AI Stocks Fall as Democrats Sweep Congress

Democrats' sweep of the House and Senate has the S&P 500 up about 2% at midday, but the past year's AI winners are being sold into the rally. The 50 high-beta stocks with the strongest past runs are down 5%, while the rest of the market is up nearly 3%, on pace for its best day in a year. The AI-power fund AIPO fell 6% and power-equipment maker GE Vernova dropped 11% after Texas elected a governor who has called for a pause on new data centers. Data-center cloud provider CoreWeave fell 10%. The semiconductor fund SMH is down 2%, adding to an 18% drop over the past four weeks, even though chipmaker AMD raised its forecast on AI chip demand. The most heavily shorted stocks are beating the least shorted. Apple, Microsoft and Amazon, with less riding on chips, are each up about 7%, together adding roughly $770 billion in market value.

Crude oil fell 8% to about $89 a barrel as traders bet the sweep makes a deal to end the Iran war more likely. Oil giant ExxonMobil is down 5% and the oil fund USO is down 9%. The 10-year Treasury yield slipped to 4.90% and the dollar weakened, while gold rose 3.5% to about $4,060 an ounce. The gold-miner fund GDX jumped 9% and the homebuilder fund ITB rose nearly 8%. Electric-car maker Tesla is down 3% on worries about congressional scrutiny of Elon Musk's companies. A FactorPulse gauge of hedge-fund losses made a new low, its fourth-deepest slide since 2020, after Goldman Sachs's prime-brokerage desk had called October the fastest pullback in risk-taking since March.

In earnings, pharmacy chain CVS Health fell 12% on a plan to split into two companies, and ride-hailing company Uber rose nearly 8% on a 20% jump in bookings. Chipmaker Qualcomm is up 2% after agreeing to build network equipment for SpaceX's US mobile service, and it reports results after the close. On the economy, ADP said private employers added 86,000 jobs in October, above the 69,000 expected, while a gauge of service-sector activity fell to a three-month low. Futures traders now see about an 83% chance the Fed raises rates by a quarter point on December 9.

Democrats won control of both the House and the Senate Bloomberg. The S&P 500 is up 1.8% and the Nasdaq-100 1.5%. The past year's leaders are being sold into that gain. The top 50 high-beta momentum names are down 5.0%, while the rest of the market is up 2.8%, on pace for its best day in a year and its 30th-best since 2020. The selling extends a move that was already under way. Beta has lost 14.24% over 20 sessions including today, and the same top 50 names had extreme down days on October 30 and November 2. Tuesday's bounce is gone: yesterday's winners are trailing yesterday's hardest-hit stocks by 1.49% (One-Day Momentum, z=-5.4).

WTI Crude Fell 8% on Bets the Sweep Speeds an Iran Deal

Factor	Return	Z-Score	5d Z	20d Z	63d Z	Category	Direction
Semiconductors	-3.46%	-5.7	-3.6	-3.0	-1.5	Thematic	Chip-exposed names lagging
Oil	-2.66%	-5.6	-4.9	-2.5	-0.1	Thematic	Oil-exposed names lagging
One-Day Momentum	-1.49%	-5.4	-0.8	-0.3	-1.8	Style-Momentum	Yesterday's winners reversing
Short Interest	+0.83%	+5.0	+2.6	+2.3	+0.3	Style-Positioning	Most-shorted names ahead
Long-Term Momentum	-2.08%	-3.3	-3.5	-2.3	-0.7	Style-Momentum	12-month winners lagging
Short-Term Momentum	+0.93%	+3.1	+1.5	+2.0	+0.6	Style-Momentum	Last week's moves continuing
Hedge-Fund Ownership	+0.31%	+2.8	+2.1	+0.4	-0.2	Style-Positioning	Hedge-fund-heavy names ahead
Beta	-1.97%	-2.0	-3.0	-3.3	-1.4	Style-Risk	High-beta names lagging

WTI crude is at $88.53 a barrel as of 12:10 PM ET, down 7.9% CNBC. The sweep gives Congress leverage to push for an end to the Iran war, and traders are betting the White House is now more inclined to make a deal CNBC. Oil futures extended their retreat as the results came in The Wall Street Journal. Stocks most exposed to oil are trailing the least exposed by 2.66% (Oil, z=-5.6), with the five-day reading at z=-4.9. ExxonMobil (XOM) is down 5.0%, and its oil exposure accounts for most of that drop. Energy was the past year's biggest winner in our ETF list. USO, up 118% over the past year, is down 9.2% today.

