The University of Michigan’s consumer sentiment index rose to 51.0 in early November 2026, up from 48.0 in October and comfortably above market expectations of 48.0. Modest gains across several components, including expectations for personal finances and business conditions, were driven primarily by independent voters. Sentiment improved among lower- and middle-wealth households but fell 5% among consumers with the largest stock portfolios, following a relatively turbulent period in equity markets. Consumer comments also revealed growing concerns about a potential AI bubble, although these remained secondary to persistent cost-of-living pressures. Despite November’s improvement, overall sentiment remains 10% below its February level. Inflation expectations offered a more encouraging signal: year-ahead expectations declined to 4.3% from 4.7% in October, while long-run expectations edged down to 3.4% from 3.5%.

Crude oil rose to around $91 a barrel on Friday, erasing earlier losses as investors weighed the risk of renewed US-Iran military escalation against prospects for a diplomatic breakthrough. Investors are assessing whether the end of the US midterm elections could pave the way for renewed action against Iran, potentially threatening Middle East oil supplies. Iran reported attacks on oil tankers in the Strait of Hormuz on Thursday, while UKMTO data indicated vessel attacks were continuing at a near-record rate. Hopes for a diplomatic resolution emerged after Iran reportedly sent a nuclear proposal to Washington through Qatar. Significant obstacles remain over Iran’s nuclear programme, with the US demanding that Iran give up its nuclear capabilities. Meanwhile, Iran demands the lifting of the US naval blockade, sanctions relief and the release of frozen assets before fully reopening the Strait of Hormuz. Crude plunged nearly 12% for the week.

The S&P 500 rose 0.3% and the Nasdaq gained 1.3% on Friday, while the Dow shed 237 points. The moves followed a sharp sell-off in the previous session, the worst one-day losses since April 2025, that pushed the Nasdaq into correction territory. Concerns that Democratic midterm wins could lead to tighter AI-industry regulation and lower sector investment drove investors out of tech and AI-related stocks, triggering a broader risk-off mood. However, a chipmaker rebound propped up the market as dip buyers emerged, leading technology stocks to a sharp recovery. Nvidia gained 2.8%, Micron 5.1%, AMD 11%, SpaceX 8.6%, Tesla 4.2%, Intel 7.7%, and Lam Research 8.2%. Among hyperscalers, Alphabet and Meta each gained 0.8%. On the data front, nonfarm payrolls topped estimates and the unemployment rate edged lower. For the week, the S&P 500 lost 3.2%, the Dow 1.7%, and the Nasdaq 5.5%.

Next week, the AI trade is likely to remain in the spotlight, with investors assessing whether last week's rotation out of technology stocks will continue or whether enthusiasm for the sector will return following the sell-off triggered by the Democrats' sweep of the US Congress. In the US, CPI and PPI reports will provide fresh insights into the inflation outlook and help shape expectations for the Fed's next policy move, with another 25bps rate hike currently priced in for December. A series of appearances by Fed policymakers will also be closely scrutinised for further clues on the interest rate outlook. Elsewhere, investors will focus on China's inflation and trade figures, Japan's PPI, inflation data from India, Brazil and Mexico, trade figures for Germany and the UK, and GDP releases from the UK, Russia, Poland and the Philippines.

The yield on the US 10-year Treasury note jumped as much as 6bps to 4.9% on Friday, before settling around 4.86%, after a stronger-than-expected jobs report boosted expectations of a Fed rate hike next month. The US economy added 165K jobs in October, well above forecasts of 65K. In addition, the unemployment rate fell to 4.1% and wage growth exceeded expectations, pointing to a resilient labour market capable of withstanding higher borrowing costs as the Fed seeks to contain inflationary pressures. Meanwhile, US stocks were on track to rebound from the sharp losses recorded in the previous session, easing demand for safe-haven assets and contributing to the reversal in Treasury prices. Investors have been reassessing the potential economic implications of the Democrats' sweep in the midterm elections, including the prospect of lower tax cuts and government spending, alongside potentially tighter AI regulation that could weigh on investment in the sector.

Canadian employment fell by 4,700 in October 2026, improving from a steep 68,300 decline in September but missing expectations for a 13,600 increase. Private-sector employment dropped by 53,000 (-0.4%), its first decline since February, while public-sector employment rose by 50,000 (+1.1%). Wholesale and retail trade shed 29,000 jobs (-1.0%), while construction added 16,000 (+0.9%) and educational services gained 15,000 (+1.0%). Employment declined in Alberta (-24,000; -0.9%) and Prince Edward Island (-1,300; -1.3%), but increased in British Columbia (+12,000; +0.4%) and Newfoundland and Labrador (+2,900; +1.2%). On a yearly basis, employment was nearly unchanged, rising by just 17,000 (+0.1%). The employment rate fell by 0.1 percentage points to 60.5%, marking its third consecutive monthly decline.