five-year average of 7.5% and the ten-year average of 8.0%.

Figure: This season's earnings exceeded expectations to a lesser extent than the five-year and ten-year averages | Data source: FactSet

Therefore, the key for future earnings reports lies in whether the guidance can prove that AI investment is being translated into revenue. Meta has provided an advanced reference: third-quarter revenue was approximately $64.6 billion, a year-on-year increase of 26%, higher than the market expectation of about $63.3 billion; SpaceX's revenue grew by 161% year-on-year, with capital expenditures for the quarter reaching $19.6 billion, while profits and cash flow remain to be observed. From October 28 to 29, Google, Microsoft, and Amazon will successively release earnings reports, with a focus on whether cloud business revenue can keep pace with capital expenditures; Nvidia's report, expected around November 18, will test whether chip demand can sustain. Nvidia's revenue for the last fiscal quarter was $96.2 billion, a year-on-year growth of 106%, with guidance for this fiscal quarter set at $108 billion, exceeding the market expectation of $104.2 billion at that time.

3. Cost Side: Interest Rate Pricing and Election Variables

The Federal Reserve has shifted from cutting interest rates to raising them. After three consecutive cuts from September to December 2025, the policy interest rate range is now lowered to 3.50% to 3.75%; on September 16, 2026, the Federal Reserve raised rates by 25 basis points to a range of 3.75% to 4.00%, with the dot plot indicating that the median interest rate at the end of 2026 and 2027 would be 4.125%. However, this round of inflationary pressure is largely due to supply-side factors such as oil prices, with core CPI still declining and not mirroring the sharp tightening of 2022.

On October 28, the Federal Open Market Committee voted 10 to 2 to maintain interest rates, with board members Lisa D. Cook and Beth M. Hammack advocating for a 25 basis point increase. Chairman Kevin Warsh did not provide clear guidance for the December meeting. According to CME FedWatch, the market's implied probability of a 25 basis point increase in December has risen to about 86%. The non-farm payrolls on November 6 and the CPI on November 10 will continue to influence the market's pricing for the December 9 interest rate meeting.

Figure: Changes in the upper limit of the federal funds rate target range since 2025 | Data source: Federal Reserve, MUFG Research

The impact of elections is more pronounced at the industry level. BlackRock statistics indicate that historically, the S&P 500 averages a 7.5% increase in midterm election years, lower than the 12.4% in non-midterm election years; however, the average return in the six months following elections is 14.1%, significantly higher than the 5.7% in non-election years during the same period. Citi's report from September 23 argues that the semiconductor and AI sectors are particularly sensitive to subsidies, export controls, and AI regulations. Power consumption for data centers has also become a local issue, with proposals to halt data center construction appearing in Ohio, and Texas conducting related audits that may impact the pace of capital expenditure from cloud providers. The crypto market structure bill (CLARITY Act) has passed the House, but a procedural vote in the Senate in mid-September did not succeed, leaving the direction of stablecoin regulation uncertain.

4. Cross-Market Continuous Pricing, Trading Methods Need to Keep Up with Nodes

Another characteristic of this round of events is that price reactions are no longer confined to regular trading hours for US stocks. Major technology companies typically release earnings reports after the US market closes, and the initial reactions appear in after-hours trading and crypto asset prices, subsequently translating to the Hong Kong stock market the next day; non-farm payrolls and CPI are released one hour before the US stock market opens, reflecting first in pre-market and crypto markets. Market closure arrangements will further change reaction pathways: if Alibaba releases its earnings report around November 24 before the US market opens, the Hong Kong stock market will take over on the 25th, while the US market will be closed on the 26th due to Thanksgiving, meaning that only the Hong Kong stock market and crypto markets will continue to absorb the earnings report that day.

For investors who need to track multiple markets simultaneously, whether their accounts can cover these markets directly affects their efficiency in responding to nodes. Taking BIT Securities as an example, the platform started with crypto asset services, launched US stock trading in February 2026, and opened Hong Kong stock trading in October, allowing users to trade US stocks, Hong Kong stocks, and crypto assets within the same account, while also enabling direct stock trading using stablecoins, allowing for position adjustments around nodes without needing to transfer funds across platforms. For companies like Alibaba that are listed in both locations, investors can also check the two locations' prices within the same account. Surrounding this event window, BIT Securities launched a limited-time earnings season theme activity to help users engage with the interplay between the US stock, Hong Kong stock, and crypto markets based on specific earnings and data nodes.

Conclusion

In the coming month, the answers on the earnings side concentrate on the earnings reports of tech giants, while those on the funding cost side will depend on the non-farm payroll and CPI data at the beginning of November, with elections mainly impacting industry differentiation. Against a backdrop of thin stock-bond yield premiums, for earnings to outpace funding costs, AI investment returns need to be confirmed by guidance, and inflation and employment data should no longer heighten interest rate hike expectations. Any shortfall in either expectation could pressure valuations, with effects gradually transmitting to US stocks, Hong Kong stocks, and crypto asset prices.

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