Earnings reactions so far todayReporters worth over $100 billion, or moving more than 10% with a value above $5 billion

Company	Move	Stock-specific	Market cap	Revenue YoY	Margin YoY	What drove it
Fidelity National Information Services FIS	-24.2%	-29.1%	$20B	—	—	weak 2027 outlook and CFO departure
Unum UNM	-16.4%	-17.6%	$14B	—	—	—
Datadog DDOG	-14.1%	-9.4%	$79B	+35%	+6.9 pts operating	cautious fourth-quarter revenue outlook
CVS Health CVS	-12.2%	-9.8%	$117B	+5%	+0.5 pts adj. operating	plan to split into two companies
Advanced Micro Devices AMD	+0.3%	+6.8%	$790B	+45%	+5.1 pts adj. operating	AI chip demand lifts fourth-quarter forecast Bloomberg
Amgen AMGN	+3.5%	-1.4%	$249B	+8%	+0.1 pts adj. operating	—
Arista Networks ANET	+4.8%	+8.1%	$214B	+58%	+0.5 pts adj. operating	revenue up 58.5%, guidance raised
McDonald's MCD	+5.3%	-0.8%	$186B	+1%	+3.0 pts adj. operating	—
Novo Nordisk NVO	+7.0%	+1.6%	$177B	—	—	Wegovy pill sales, raised 2026 guidance The Wall Street Journal
Uber Technologies UBER	+7.5%	+1.5%	$136B	+10%	+3.2 pts adj. operating	gross bookings up 20%, earnings beat
Booking BKNG	+11.0%	+4.4%	$117B	-1%	-0.2 pts operating	EPS beat despite $900 million FTC charge
Coupang CPNG	+13.6%	+6.3%	$27B	+7%	-6.3 pts operating	—
Performance Food PFGC	+13.9%	+6.0%	$15B	—	—	—
Trex TREX	+15.3%	+9.5%	$5B	—	—	—
Block XYZ	+15.7%	+8.9%	$46B	+10%	+5.9 pts adj. operating	—
Stanley Black & Decker SWK	+16.0%	+12.1%	$16B	—	—	—
Duolingo DUOL	+31.9%	+25.4%	$6B	—	—	—

Stock-specific: the part of a stock's move not explained by the market, style or thematic (industry and theme) factors in the FactorPulse risk model.

Revenue and margin from the company's earnings release, year over year; margin change in percentage points; — where the release is not parsed or the figures failed checks.

Of the 500 largest companies, 340 have reported (73% of market cap), on day 25 of the season.

How earnings reactions split, day 25 of the seasonThe 500 largest US companies with a confirmed earnings reaction so far (321), vs the same day in the past eight seasons and in four-season stretches back to mid-2020

Earnings reactions this season vs the past eight seasons, day 25 — Weighted by size, 23% of this season's reporters rose 2σ or more on a stock-specific basis, against 32% at this point in the past eight seasons; 25% fell 2σ or more (past: 35%).

Earnings reactions this season vs the past eight seasons, day 25
Season	≤ −5σ	−5 to −2σ	−2 to 0σ	0 to 2σ	2 to 5σ	≥ 5σ
This season	8%	17%	29%	23%	19%	4%
Past 8 seasons	15%	19%	17%	16%	17%	15%
Q2 2026	14%	21%	16%	17%	19%	14%
Q1 2026	12%	20%	14%	19%	18%	17%
Q4 2025	19%	17%	19%	13%	18%	14%
Q3 2025	11%	18%	21%	17%	17%	16%
Q2 2025	16%	22%	15%	16%	15%	16%
Q1 2025	20%	17%	16%	19%	19%	9%
Q4 2024	18%	19%	17%	17%	15%	14%
Q3 2024	17%	21%	15%	12%	19%	16%
Q3 '23–Q2 '24	16%	17%	16%	15%	19%	17%
Q3 '22–Q2 '23	12%	20%	18%	17%	22%	11%
Q3 '21–Q2 '22	13%	18%	15%	18%	23%	12%
Q3 '20–Q2 '21	7%	21%	28%	23%	17%	4%

σ: a stock's earnings-day stock-specific move divided by its typical daily stock-specific move over the past year. Each bar is cut at the same business day of the season; companies weighted by the square root of market cap.

