By Thierry Hasse, Chief Investment Officer, Elevage Partners
Week of November 3, 2025
Last week offered investors more treats than tricks, though the market narrative continues to evolve beneath the surface. Strong corporate earnings helped lift equity indices to new highs, even as signals from the Federal Reserve and ongoing consumer sentiment remind us that the economic picture remains uneven.
Equity Markets Close October on a Strong Note
Investors were particularly encouraged by the re-acceleration of Amazon Web Services (AWS) revenue growth, driven by expanded cloud and artificial intelligence (AI) service offerings. For much of this year, Amazon had lagged broader U.S. equity benchmarks amid concerns about retail margins, tariffs and cloud competition. The sudden catch-up in one trading session was a timely reminder: attempting to time markets remains a fool’s errand.
Overall, October delivered meaningful gains. The S&P 500 rose 2.3%, the Nasdaq gained 4.7% and the Dow Jones Industrial Average recorded its sixth consecutive positive month — its longest such streak since 2018 (Source: CNBC).
Yet performance alone does not tell the whole story. As Bianco Research observed last week, many Americans no longer view the stock market as a reflection of the real economy. Equity indices may be reaching new highs, while survey data suggest many households remain concerned about rising living costs, job stability and broader economic conditions. The divergence reflects our increasingly “K-shaped” economy, in which outcomes vary widely across sectors and income levels.
The Federal Reserve Offers Both Reassurance and Uncertainty
Last Wednesday, the Federal Reserve cut the federal funds rate by 0.25%, bringing the target range to 3.75% to 4%, while also announcing the end of quantitative tightening (the ongoing reduction of the Fed’s balance sheet). Policymakers acknowledged signs of cooling in the labor market, but inflation remains above the Fed’s long-term goal.
Importantly, Fed Chair Jerome Powell emphasized that another rate cut in December is not guaranteed:
“A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.”
That sentence alone reverberated through fixed-income markets. Expectations of continued easing shifted quickly, and Treasury yields climbed as investors reassessed the likely path of interest rates. The 10-Year Treasury yield rose from just under 4% to approximately 4.1%, its largest weekly increase since July (Source: Dow Jones Market Data). Mortgage rates edged higher as well: the average 30-year fixed rate increased to 6.33%, up from 6.13% the prior week (Source: Mortgage News Daily).
In short, a rate move intended to provide relief delivered the opposite effect — at least in the near term.
The AI Investment Wave Continues to Build
During earnings calls, the major U.S. technology companies — Alphabet, Microsoft, Meta and Amazon — signaled continued and increasing capital investment in AI infrastructure. Total capital expenditures among these four companies now exceed $380 billion for 2025 and are expected to rise further in 2026 (Source: CNBC).
This is a profound shift. Once considered “capital-light,” these firms are now investing at levels typical of utility and industrial expansion. Some are turning to debt markets to fund the build-out: Meta, for example, is issuing approximately $30 billion in investment-grade corporate bonds, with maturities ranging from five to 40 years. Investors reacted by pushing Meta shares down roughly 13% over two sessions, from $750 to $650 (Source: Reuters).
Investor patience with the AI build-first, monetize-later approach remains, but expectations are rising. The payoff will need to come into focus sooner rather than later.
The Week Ahead: Key Signals, Even Without Key Data
Normally, the first Friday of the month brings the U.S. Bureau of Labor Statistics monthly employment report — one of the most closely watched economic indicators. However, with the federal government shutdown now entering its second month, many official economic data releases remain delayed. The October Consumer Price Index, for example, is not being published because data collection was paused.
In the absence of government reporting, investors will look to private sector data to gauge labor conditions, consumer demand and business sentiment.
On the corporate front, notable earnings include:
- Palantir — currently among the highest-valued AI-themed companies, trading at roughly 100x revenue and 700x forward earnings expectations. With such elevated expectations, execution remains crucial.
- McDonald’s — a notable indicator of consumer spending resilience. Value meals can be surprisingly revealing economic data points.
Looking Ahead
This week, our attention remains on:
- How markets digest last week’s rate messaging from the Federal Reserve
- Ongoing earnings results from companies tied to consumer spending and AI infrastructure
- Private labor market indicators in the absence of government data
Uncertainty remains part of the environment — but uncertainty has always been part of investing. What matters is structure, process, and preparation.
At Elevage Partners, we anticipate — we prepare.
The information contained herein represents the views of Elevage Partners at a specific point in time and is based on information believed to be reliable. No representation or warranty is made concerning the accuracy of any data compiled herein In addition, there can be no guarantee that any projection, forecast, or opinion in these materials will be realized. Any statement non-factual in nature constitutes only current opinion which is subject to change. These materials are provided for informational purposes only and do not constitute investment advice. Any reference to a security listed herein does not constitute a recommendation to buy, sell, or hold such security. Past performance is no guarantee of future results. The historical returns of any securities and/or sectors mentioned in this commentary are not necessarily indicative of their future performance.