A bruising October for technology stocks — the Nasdaq-100 finished the month down nearly 7% — sent investors rotating into consumer staples, which surged 11.4%, as a packed week of earnings, the midterm elections, and the jobs report looms.
A turbulent October for technology stocks has sent investors rotating into consumer staples, with the sector surging 11.4% last month — the second-best performing sector behind energy — even as the Nasdaq-100 closed October down nearly 7%.
The S&P 500 Equal Weight index, which treats all constituent stocks equally rather than weighting by market cap, gained roughly 5% for the month, reflecting the breadth of the rotation away from large-cap tech.
The broader market also endured a volatile final week. The Nasdaq Composite climbed 2.3% through Wednesday before plunging 2.9% on Friday, ending the week down 2%. The S&P 500 rose 1.6% through Wednesday before tumbling 1.8% Friday to finish the week down 0.6%. The Dow Jones Industrial Average gained 0.5% through Wednesday before slipping 1.1% Friday, ending the week down 0.9%.
The week ahead offers no shortage of potential catalysts, including earnings from Apple, Advanced Micro Devices, Pfizer, Amgen, CVS Health, McDonald's, and Kimberly-Clark, alongside the midterm elections and the monthly jobs report.
Apple reports after the bell on Monday. Shares have recently reached an all-time high, bolstered by interest in its latest products, including the upcoming Duo foldable phone. The company's valuation currently sits at nearly 40 times earnings, a level that leaves little margin for a shortfall.
Advanced Micro Devices reports on Tuesday, providing another read on the semiconductor sector following Intel's disappointing results. Drugmakers Pfizer and Amgen also report that day.
Kimberly-Clark, which has gained nearly 11% in October, reports Thursday. The stock trades at less than 15 times earnings and carries a 4.7% dividend yield. Its pending merger with Kenvue — which owns brands including Tylenol and Band-Aid — has drawn attention as a potential source of operational efficiencies.
Procter & Gamble shares rallied 11% in October following better-than-expected quarterly results last week. Constellation Brands surged 20% for the month, with its core beer business gaining market share and its wine and spirits division reporting 15% shipment growth last quarter. The stock trades at roughly 11 times earnings and yields more than 3%. Coca-Cola shares gained 9% in October, with its most recent quarterly report driven by higher volume rather than price increases.
The midterm elections on Tuesday add a layer of political uncertainty, particularly for the data center industry. A shift in congressional control could complicate planned infrastructure projects, as political opposition to new data center construction has been mounting in some regions.
The monthly jobs report on Friday will serve as the week's final major data point, offering a fresh look at the labor market's health and its implications for inflation and interest rates.
With the AI trade under pressure and big-name earnings still ahead, the coming week is shaping up as a critical test of whether October's technology rout represents a temporary pullback or the start of a more sustained realignment in market leadership.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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