Chip Stocks Fell Despite Strong AMD and Arista Results

Chip-exposed stocks are trailing the least exposed by 3.46% even after their beta and momentum tilts are accounted for (Semiconductors, z=-5.7). The factor is down 8.07% over 20 sessions including today. Through Tuesday, SMH's 20-day loss of 18.0% ranked in the worst 1.2% of 20-day stretches since 2019.

Strong company results are not holding the group up. AMD is up only 0.3% after forecasting fourth-quarter revenue above estimates Bloomberg. Its own move is a gain of 6.8%, but its style exposures cost it 6.0%. Arista Networks (ANET) reported revenue up 58.5%. It is up 4.8%, against a stock-specific gain of 8.1%. This season, 23% of the 500 largest US reporters have risen 2σ or more on their own news. That is below every one of the past eight seasons at the same point, which averaged 32%, and 142 of this season's reactions are still intraday.

AI power suppliers are taking the political hit directly. AIPO is down 6.2% after Texas elected Democrat Gina Hinojosa, who has called for a moratorium on new data-center projects, in a state that holds 27% of planned US data-center capacity Seeking Alpha. Data-center cloud providers fell further: CoreWeave (CRWV) is down 9.7% and Nebius (NBIS) 6.1%. GE Vernova (GEV) is down 10.7%, mostly because of its factor exposures: it was among Tuesday's biggest gainers, and that group is now reversing.

Bucket Return Profile — Semiconductors z=-5.7
Bucket	Ret 1D Pct	Ret 5D Norm Pct	Ret 20D Norm Pct	Ret 63D Norm Pct
1	4.68	-0.03	0.73	0.33
2	3.77	-0.07	-0.33	-0.28
3	4.06	0.83	0.60	-0.26
4	4.45	0.09	0.36	-0.69
5	2.49	0.69	0.30	-0.66
6	3.37	0.21	0.55	-0.18
7	3.14	0.53	0.75	-0.32
8	3.08	0.12	0.26	-0.59
9	2.74	1.06	1.96	0.29
10	3.01	-0.13	0.34	-0.13
11	2.07	0.90	0.82	-0.47
12	1.85	-0.12	0.22	-0.42
13	0.84	-0.14	0.34	-0.53
14	0.66	0.59	0.82	-0.24
15	0.16	-0.24	0.04	-0.92
16	-0.75	0.08	-0.22	-0.56
17	-0.85	-0.38	-0.56	-0.80
18	-2.56	-0.87	-1.34	-1.01
19	-4.09	-1.62	-1.82	-0.85
20	-6.73	-1.39	-5.24	-2.61

Qualcomm (QCOM) is up 2.2% after agreeing to build network equipment for SpaceX's US mobile service Bloomberg. It reports results after the close.

Apple, Microsoft and Amazon Added $772 Billion as AI Builders Fell

The largest companies are leading the index. Apple, Microsoft and Amazon are each up about 6.7%, together adding about $772 billion of market value. Amazon's gain comes mostly from factors, especially its low exposure to chips. Tesla (TSLA) is down 3.2% on worries about congressional scrutiny of Elon Musk's companies Bloomberg. Its stock-specific loss of 10.4% is larger than the headline drop because its factor exposures lifted it.

Hedge-Fund Pain Index Hits a New Low, 4th-Deepest Since 2020

Our HF de-risking score is at the 99.5th percentile since 2020 so far today. That is the 8th-highest reading of 1,680 sessions, though the ranks compare a partial session with full days. Three of its four legs are firing. 12-month winners are trailing the year's hardest-hit stocks by 2.08% (Long-Term Momentum, z=-3.3). The most-shorted stocks are beating the least shorted by 0.83% (Short Interest, z=+5.0), the reverse of that factor's usual persistent drag. Last week's moves are continuing instead of reverting.

