November 4th Pre-Market Brief

Good Morning.

Long night if you stayed up for the results, and futures took us on a round trip with it. The Dow is up strong at open while chip stocks sit this one out. Markets have usually liked a split government, and I’m all for a green day.

Would love to see the chips join in.

Let's dig in...

Today's Big Picture

1. Democrats’ New Power Is Investigations

Trump’s veto blocks most Democratic bills, so the real change in the House is the power to investigate. Democrats already want AI CEOs testifying under oath, a new risk for AI stocks and Musk’s companies. Solar stocks are rallying on tax credits a Democratic Congress can’t extend over Trump’s veto.

2. Data Centers Already Built Just Got More Valuable

Voters rejected data centers in at least 39 of 45 local ballot measures last night. Builders like CoreWeave $CRWV and Oracle $ORCL are falling, while older operators Equinix $EQIX and Digital Realty $DLR are edging up. Jefferies says new limits favor those older operators. Every blocked project makes the space already built harder to replace.

3. Oil Fell, but About $10 of War Fear Remains

Brent crude fell to about $100 a barrel on bets a Democratic Congress reins in the Iran war. The Journal says energy traders see oil worth closer to $90, with Hormuz shipments nearly back to normal. Trump says he has no immediate plans to strike, but he has two months before the new Congress is seated. That window is why the extra $10 is still in the price.

Market Overview

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Stock Spotlight (pre-market)

Advanced Micro Devices $AMD ( ▲ 3.65% )  

lower premarket, giving up an early gain from its earnings beat as chip stocks sell off on data center worries. The chipmaker’s data center sales nearly doubled to $8.5 billion, and it guided above estimates for next quarter.

Tesla $TSLA ( ▼ 1.32% )  

lower after the Democratic sweep, a loss for CEO Elon Musk, who spent at least $474 million backing Republicans. Tesla also runs an AI supercomputing site in Texas, where the new governor wants to pause data center building.

Novo Nordisk $NVO ( ▼ 0.64% )  

the maker of Wegovy and Ozempic, is higher after quarterly sales and profit beat estimates and it raised its full year outlook. Its new Wegovy pill led the beat, selling 5.4 billion kroner against 4.5 billion expected.

CVS Health $CVS ( ▲ 3.28% )  

lower after announcing it will split in two by the first half of 2028, despite also raising its outlook. The breakup separates its pharmacy chain from insurer Aetna, unwinding the $78 billion deal that combined them.

McDonald’s $MCD ( ▼ 0.98% )  

is higher after adjusted earnings of $3.57 a share beat the $3.38 expected, despite a revenue miss. U.S. sales at established restaurants dipped less than feared, and the CEO says value deals helped late in the quarter.

Skyworks Solutions $SWKS ( ▼ 10.06% )  

which makes wireless chips for phones, is sharply lower after guiding well below estimates. It expects about $1.25 a share and up to $1.90 billion in revenue this quarter, short of the $1.50 and $1.99 billion expected.

What to Watch

ISM Services Index (10:00 AM ET)
This survey tracks whether service businesses like restaurants and banks are growing, and anything above 50 means expansion. Economists expect 54.7. ADP already showed private employers added 86,000 jobs in October, above the 75,000 expected. A solid ISM number backs the economy-sensitive stocks leading the rally.

Qualcomm and Memory(After the Bell)
Qualcomm $QCOM reports tonight after warning that pricier memory chips are hurting phone demand. Evercore ISI argues slower data center building would cool memory prices, easing the squeeze Apple flagged yesterday. The same math helps Qualcomm and hurts memory makers like Micron $MU, which is lower this morning while Apple $AAPL is higher.

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