The momentum factors at every horizon are tracking the same trade. The high-beta names that bounced on Tuesday are giving the gain back, which shows up in the one-day factor's z=-5.4. Names that fell last week kept falling (5-day trend, Short-Term Momentum +0.93%, z=+3.1). The 20-day factor (Medium-Term Momentum, +1.18% at z=+4.2) is rising for the same reason: October's hardest-hit names now sit in its losing basket.

The score has been at or above the 98th percentile over 3, 5, 10 and 20 days. The hedge-fund pain index is 13.6 daily standard deviations below its October 6 peak. That is the 4th-deepest of 32 such events since 2020, and none of the loss has been won back. Goldman Sachs Prime Brokerage had already called October the fastest pullback in risk-taking since March. Hedge-fund longs as a group are holding up, though. Stocks most owned by hedge funds are beating the least owned by 0.31% (Hedge-Fund Ownership, z=+2.8), and the score's 13F-crowding leg is quiet.

Lower Yields and a Weaker Dollar Lifted Homebuilders and Gold Miners

HF pain index: how much of the loss is back
Date	Sigma Vs Peak
20260924	-1.05
20260925	-0.40
20260928	-0.97
20260929	-0.52
20260930	-0.98
20261001	-0.37
20261002	-0.03
20261005	-0.47
20261006	0.00
20261007	-0.18
20261008	-0.86
20261009	-0.62
20261012	-1.47
20261013	-1.46
20261014	-2.82
20261015	-4.07
20261016	-4.86
20261019	-4.55
20261020	-5.45
20261021	-4.86
20261022	-9.42
20261023	-9.29
20261026	-8.57
20261027	-7.57
20261028	-6.98
20261029	-7.52
20261030	-9.36
20261102	-11.38
20261103	-10.18
20261104	-13.56

The 10-year Treasury yield is at 4.90%, down 5.0 basis points CNBC. The dollar index is down 0.4% at 101.50 CNBC. Spot gold is up 3.5% at $4,064 an ounce as of 12:20 PM ET CNBC.

The funds that usually rise with Treasuries are all up today. The funds that usually move against them are mostly down, and they include the chip and AI-power funds that led the past year.

Credit Spreads Narrowed and Index Volatility Fell

ETF	Theme	Today	1d Ago	5d Ago	20d Ago	63d Ago
GDX	gold miners	+8.9%	-2.0%	-6.7%	-12.0%	-7.3%
ITB	homebuilders	+7.6%	-3.6%	+3.5%	+7.6%	-6.5%
XLY	consumer discretionary	+4.6%	-0.7%	+1.6%	+5.0%	-0.9%
XLV	healthcare	+2.7%	-0.3%	+2.7%	+10.1%	+12.5%
SPY	S&P 500	+1.8%	+0.3%	-2.0%	-3.2%	-1.8%
SMH	semiconductors	-2.1%	+2.0%	-7.1%	-18.0%	-9.0%
MTUM	momentum	-2.1%	+1.2%	-7.1%	-14.2%	-10.0%
AIPO	AI power infrastructure	-6.2%	+4.3%	-0.4%	-15.9%	-16.2%
XOP	oil & gas producers	-7.1%	-1.1%	-4.2%	+1.6%	+16.4%
USO	oil	-9.2%	+0.8%	-3.5%	+9.2%	+37.7%

Funds by sensitivity to Treasuries: today's move
Sym	Fund	Group	Today Pct	Past Year Pct	Tlt Sensitivity
ITB	Home construction	moved most with Treasuries	7.70	-5.60	1.56
XHB	Homebuilders	moved most with Treasuries	5.70	-1.80	1.31
XLU	Utilities	moved most with Treasuries	0.41	0.20	0.63
IYR	US real estate	moved most with Treasuries	2.58	9.20	0.54
XBI	Biotech	moved most with Treasuries	0.96	38.10	0.54
VNQ	REITs	moved most with Treasuries	2.61	10.60	0.54
XLRE	Real estate sector	moved most with Treasuries	2.76	10.50	0.52
XLP	Staples	moved most with Treasuries	3.83	19.80	0.51
LQD	Corporate bonds	moved most with Treasuries	0.65	-1.90	0.49
XLV	Health care	moved most with Treasuries	2.61	29.70	0.49
IGV	Software	moved most against Treasuries	0.88	-11.10	-0.20
MTUM	Momentum stocks	moved most against Treasuries	-2.51	10.20	-0.29
AIPO	AI & power	moved most against Treasuries	-6.78	0.10	-0.33
XLK	Technology	moved most against Treasuries	0.21	18.00	-0.35
SMH	Chips	moved most against Treasuries	-2.60	43.30	-0.45
BITO	Bitcoin futures	moved most against Treasuries	3.14	-31.30	-0.52
XLE	Energy	moved most against Treasuries	-5.83	55.60	-0.59
WGMI	Bitcoin miners	moved most against Treasuries	-8.57	-48.90	-0.76
XOP	Oil producers	moved most against Treasuries	-7.10	54.10	-0.90
USO	Crude oil	moved most against Treasuries	-8.49	118.00	-1.65

Corporate credit is holding up while AI stocks fall. LQD and HYG are each up 0.7%, more than the drop in yields explains, so credit spreads narrowed slightly. Meta drew a record €53 billion of orders for its debut euro bond sale Bloomberg. Index options are calming much faster than single-stock options. Implied index volatility (Cboe VIX) is 17.7, down from 20.8 at Tuesday's close. Implied single-stock volatility (Cboe VIXEQ) has eased only to 41.7 from 42.8. Implied correlation among the 50 largest S&P 500 stocks (Cboe COR1M) fell to 10.5 from 16.4, the 4.9th percentile since 2006.

Economic Context

The ADP National Employment Report, released at 8:15 AM ET, showed private payrolls up 86,000 in October, above the 69,000 Reuters consensus adpemploymentreport.com The Wall Street Journal. Fed funds futures now put the odds of a quarter-point hike at the December 9 decision at 82.6%, up from 77.4% The Wall Street Journal.

The ISM Non-Manufacturing index, released at 10:00 AM ET, fell to 54.5, below the 54.8 consensus and a three-month low The Wall Street Journal.

Factor Regime Reference

Variance decomposition: live intraday — 20261104 session, bracketed against its trailing-year range. Factor returns are trailing through last close. Total cross-sectional dispersion: 99.6%ile of the past year.

Variance mix — % of total, today vs 1d ago vs 1-yr avg

market 54%ile style 83%ile thematic 100.0%ile idiosyncratic 18%ile

Today (live)

31%12%51%

1d ago

31%66%

1-yr avg

24%64%

Variance explained — today vs. factor's trailing-year range

Marker = the factor's share of today's total variance, placed in its own trailing-year range (box 25–75%ile, ticks 90%ile and max). Amber marker = unusually load-bearing today (≥90%ile of its own year). Factor name green = up today / red = down.

Correlation & dispersion — realized vs implied

Pairwise realized correlation (20d): 7.27% 2.0%ile since 2020 · 6.3%ile 3m most extreme since 2026-09-08

Top-500 pairwise: 9.25% 6.1%ile since 2020 · 27%ile 3m · implied (Cboe COR1M): 10.48 4.9%ile since 2006 (gap -1.2pp)

Realized 20d vol (ann. pts): all stocks 49 vs VIXEQ 42 · index 12 vs VIX 18 · style factors 29 95.8%ile

20-day window (19 completed days + today); percentiles vs model history since 2020; '3m' tokens rank vs the trailing 63 trading days; definitions in Terms below. Implied prints (Cboe) are delayed ~15 min. as of 11:58 ET

Top 50 high-beta momentum names (eq-wt, since-2020 rank): -5.0% 4.5%ile · rest of market +2.8%

HF de-risking score (since-2020 rank so far today): 99.5%ile today · 98.6%ile 5-day · HF pain index 13.6σ below peak (4th-deepest of 32 since 2020), 0% won back · covering plus selling

Trailing factor returns

Factor	Today	1d	5d	20d	60d
Style-Risk
Beta	-1.97% z-2.0	+1.73%	-6.59%	-14.24%	-11.38%
International	+0.48% z+1.6	-0.36%	-0.14%	-0.93%	-0.24%
Residual Volatility	-0.75% z-1.5	+0.29%	-2.20%	-2.60%	+0.09%
Style
Dividend Yield	-0.70% z-4.0	-0.12%	-1.14%	-0.92%	-0.87%
Growth	-0.71% z-3.0	+0.15%	-1.00%	-1.81%	-1.14%
Profitability	+0.54% z+2.8	-0.16%	+1.32%	+1.71%	+2.06%
Leverage	-0.27% z-1.6	+0.04%	+0.36%	-0.20%	-1.84%
Value	-0.20% z-0.8	-0.13%	+0.05%	-0.13%	-0.08%
Liquidity	+0.14% z+0.5	+0.25%	-0.76%	-1.17%	+1.59%
Size	+0.11% z+0.3	-0.03%	-1.09%	-1.97%	+2.10%
Style-Momentum
One-Day Momentum	-1.49% z-5.4	-0.35%	-0.52%	-0.32%	-3.92%
Medium-Term Momentum	+1.18% z+4.2	-0.58%	+1.36%	-0.25%	-0.61%
Long-Term Momentum	-2.08% z-3.3	+0.20%	-4.96%	-6.68%	-3.00%
Short-Term Momentum	+0.93% z+3.1	-0.05%	+1.01%	+2.73%	+0.76%
Style-Positioning
Short Interest	+0.83% z+5.0	-0.21%	+0.95%	+1.72%	+0.19%
Hedge-Fund Ownership	+0.31% z+2.8	+0.12%	+0.51%	+0.18%	-0.02%
Style-Flow
Short-Sale Activity	-0.51% z-4.7	-0.20%	-0.29%	-0.28%	+0.33%
Morning Activity	-0.00% z-0.0	-0.15%	-0.44%	-0.77%	-0.55%
Thematic
Semiconductors	-3.46% z-5.7	+0.86%	-4.91%	-8.07%	-6.67%
Oil	-2.66% z-5.6	+0.07%	-5.18%	-5.27%	-1.06%
Gold	+0.93% z+2.9	-0.16%	+0.43%	-0.01%	+0.65%
Bitcoin / Crypto	+0.83% z+2.7	-0.06%	-1.22%	-1.05%	+1.34%
Treasury (Duration)	+0.48% z+1.5	-0.35%	+1.14%	+2.95%	-0.92%
China	+0.22% z+0.5	+0.15%	-0.50%	-1.15%	-1.13%

5/20/60d windows include today's session; 1d is the previous session.

Terms

Pairwise realized correlation. Index variance net of the weighted idiosyncratic diagonal, over the cross terms — the estimator used for implied-correlation indices. 20-day window unless noted; history since 2020.

Market variance share. The fraction of cross-sectional variance explained by the market factor — the attribution companion to pairwise correlation, not a substitute for it.

Factor z-score. Today's factor return divided by its daily-return standard deviation over ~1,600 trading days.

Conditional importance. A factor's relative share of what a tree-based fit of today's stock returns explains; sums to 100% across factors.

High-beta momentum cohort. US names above $2B market cap in the top quintile of both raw beta and 12-month momentum; membership frozen at each month's first business day. “Top 50” = the 50 strongest by combined rank.

HF de-risking score. A FactorPulse measure of de-risking in factor returns: the average of four legs, each in its own daily-volatility units and counted only when it moves in the de-risking direction. They are the most-shorted names rising, 12-month momentum winners falling, names crowded in hedge-fund 13F filings falling net of their beta and momentum, and last week's relative moves continuing instead of reverting (counted only alongside another leg). A leg counts as firing at half its daily volatility or more, so a leg can show a small value without firing. Types: A, covering and selling together; B, selling only; C, covering only. Ranked against every session since January 2020. It reads factor returns only, never positions.

Dispersion (realized). Total cross-sectional volatility net of the market component; high dispersion is the flip side of low correlation.

Stock-specific (idiosyncratic) return. The part of a stock's move not explained by the market, style or thematic (industry and theme) factors in the FactorPulse risk model.

VIXEQ / DSPX / COR1M. Cboe implied indices: single-stock volatility, dispersion, and 1-month implied correlation (top-50 S&P names). Quotes delayed ~15 minutes.

Data compiled by FactorPulse AI; edited and verified by Jeff Klein. For informational purposes only. Does not constitute financial advice, an investment recommendation, or an offer to buy or sell any securities. Always consult a qualified financial professional before making investment decisions.

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